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Mint
a day ago
- Business
- Mint
IMF warns 2030 sustainable development goals at risk as funding gaps widen
New Delhi: The International Monetary Fund has warned that the world is increasingly unlikely to meet the sustainable development goals (SDGs) by 2030 as financing needs far exceed what many countries can realistically manage—raising the risk of broader macroeconomic imbalances. The warning came after the IMF executive board reviewed a staff paper evaluating the fund's role in supporting international development financing. The review precedes the Fourth Financing for Development Conference (FfD4), scheduled to be held in Sevilla, Spain, from 30 June 30 to 3 July. The IMF paper flags a deteriorating development outlook, reassesses the feasibility of the SDGs, and outlines measures to accelerate progress amid mounting financial and economic pressures. 'A series of shocks since 2020 has compounded longstanding structural challenges, hitting low-income and fragile states the hardest,' the IMF said in a statement on Friday. 'Debt vulnerabilities deserve attention, particularly for low-income countries,' it added. While debt remains broadly sustainable, the IMF noted that many countries face steep interest costs and rising refinancing needs, constraining their ability to invest in critical development spending. 'Against this background, achieving the sustainable development goals by 2030 appears increasingly unlikely,' it said. Adopted in 2015, the SDGs comprise 17 goals and 169 targets designed to eliminate poverty, tackle climate change, reduce inequality, and promote prosperity. But with the deadline fast approaching, global progress is faltering amid growing financing gaps, economic headwinds and geopolitical uncertainty. 'Accelerating development progress will require a major collective effort,' the IMF said, 'including strong domestic reforms, adequate international support, and proactive debt management.' It also called for tailored approaches, warning that rising divergence among developing countries demands more nuanced reform agendas and support frameworks. Meanwhile, IMF directors have stressed the need for a 'major collective effort' combining ambitious domestic reforms with robust international support. This includes advancing sound macroeconomic policies, improving public spending efficiency, strengthening governance, mobilising domestic resources, and boosting private-sector-led growth and job creation. International backing—through well-coordinated capacity development and additional public and private finance—will be critical, the IMF said. The IMF directors have also endorsed efforts to improve debt restructuring mechanisms for countries with unsustainable debt, including deeper relief under the Common Framework and the Global Sovereign Debt Roundtable's new 'restructuring playbook'. They also supported a 'three-pillar approach' to help countries where debt is sustainable but constrains productive spending, the IMF added. The IMF's role, though not developmental by design, remains vital in preserving macroeconomic and financial stability—a prerequisite for sustainable development, it said.
Reuters
23-05-2025
- Business
- Reuters
IMF says board on track to weigh third review of Ethiopia deal in time
NAIROBI, May 23 (Reuters) - The International Monetary Fund expects its board to consider the third review of Ethiopia's $3.4 billion programme within the set out timeline, a spokesperson said, a key step for the country to advance its programme and receive cash from the fund. Staff from the IMF visited the country in mid-April for an assessment, and Ethiopia's government said it expected a staff-level agreement to be announced within days, but that announcement has not yet been issued. "We anticipate that the IMF Executive Board will consider the third review this summer, consistent with original review schedule," IMF Spokesperson Julie Kozack told Reuters. She did not comment on the status of the staff level agreement. The projected approval by the board in June will trigger the release of a 191.70 SDR loan tranche (about $265 million) to the government, to support the East African nation's sprawling macroeconomic reforms programme. The reforms were a prerequisite for the IMF programme, which was secured at the end of last July, allowing Ethiopia to proceed with its external debt restructuring under the G20'S Common Framework initiative. The government has since secured a preliminary agreement with its official creditors and formal talks with bondholders are expected to start in the coming weeks and months.
Business Insider
20-05-2025
- Business
- Business Insider
Ghana and Afreximbank in heated dispute over $768m debt
Ghana, fresh from a tough debt restructuring process, is now locked in a dispute with the African Export-Import Bank (Afreximbank). Ghana is in conflict with Afreximbank regarding the restructuring of a $768.4 million debt. The Finance Ministry of Ghana seeks equal treatment of Afreximbank's loan with other restructured debts. Afreximbank insists on preferred creditor status to avoid losses during restructuring. Ghana, fresh from a tough debt restructuring process, is now locked in a dispute with the African Export-Import Bank (Afreximbank), one of its largest commercial creditors, over a $768.4 million debt. The Ghanaian Finance Ministry wants Afreximbank's loan to be treated like other debts it has already restructured, such as bilateral loans from China and $13 billion worth of eurobonds, Bloomberg reported. In restructuring, lenders often agree to extend payment deadlines, reduce interest rates, or take partial losses (called 'haircuts') to help a struggling country recover. But Afreximbank says it should not have to take any losses. The Cairo-based bank says it holds 'preferred creditor status,' a designation usually given to institutions like the International Monetary Fund (IMF) or World Bank. This status means that their loans are repaid in full, ahead of other creditors, and are not subject to restructuring. According to the Minister of Finance, Cassiel Ato Forson, 'Ghana's government doesn't see Afreximbank as having preferred creditor status, we do not believe that their debt is senior to any other restructurable debt. The Afrexim debt is part of our restructurable envelope. ' A dispute with regional implications The disagreement could delay Ghana's debt resolution, which began after it defaulted in December 2022. More importantly, it could set the tone for how regional lenders like Afreximbank are treated in future debt talks, not just in Ghana but in other African countries facing financial distress, such as Zambia, Kenya, and Ethiopia. Zambia, for example, has faced multiple hurdles in trying to restructure its debt under the G20's Common Framework, a global plan launched during the COVID-19 pandemic to help poor countries renegotiate unaffordable debt. Despite its good intentions, the Framework has struggled with implementation and coordination among creditors. Afreximbank, which is owned by African governments and private investors, has also shown it's willing to enforce its claims through legal means. On May 8, it won a court case against South Sudan, forcing the country to repay $657 million in defaulted loans, plus 13.5% post-judgment interest. The move sent a strong message that the bank will pursue repayment, even from fellow African states.
