IMF Allocates $1.92 Billion In Funding For Six East African Nations

The International Monetary Fund has entered into a funding program with six East African nations. As of now, the global financial institution has authorized the disbursement of $620.65 million in budgetary support for countries such as Rwanda, Tanzania, and the Democratic Republic of Congo (DRC). This constitutes a fraction of the overall commitment, which amounts to $1.92 billion.

• IMF commits $620.65 million in budgetary support to East African nations.
• Six countries, including Rwanda, Tanzania, and DRC, face debt issues, falling revenue, and depreciating currencies.
• Funding aims to address budget deficits, strengthen foreign exchange reserves, and spur socioeconomic and governance reforms.

The IMF has chosen several countries grappling with varying degrees of debt issues, including Rwanda, Tanzania, DRC, Somalia, Burundi, and Kenya. According to media, these nations are confronted with challenges such as dwindling revenue collections, declining foreign exchange reserves, and depreciating currencies.

The East African report states, “The IMF funding, contingent on the implementation of crucial socioeconomic and governance reforms by the recipient countries, aims to assist them in addressing persistent budget deficits and bolstering weakening foreign exchange reserve positions.”

Here is the breakdown of funding allocated to each country:

• Tanzania, Rwanda, and the Democratic Republic of the Congo have received $150.5 million, $268.05 million, and $202.1 million, respectively.
• Tanzania’s funding program dates back to July 2022, with the approval of the $1.04 billion Extended Credit Facility (ECF). Under this arrangement, Tanzania can access up to $455.3 million.
• Somalia and the IMF reached an agreement to implement vital economic and financial policy reforms, resulting in significant debt reduction and an additional $100 million in funding under a three-year Extended Credit Facility (ECF) arrangement.
• Rwanda secured approval for a new $268.05 million, 14-month credit facility arrangement on December 14. As of now, Kigali can access $138.84 million of this credit facility.
• The IMF Board concluded its sixth review under the ECF agreement with the DRC on the same day, facilitating the immediate transfer of $202.1 million toward international reserves to strengthen buffers.
• Kenya is in line to receive an expanded $938 million financing, pending approval in January, after which the country can immediately access approximately $682 million.
• Burundi received authorization from the IMF board in July for a 38-month agreement under the ECF, providing access to $261.7 million.