Yemen reaches agreement with IMF on $560m loan

August 10, 2014 8:54 am

Planning and Finance Minister Mohammed al-Saadi said that Yemen has reached agreement with the International Monetary Fund on a $560m loan, after the government cut fuel subsidies and ordered curbs on public spending, Reuters has reported. The second poorest Arab country has struggled to pay public sector salaries and finance food and energy imports, leading to power cuts and fuel shortages since 2011 as a fight against al Qaeda militants and other rebel groups consumes state funds. “The funds would be paid over three years and the government expected the first payment within two months,” he added. Yemeni officials hope the IMF deal will help unlock more funds from donor countries, which have so far been reluctant to contribute due to fears of corruption and a lack of progress in economic reforms. “There is an improvement in our revenues and the IMF will support the government’s position before donor countries,” Saadi said.