In a landmark move, the International Monetary Fund (IMF) has greenlit a substantial financial boost of $620.65 million, providing critical budgetary support to Rwanda, Tanzania, and the Democratic Republic of Congo (DRC). This allocation is part of the larger $1.92 billion financing commitment forged between the IMF and six East African nations over the past six months.
The timely relief comes as a beacon for the region, encompassing Somalia, Burundi, and Kenya, grappling with mounting debts exacerbated by dwindling revenue, diminishing foreign exchange reserves, and depreciating currencies.
Conditioned on the implementation of pivotal socioeconomic and governance reforms, the IMF funding aims to empower these nations in addressing persistent budget deficits and bolstering faltering foreign exchange reserves. Recent approvals include disbursements of $150.5 million, $268.05 million, and $202.1 million for Tanzania, Rwanda, and the DRC, respectively, over the past two weeks.
For Tanzania, this funding forms a crucial part of the $1.04 billion Extended Credit Facility (ECF) approved by the IMF board in July 2022. Following the successful completion of the program’s second review, Tanzania’s total access under the arrangement reaches $455.3 million. The IMF’s 40-month financing package aligns with Tanzania’s economic recovery, addresses global geopolitical challenges, and supports structural reforms for sustainable and inclusive growth.
Highlighting the positive strides, the IMF stated on December 13, “Most end-June 2023 quantitative performance criteria and indicative targets were met.” Concurrently, on December 14, the IMF Board concluded the fifth review under the ECF arrangement with the DRC, facilitating an immediate disbursement of $202.1 million to boost international reserves.
Somalia, too, secured substantial debt relief and an additional $100 million financing under a three-year Extended Credit Facility (ECF) arrangement, following a pivotal agreement on key economic and financial policy reforms.
In Burundi’s case, the IMF board approved a 38-month arrangement under the ECF on July 17, 2023, with access to SDR 200.2 million (equivalent to $261.7 million).
November witnessed a breakthrough for Kenya, with the IMF staff reaching an agreement for an expanded $938 million financing. Pending board approval in January, this funding would grant Kenya immediate access to approximately $682 million, marking a significant stride in the country’s economic trajectory.
Source: The East African