Ukraine Secures $18bn Lifeline From IMF

L-R: Solicitor General of the Federation, Abdullahi Yola, Permanent Secretary, Ministry of Power, Dr Godknows Igali, Minister of Transport, Senator Idris Umar and Vice President Namadi Sambo at the Joint Meeting of NCP with the Governing Board of Niger Delta Power Holding Company Limited in Abuja, recently.

The International Monetary Fund (IMF) has agreed to lend Ukraine up to $18 billion over the next two years as its new government tries to stave off economic collapse.
Kiev has been running dangerously low on cash to pay for imports and service its debts since the ousting of pro-Moscow former President Vitkor Yanukovych last month, which killed off a $15 billion financial lifeline from Russia.
The CNN reports that with economic turmoil rising as a result of Russia’s annexation of Crimea, Ukraine was facing bankruptcy and a slump in output.
Foreign exchange reserves have been decimated by a sharp fall in exports and by attempts — now abandoned — to prop up the hryvnia currency. At the beginning of March, Ukraine had only enough cash to finance two months’ worth of imports.
“The IMF package should be sufficient to prevent the country falling into a full-blown balance of payments crisis, in which the hrvynia would drop sharply and output would collapse,” said William Jackson, emerging market economist at Capital Economics.
In return for the bailout, Ukraine will implement a program of unpopular reforms aimed at stabilizing the economy and creating the conditions for a return to sustained growth.
Central to the program are commitments by Ukraine to tackle corruption — a major concern of international lenders — and reforming the country’s energy market, including the gradual withdrawal of subsidies on natural gas.