“We are witnessing a continuous demand from African countries for IMF support, including new programs, extensions, and increased [funding], driven by persistent shocks and elevated debt pressures,” an IMF spokesperson told Bloomberg, noting that the Fund has already financed these economies with nearly $70 billion (€60 billion) since the COVID-19 pandemic.
The IMF has over 20 financial adjustment programs in Africa, including in Portuguese-speaking countries such as Cape Verde, Guinea-Bissau, and São Tomé and Príncipe. It is also in negotiations to restart Mozambique’s program, leaving only Angola and Equatorial Guinea out, the latter having concluded a technical support program without financing in July.
Nations like Malawi, Kenya, and Mozambique have abandoned their programs due to unmet targets but are in negotiations with the Fund. Meanwhile, Uganda and Senegal are seeking new programs, and Zambia is negotiating a one-year extension of its ongoing adjustment.
Africa’s external debt has climbed to over $650 billion (€552 billion), with debt service costs projected to reach nearly $90 billion (€76.4 billion) in 2024, according to the United Nations.
These high debt levels allow foreign investors to impose higher interest rates on loans or debt issuances by these countries, prompting a growing reliance on domestic debt markets. This trend has raised concerns about banks’ financial capacity to support local businesses.
In Cape Verde, the IMF announced in July an extension of the Extended Credit Facility (ECF) by 15 months and an increase in funding to approximately €60 million.
The IMF board also approved, at that time, a 15-month extension of the Resilience and Sustainability Facility (RSF) funding agreement, aimed at supporting climate investments, along with rescheduling the availability dates under this program.
In Guinea-Bissau, the IMF is implementing an ECF, under which it has already financed this Portuguese-speaking economy with approximately €40 million.
Mozambique’s financial adjustment program was halted at the end of last year following significant target misses due to violence that erupted in the last quarter after the presidential election results. However, at the end of August, the IMF stated discussions about a new financial adjustment program would continue “in the coming months.”
In São Tomé and Príncipe, the IMF is running an ECF expected to last almost until the end of 2027, disbursing over €21 million in the process.
