Skip to main content

IMF, Lebanon strike conditional deal on $3 bn aid

A handout picture provided by the Lebanese photo agency Dalati and Nohra on April 7, 2022 shows Lebanon's Prime Minister Najib Mikati (3rd R) holding a press conference alongside an International Monetary Fund (IMF) delegation
— Beirut (AFP)

The IMF announced Thursday a conditional agreement to provide Lebanon with $3 billion in aid to help it emerge from a severe economic crisis, following months of negotiations.

The country has been battered by triple-digit inflation, soaring poverty rates and the collapse of its currency since a 2020 debt default.

Officials in Beirut applauded the announcement as it will open the door to additional financial support from foreign donors.

But experts reiterated doubts over the willingness of Lebanon's political elite, widely blamed for endemic corruption, to implement the reforms needed to resuscitate the economy.

The deal is "a visa stamp for donor countries to begin co-operating with Lebanon and to put Lebanon back on the global finance map", Prime Minister Najib Mikati told reporters on an upbeat note after the International Monetary Fund announcement of the "staff-level agreement".

Saudi Arabia, a key financial backer, announced Thursday it was sending an ambassador to Lebanon for the first time since a row broke out five months ago over the Riyadh-led military intervention in Yemen.

Fellow oil-rich Gulf state Kuwait, which sided with Riyadh in the row, also announced that its ambassador would return "in response to appeals of moderate national forces" in Lebanon.

Ernesto Ramirez Rigo, who led the IMF mission to Lebanon, said that once approved by the global crisis lender's board, the 46-month financing programme will "support the authorities' reform strategy to restore growth and financial sustainability".

However, approval is contingent on "timely implementation of all prior actions and confirmation of international partners' financial support", he said in a statement.

Rigo blamed "many years of unsustainable macroeconomic policies" for the crisis in Lebanon that came to a head in 2020 when it defaulted on its sovereign debt for the first time in its history.

The Lebanese pound has lost about 90 percent of its value on the black market and four out of five Lebanese now live below the poverty line, according to the United Nations.

The situation has been exacerbated by soaring inflation, the Covid-19 pandemic and the devastating August 2020 explosion at Beirut port.

"Lebanon is facing an unprecedented crisis, which has led to a dramatic economic contraction and a large increase in poverty, unemployment, and emigration," Rigo said, adding that the programme will support increased social spending.

- 'Highly unlikely' -

The aid would be released under the global lender's "Extended Fund Facility" but only after parliament in Beirut approves a 2022 budget and a new bank secrecy law to fight corruption.

It also will require cabinet approval of a debt restructuring plan, Rigo said.

The cabinet must likewise approve a bank restructuring strategy.

A former vice governor of Lebanon's central bank, Nasser Saidi, said he had doubts that such reforms would ever materialise.

"This is good news if the set of Monetary-Fiscal-Governance-Structural reforms including banking sector restructuring are implemented. Highly unlikely!" he wrote on Twitter.

In a joint statement with President Michel Aoun, Mikati said the IMF deal would help "to revive Lebanon and put it on the path of recovery and solutions".

Cabinet and parliament must approve the agreement and the reforms demanded by the IMF before the deal goes through.

For more than two years, the ruling elite has been unable to lift the country out of crisis, as it is beset by political horsetrading between rival factions that have repeatedly left Lebanon without a government.

Financial analyst Henri Chaoul dismissed the IMF agreement as a "non-event".

"The prior actions will never be done. We are light years away," he told AFP.

"We have 30 years of track record with a perfect-fit regression line."

Join hundreds of Middle East professionals with Al-Monitor PRO.

Business and policy professionals use PRO to monitor the regional economy and improve their reports, memos and presentations. Try it for free and cancel anytime.

Already a Member? Sign in


The Middle East's Best Newsletters

Join over 50,000 readers who access our journalists dedicated newsletters, covering the top political, security, business and tech issues across the region each week.
Delivered straight to your inbox.


What's included:
Our Expertise

Free newsletters available:

  • The Takeaway & Week in Review
  • Middle East Minute (AM)
  • Daily Briefing (PM)
  • Business & Tech Briefing
  • Security Briefing
  • Gulf Briefing
  • Israel Briefing
  • Palestine Briefing
  • Turkey Briefing
  • Iraq Briefing

Premium Membership

Join the Middle East's most notable experts for premium memos, trend reports, live video Q&A, and intimate in-person events, each detailing exclusive insights on business and geopolitical trends shaping the region.

$25.00 / month
billed annually

Become Member Start with 1-week free trial
What's included:
Our Expertise AI-driven

Memos - premium analytical writing: actionable insights on markets and geopolitics.

Live Video Q&A - Hear from our top journalists and regional experts.

Special Events - Intimate in-person events with business & political VIPs.

Trend Reports - Deep dive analysis on market updates.

Text Alerts - Be the first to get breaking news, exclusives, and PRO content.

All premium Industry Newsletters - Monitor the Middle East's most important industries. Prioritize your target industries for weekly review:

  • Capital Markets & Private Equity
  • Venture Capital & Startups
  • Green Energy
  • Supply Chain
  • Sustainable Development
  • Leading Edge Technology
  • Oil & Gas
  • Real Estate & Construction
  • Banking

We also offer team plans. Please send an email to and we'll onboard your team.

Already a Member? Sign in

Start your PRO membership today.

Join the Middle East's top business and policy professionals to access exclusive PRO insights today.

Join Al-Monitor PRO Start with 1-week free trial