Africa

The Private Sector Federation (PSF) has called for a review of the 2017 draft law on insolvency and bankruptcy, saying it is silent on some key issues, like how to handle cases of bankruptcy among individuals and NGOs, the New Times reported. Deus Kayitabarwa, the director of advocacy at the Private Sector Federation (PSF), explained that the proposed law mainly focuses on business enterprises, but is silent on how an individual or a non-governmental organisation goes bankrupt.

Angola has announced plans to ditch its currency peg to the dollar and restructure its debts, becoming the latest previously high-flying African country to bite the default bullet, the Financial Times reported. Jose de Lima Massano, the central bank governor, and Archer Mangueira, the country’s finance minister, announced at a press conference on Wednesday that Angola – the continent’s second-biggest oil exporter after Nigeria – would have to shift to a currency trading band and “renegotiate” its debts, according to wire reports.

For bond investors, Africa was a happy hunting ground last year. Its local-currency and dollar securities easily outperformed those of emerging markets overall as investors piled into a continent offering high yields and starting to recover from the commodity bust of three years ago. But risks abound, among them policy tightening in advanced economies, local and global politics, weakening currencies and another fall in oil prices, Bloomberg News reported. And then there is credit risk.

Kenya Airways will be almost 90 per cent owned by the Kenyan government and a group of 11 local banks under a restructuring deal to be unveiled on Monday, after the terms of a debt for equity swap for the lossmaking airline were agreed, the Financial Times reported. The Kenyan government will own 48.9 per cent of Kenya Airways and the banks 38.1 per cent after the debt-for-equity swap, agreed in principle in June.

Nigerian President Muhammadu Buhari projects the nation’s budget shortfall will narrow next year as revenue from non-oil sources increases, Bloomberg News reported. Buhari asked lawmakers on Tuesday to approve the 2018 budget with a deficit of 2 trillion naira ($5.6 billion), compared to this year’s estimated fiscal gap of 2.356 trillion naira. Non-oil revenue is projected to triple to 4.2 trillion naira and will include funds raised from “restructuring of government’s equity in joint ventures,” he said in his budget speech in the capital, Abuja, without providing more details.

South African Airways will meet a group of domestic lenders on Tuesday to negotiate the refinancing of about 6 billion rand ($423 million) in outstanding loans, according to its new chief executive officer, Bloomberg News reported. The banks have in principle agreed to extend the loan terms, Vuyani Jarana, who took the helm at the loss-making airline on Nov. 1, said during an interview at Bloomberg’s Johannesburg office on Monday. The group is led by Nedbank Group Ltd. and includes FirstRand Ltd., Standard Bank Group Ltd., Barclays Africa Group Ltd. and Investec Plc.

Kenya’s Nakumatt is seeking court protection to rebuild its fortunes after creditors demanded millions of dollars owed by a company that grew from a small Rift Valley bed shop to become East Africa’s biggest supermarket chain, Reuters reported. One source close to the company, whose flagship Nairobi store was destroyed in the 2013 Westgate attack by Somali militants, said it owed creditors including landlords and suppliers as much as 20 billion shillings ($193 million). In January, the managing director of the chain, Atul Shah, told Reuters the debt then stood at $150 million.

The rand and South African bonds extended declines as foreign investors dumped the country’s notes in the wake of government forecasts for higher public debt and wider budget deficits in the next three years, Bloomberg News reported. Stocks rose to a record as gains for rand hedges offset drops for banks and retailers. The nation’s currency extended its longest losing streak in a month, while the yield on benchmark 10-year notes rose to the highest in 16 months.

Nigeria’s Senate voted in favour on Tuesday of launching an investigation into the default on a $1.2 billion loan earlier this year by Etisalat Nigeria and into how the funds were used. Etisalat Nigeria, now called 9mobile, took out a syndicated loan from 13 Nigerian banks but failed to make repayments earlier this year, Reuters reported. “The Senate is aware of allegations that the loans had been diverted to other uses not related to the business, as there was no evidence of what the company did with the loans,” the upper house said in an order paper published on Twitter.

Nigerian lenders have picked Barclays to try to find new investors for debt-laden 9mobile, two banking sources said on Thursday. Barclays has started work on the mandate and is in the process of setting up a database for prospective investors to conduct due diligence, they said. Banking sources had previously said Citigroup and Standard Bank were in the running for the role, the International New York Times reported on a Reuters story. But the lenders decided against them due to their previous links with 9mobile, the sources said on Thursday.