IMF Approves $620.65M Budget Support for Six East African Nations

The International Monetary Fund has agreed to a funding program with six East African countries. So far, the global lender has approved the payment of $620.65 million in budgetary support for them including Rwanda, Tanzania, and the Democratic Republic of Congo (DRC). This is a small part of the commitment that totals $1.92 billion.

The countries selected by the IMF currently have some degree of debt issues, and they are Rwanda, Tanzania, DRC, Somalia, Burundi, and Kenya.

According to a report by The East African, an East African news publication, these countries are also riddled with falling revenue collections, declining forex reserves, and depreciating currencies.

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“The IMF funding, which is pegged on the implementation of key socioeconomic and governance reforms by the recipient countries, is aimed at helping them deal with the persistent budget deficits and shore up the flagging foreign exchange reserve positions,” the East African report reads.

Funding per country

For Tanzania, Rwanda, and the Democratic Republic of the Congo, the board has distributed $150.5 million, $268.05 million, and $202.1 million respectively.

For Tanzania, the funding program dates back to July 2022, when the $1.04 billion Extended Credit Facility (ECF) was approved. Under the agreement, Tanzania can currently access up to $455.3 million.

To address important economic and financial policy reforms, Somalia and the IMF reached a consensus. This allowed for significant debt reduction as well as an extra $100 million in funding under a three-year Extended Credit Facility (ECF) arrangement.

The approval of a new $268.05 million, 14-month credit facility arrangement, for Rwanda, came on December 14. Kigali can only currently access $138.84 million of said credit facility.

The IMF Board also concluded its sixth review under the ECF agreement with the DRC on the same day which allowed for the immediate transfer of $202.1 million towards international reserves to keep accumulating buffers.

Kenya got an expanded $938 million financing, which is set to be approved in January, after which the country would be immediately allowed to access approximately $682 million.

And for Burundi, the IMF board back in July authorized a 38-month agreement under the ECF, granting the country access to $261.7 million.

SOURCE:africa.businessinsider.com