NAIROBI, April 15 (Xinhua) -- Kenya's foreign exchange reserves declined 9.42 billion shillings (about 70 million U.S. dollars) this week, piling pressure on the shilling that similarly fell to a new low, the Central Bank of Kenya said in its update of the financial markets released Friday evening.

The reserves stood at 6.38 billion dollars at the end of the week, an equivalent of 3.56 months of import cover, according to the apex bank.

This was a decline from 6.45 billion dollars or 3.60 months of import cover the previous week.

The shilling closed Friday at 135 against the dollar, the lowest rate ever.

The local currency has been on a free fall against the dollar, declining over 7 percent year on year with the Central Bank experiencing challenges in supporting it due to dwindling forex reserves.

The bank, however, said the foreign exchange reserves remain adequate.

"This meets the statutory requirement to endeavor to maintain at least four months of import cover," said the apex bank.

To save its forex reserves, Kenya this week imported 165,000 metric tons of gasoline, diesel and jet fuel from the Gulf in a government-to-government deal that is expected to reduce dollar demand and cushion the shilling. - Xinhua

Burundi has received $261 million from the International Monetary Fund (IMF) — a first in eight years — that will go towards supporting its economic recovery.

This follows meetings between the IMF team led by Mame Astou Diouf, the Mission Chief for Burundi, who visited Bujumbura in February.

In a statement, IMF said together with Burundian authorities, it had reached a staff-level agreement on a 40-month arrangement under the Extended Credit Facility (ECF) with access of $261.7 million. The ECF provides medium-term financial assistance to low-income countries (LICs) with protracted balance of payments problems.

“This is the first Upper Credit Tranche-quality programme for Burundi supported by the Fund since 2015. The programme aims to support a calibrated macroeconomic policy mix to restore external sustainability, strengthen debt sustainability, while supporting economic recovery from shocks and creating fiscal space for accelerated and inclusive growth,” IMF said, adding that discussions held with the Burundian authorities covered recent macro-developments, the impact of the various domestic and external shocks and Burundi’s macro-policy plans and structural reform agenda.

Burundi’s economy has been hit by several shocks, halting its recovery from the negative effects of the Covid-19 pandemic and heightening its macroeconomic imbalances.

Delayed rainfall in the last quarter of 2022 and limited availability of fertiliser — driven by higher prices in the context of limited foreign exchange (FX) availability for imports, supply disruptions linked to the war in Ukraine, and insufficient domestic production to cover local farmers’ demand — hampered agricultural production.

Outbreaks of the rift valley and porcine fevers impacted Burundi’s livestock production.

Inflation

Higher import prices triggered by the war in Ukraine have pushed up inflation, widened the fiscal deficit, and heightened current account pressures.

“Real GDP growth is estimated to have slowed down to 1.8 percent in 2022 (from 3.1 percent in 2021) but is projected to rebound to 3.3 percent in 2023,” the find said.

Like many countries in the East African region, delayed harvest and lower crop of 2022 will impact agricultural production in 2023 owing to reduced land and seed availability.

For Burundi, inflation averaged 18.9 percent in 2022 and has continued accelerating (28.6 percent year-on-year at the end of January 2023), driven by food prices.

“It is projected to remain high, at around 18 percent in 2023,” IMF said.

Macroeconomic reform agenda

With the support of the ECF arrangement, Burundi plans to have a broad-based near- and medium-term macroeconomic reform agenda aimed at tackling key challenges:

According to IMF, Burundi’s fiscal position is projected to weaken in the 2022/23 financial year because of slow revenue collection from measures adopted in the last two budget laws and spending overruns including large fertiliser subsidies.

IMF said that a return to fiscal consolidation is planned starting in the 2023/24 financial year, building on strengthened revenue collection efforts and current spending restraint while preserving social spending and efficient investment scaling up under the authorities’ Public Investment Plan.

“External rebalancing and unwinding monetary financing. The central bank (BRB) is committed to recalibrating monetary and external policies to address the below-adequacy FX reserves (1.5 months of imports at end-2022) and large parallel FX market premium. In preparation for the external rebalancing, the BRB has initiated FX market liberalisation and reduced financing provision to commercial banks. This will also help curb inflation pressures. Limiting BRB financing to the budget will also be essential,” it said. - Allan Olingo, The EastAfrican

Tanzania's main opposition parties have made the country's rising cost of living their common weapon to woo supporters of the ruling Chama cha Mapinduzi to their side.

Both Chadema and ACT Wazalendo focused on painting vivid pictures of government inertia in the wake of spiralling prices of food and other basic commodities to drum up new public support.

Just last weekend, ACT Wazalendo held its first public rally since the ban on political rallies was lifted, touting a new party brand under the slogan 'Taifa la Wote, Maslahi ya Wote' (Nation for all, benefits for all) in Dar es Salaam's Mbagala suburb.

Party leader Zitto Kabwe used the platform to address what he called "the elephant in the room” living costs that he said were becoming a social problem big enough to relegate Tanzania's entire democratic reforms debate to the back seat.

"The government keeps using the war in Ukraine and Covid-19 as excuses but there are still interventions that it can make to address this crisis in our midst. It needs to provide us with answers right away," Mr Kabwe said to loud cheers.

Chadema's leaders pegged the rising cost of living to the party's main demand for a new constitution as soon as possible in their own initial remobilisation rallies held mainly in Dar es Salaam and around the Lake Victoria zone.

According to chairman Freeman Mbowe, the party is looking to "rebuild a strong national movement by going door to door and street by street."

"We will be addressing a big weakness among Tanzanians in terms of political passiveness and low participation levels despite being exposed to increasingly frightening economic realities," Mr Mbowe told a rally in Mwanza.

Addressing last Sunday's ACT Wazalendo inaugural rally in Dar es Salaam, Mr Kabwe proposed that the state-run National Food Reserve Agency should start collecting crop harvests from all farmers in the country and distribute the food itself with price caps "to ease the burden on consumers during these difficult times."

Prevalent national challenges

ACT-Wazalendo chairman Juma Duni Haji said the party also planned to address other prevalent national challenges related to water availability, healthcare services and irrigation for farming "as matters of priority."

“CCM has for so many years tried to solve these problems in various ways but we still don't have a clear idea of what this country should look like 60 years from now. Let's join hands to get this country to where it needs to be,” Duni said.

He also urged the government to release a timetable for promised electoral system changes by November this year.

"Beyond that there won't be enough time left to implement any reforms before the next elections cycle begins, and we will feel like we've been tricked," Duni said.

Elections

Tanzania will hold civic elections in late 2024 followed by presidential and parliamentary polls in 2025.

ACT Wazalendo is presently planning more rallies in the Zanzibar archipelago before moving on to Tanga, Coast region and Kigoma which are all considered strongholds of the party.

Chadema's top hierarchy, including vice chairman Tundu Lissu who has returned from a long period of exile in Belgium, held a three-day private retreat at a Dar es Salaam hotel in late January to plot their next move in the new political space.

Lissu and fellow Chadema stalwart Godbless Lema, who has also announced his pending return from exile in Canada in March, are expected to be important spearheads adding a missing element of firebrand impetus when the party next takes to public platforms. - BOB KARASHANI, The EastAfrican