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Tuesday 15 June 2021
HomeNewsIMF approves financing for Lesotho, Mauritania

IMF approves financing for Lesotho, Mauritania

The Executive Board of the International Monetary Fund (IMF) Tuesday approved an immediate disbursement of an amount equivalent to Special Drawing Rights (SDR) of 5.68 million (US$8.7 million) to Lesotho to enable the government address some socio-economic issues in the country.

The IMF said in a statement that the development brings the total disbursements under the arrangement to an amount equivalent to SDR 39.245 million (US$60.2 million).

It said the disbursement followed the completion of the fourth review of Lesotho’s economic performance under a programme supported by the Extended Credit Facility (ECF) arrangement.

”In completing the review, the Board also approved a waiver for the missed continuous cumulative quantitative performance criterion on new non-concessional external debt contracted or guaranteed by the public sector,’’ it said.

”The three-year ECF arrangement for the Kingdom of Lesotho in an amount of SDR 41.9 million (120 percent of quota) was approved by the IMF’s Executive Board on June 2, 2010.

”On April 9 2012, the Board approved an augmentation of access equal to 25 percent of quota, which has led to a total access of SDR 50.605 million (145 percent of quota) in order to cushion the impact of the 2010-11 flood damage and high international commodity prices,’’ it said.

The statement quoted Mr. Min Zhu, IMF’s Deputy Managing Director and Acting Chair, as saying Lesotho has maintained robust growth despite adverse weather shocks while inflation continues to moderate, partly reflecting easing in international commodity prices.

Meanwhile, the IMF also approved US$16.9 million to Mauritania under the Extended Credit Facility arrangement (ECF).

”The Board’s decision was taken on a lapse of time basis, and will enable the immediate disbursement of an amount equivalent to SDR 11.04 million (US$16.9 million), bringing total disbursements under the arrangement to an amount equivalent to SDR 66.24 million (US$101.6 million),’’ the statement said.

It said the Executive Board approved a three-year arrangement for Mauritania in March 2010 for an amount equivalent to SDR 77.28 million about 120 percent of the country’s quota in the IMF.

”Economic activity in Mauritania has been resilient, despite a severe drought and several external shocks. Inflation was contained, and fiscal and external buffers have reached
unprecedented levels.

”Nonetheless, progress in reducing poverty and unemployment is uneven, and the economy is still too dependent on developments in extractive industries,’’ it said.

PANA reports that the IMF’s Extended Credit Facility (ECF) replaced the Poverty Reduction and Growth Facility (PRGF) as the Fund’s main tool for medium-term financial support to low-income countries by providing a higher level of access to financing, concessional terms and enhanced flexibility in programme design features.

Financing under the ECF carries a zero interest rate, with a grace period of 5½ years, and a final maturity of 10 years.

The Fund reviews the level of interest rates for all concessional facilities every two years.

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