Africa

Nigeria's state-owned AMCON has recovered 681.5 billion naira ($2.2 bln) over the past six years from debtors in the form of cash, properties and shares, it said on Monday. The Asset Management Corporation of Nigeria (AMCON) was set up in 2010 to absorb banking sector-wide non-performing loans in exchange for government bonds, after the central bank rescued nine weak lenders from collapse in 2009, Reuters reported. Read more.

“An indebted Africa cannot be a rising Africa,” Akinwumi Adesina, head of the African Development Bank, told a gathering of the region’s heads of state, senior ministers and leading financiers last year. That warning is acquiring greater weight as government debt burdens tick up in many African countries on the back of a rising dollar, low commodity prices, rapid borrowing during the low interest rate era and sliding currencies, the Financial Times reported. The problem is not unique to Africa.

Mozambique missed a $119 million payment due Tuesday on a loan Credit Suisse Group AG arranged, the second debt repayment the government failed to make in as many months, Bloomberg News reported. The $622 million facility was taken out by state-owned ProIndicus and was supposed to fund the purchase of boats and radar systems to protect the country’s Indian Ocean coastline, where companies including Italy’s Eni SpA and U.S.-based Anadarko Petroleum Corp. have large offshore gas reserves. Credit Suisse on Tuesday declined to comment on its financing of Mozambique.

Slumping cocoa prices are testing to the limit top producer Ivory Coast’s efforts to ensure stability for farmers, heightening risks for the domestic economy and world markets, Bloomberg News reported. Authorities have warned they’ll have to cut payments to growers. That follows a wave of defaults by local exporters who’d bet on higher prices, costing the government more than $300 million and pushing cocoa futures even lower.

A seasoned economist in Ghana likens his country to a plane perpetually trundling down the runway, never quite taking off. Extend the metaphor along the coast, and Nigeria’s economy, the largest in Africa in dollar terms before the collapse in world oil prices, has been grounded, the Financial Times reported. In the throes of its first recession in 25 years, inflation is soaring, factories closing and the fabled middle class has been retreating to the place from which it only recently re-emerged.

Mozambique will seek to negotiate a restructuring of part of its debt, its prime minister said on Wednesday. The southern African nation is struggling to repay loans of more than $2 billion that were not approved by parliament or disclosed publicly, Reuters reported. "We will negotiate with the creditors to restructure these debts," said Prime Minister Carlos Agostinho do Rosario, adding that the nation wants to honour its debts "in a balanced way", the state news agency reported.

Barclays Bank of Kenya will focus on growing its non-interest income after a jump in bad debts and a government cap on lending rates cut its 2016 pretax profit by 10 percent, it said on Wednesday. The cap on lending rates, introduced last September, was expected to squeeze margins and profits at Kenyan banks, the International New York Times reported on a Reuters story. The cap limits commercial bank lending rates at 400 basis points above the central bank rate, which stands at 10 percent. The government brought in the cap because it said lending rates were too high.

Nigeria's government is taking over the country's biggest airline, Arik Air, to "instill sanity" and prevent "a major catastrophe" in the aviation industry of Africa's most populous nation, the receivership corporation said Thursday, the International New York Times reported on an Associated Press story. Asset Management Corporation of Nigeria said the heavily indebted airline has not paid workers for months and has had aircraft seized for non-payment of leases.

After Mozambique’s default, investors are wondering who’s next in Africa. Bloomberg’s sovereign credit risk model -- which uses data including budget deficits, foreign reserves, non-performing bank loans and political instability to calculate default probabilities -- flags four candidates among African Eurobond issuers: Senegal, Tunisia, Ghana and Zambia. Mozambique became the first African country to default on dollar bonds since Ivory Coast in 2011 when it failed to settle an almost $60 million coupon initially due in January. It had a 15-day grace period that ended on Thursday.

Mozambique's default on a coupon payment for its dollar-denominated bond last week was "unnecessary" and a step backwards for the country's relationship with the holders of the debt, a group of creditors said in a statement on Monday, Reuters reported. Mozambique announced a week ago it would not make the $59.8 million payment to holders of its 2023 bond due on Jan. 18 because A deteriorating economic and fiscal situation made its ability to repay debt this year extremely limited.