IN a concerted effort to fortify weakened foreign exchange reserves and extend critical budgetary assistance, the IMF has concluded a comprehensive review of economic, financial, social, and governance policies in eight African nations during the month of October.
The completion of these evaluations has led to substantial financial commitments totalling over $1bn for seven of the eight nations, contingent upon approval by the IMF Executive Board.
The breakdown of the committed funding includes support for various countries such as Somalia ($100 million), Democratic Republic of Congo ($200.39 million), Rwanda ($262 million), Tanzania ($150 million), Gambia ($10.9 million), Comoros ($4.7 million), and Senegal ($276 million).
Recently, the IMF declared that a staff-level agreement has been reached with Tanzania concerning the second review of the extended credit facility. Charalambos Tsangarides, the leader of the IMF team, stated, ‘Upon completion of the Executive Board review, Tanzania will have access to SDR113.37 million ($150 million), bringing the total IMF financial support under the arrangement to SDR342.1 million ($452.7 million).’
For Zimbabwe, the outcome of the IMF staff visit is anticipated to serve as a pivotal element in preparations for a Staff Monitored Programme (SMP). In Mozambique, discussions with the IMF team are set to continue within the context of the Third Review under the Extended Credit Facility (ECF) arrangement.
In Somalia, an agreement between the IMF and Somali authorities on significant economic and financial policy reforms now paves the way for the country to receive debt relief and an additional $100 million financing under a three-year Extended Credit Facility (ECF) arrangement, pending approval by the IMF Executive Board.
Laura Jaramillo, the leader of the IMF team, praised Somalia’s steadfast implementation of far-reaching reforms to fortify key economic and financial policy institutions, underscoring the country’s substantial progress in rebuilding its economy and institutions since 2020 under the current ECF-supported programme.
On October 24, an IMF team, led by Edward Gemayel, conducted a mission in Dakar to review progress under an economic programme supported by an Extended Fund Facility (EFF)/ECF arrangement, along with the Resilience and Sustainability Facility (RS), which were approved by the IMF Board on June 26, 2023. The completion of the Executive Board’s reviews is expected to result in a disbursement of about $276 million.
In the Democratic Republic of Congo (DRC), the IMF staff and Congolese authorities reached a staff-level agreement on economic policies, facilitating the completion of the fifth review of the three-year ECF-supported programme, aiming to make SDR152.3 million (about $200.39 million) available by mid-December to augment international reserves.
In Rwanda, the IMF team reached a staff-level agreement on necessary policies for completing the second reviews of Rwanda’s Policy Coordination Instrument and programme under the Resilience and Sustainability Facility. This agreement also includes a new 14-month Stand-by-Credit Facility to alleviate balance of payment pressures resulting from climate-related shocks, offering total access of 125 percent of quota (SDR200.25 million or $262 million).
Meanwhile, in Mozambique, discussions between the IMF staff and Mozambican authorities continued to focus on performance and policies underpinning the third review of the program mewithin the ECF arrangement, with plans to reach a Staff Level Agreement in the following weeks.
Gambia saw a staff-level agreement between the IMF Staff and Gambian authorities on economic policies and reforms, supporting a new 3-year arrangement under the Extended Credit Facility with a requested access of SDR74.64 million (around $100 million). The programme aims to bolster economic recovery, combat inflation, address debt vulnerabilities, advance structural reforms, and foster inclusive growth.
Similarly, in Comoros, the IMF staff reached an agreement with the authorities on economic policies and reforms under the 4-year ECF-supported programme. Upon formal completion of the review by the IMF Executive Board, approximately $4.7 million in financing will be released, summing the total disbursement under the arrangement to $9.5 million.
These initiatives mark a significant step in supporting the economic resurgence and financial stability of these African nations, demonstrating the IMF’s commitment to bolstering and sustaining economic growth in the region.