Zawya
29-04-2025
- Business
- Zawya
Ethiopia expects $3.4bln deal on IMF review within days
Ethiopia expects to reach a preliminary agreement on the third review of its $3.4 billion loan programme with the International Monetary Fund early this week and sees formal debt talks with bondholders starting in summer, State Finance Minister Eyob Tekalign told Reuters. The country, which struck a four-year, $3.4 billion programme IMF deal last July, is in the midst of a far-reaching reform push, including the floatation of its birr currency and a push to get its debt restructuring over the line. Speaking on the sidelines of the IMF and World Bank Group spring meetings in Washington, Eyob said he had met IMF Managing Director Kristalina Georgieva as well as other staff to discuss progress on reforms.'They are very much pleased with how the programme is going,' said Eyob in an interview on Saturday. 'The results we've seen now were pleasant surprises, because we've over-achieved in many areas, whether it's in reserve accumulation, in inflationary trends or in export growth.'Eyob expected the Fund's executive board to sign off on the review in June - a step needed to trigger the next payout of the loan programme. Read: Ethiopia's tough new rules for foreign banksMeanwhile, talks in Washington with some holders of Ethiopia's sole $1 billion international bond had also been productive, he said, adding formal talks aimed at hammering out details of a debt rework could start in the summer.'We cannot get into substantive discussions, because they are waiting to see the latest DSA macro tables from the fund,' he said, referring to the IMF's debt sustainability analysis. Ethiopia in March reached a draft agreement with its official creditors on restructuring $8.4 billion of debt, but has been locked in a standoff with its bondholders. Bondholders and Ethiopia are at odds over whether the country is facing a liquidity issue, meaning it might only need more time to pay, or a solvency issue, which could require more debt writedowns known as haircuts. A draft deal with official creditors, which is expected to be finalised within months, gives the government more time to pay but stops short of an outright haircut in favour of focusing on payment extensions, lowering the debt service during the IMF programme and cutting interest levels. Eyob said the country had to follow the principle of comparability of treatment with other creditors.'Haircut or not, I think this is sometimes an unnecessary debate,' he said. 'The whole exercise is to help the country sustainably finance its development - that's the whole idea behind the debt treatment.'Ethiopia opted to restructure its external debt under the G20's Common Framework in 2021, before it defaulted on its sole Eurobond in December 2023. Eyob also said he was in talks with China's main trade policy banks - Export-Import Bank of China and the China Development Bank - over concessional financing for projects such as Addis Ababa's city rail and airport expansions. He also held meetings with the US International Development Finance Corporation.'We understand that they see us as one of the priority countries, so we should be able to see more investment from the U. S. side,' he said, adding discussions had focused around direct project financing as well as guarantees across a range of sectors, including energy. © Copyright 2022 Nation Media Group. All Rights Reserved. Provided by SyndiGate Media Inc. (
TimesLIVE
28-04-2025
- Business
- TimesLIVE
Ethiopia expects preliminary deal on IMF review in days: finance minister
"We cannot get into substantive discussions, because they are waiting to see the latest DSA macro tables from the fund," he said, referring to the IMF's debt sustainability analysis. Ethiopia in March reached a draft agreement with its official creditors on restructuring $8.4bn (R156.98bn) of debt, but has been locked in a standoff with its bondholders. Bondholders and Ethiopia are at odds over whether the country is facing a liquidity issue, meaning it might only need more time to pay, or a solvency issue, which could require more debt writedowns known as haircuts. A draft deal with official creditors, which is expected to be finalised within months, gives the government more time to pay but stops short of an outright haircut in favour of focusing on payment extensions, lowering the debt service during the IMF programme and cutting interest levels. Eyob said the country had to follow the principle of comparability of treatment with other creditors. "Haircut or not, I think this is sometimes an unnecessary debate," he said. "The whole exercise is to help the country sustainably finance its development — that's the whole idea behind the debt treatment." Ethiopia opted to restructure its external debt under the G20's Common Framework in 2021, before it defaulted on its sole Eurobond in December 2023. Eyob also said he was in talks with China's main trade policy banks — Export-Import Bank of China and the China Development Bank — over concessional financing for projects such as Addis Ababa's city rail and airport expansions. He also held meetings with the US International Development Finance Corporation. "We understand that they see us as one of the priority countries, so we should be able to see more investment from the US side," he said, adding discussions had focused around direct project financing as well as guarantees across a range of sectors, including energy.
