Africa

Zimbabwe is close to putting the final touches to a debt-arrears package that could see it receive an emergency injection of funds from the International Monetary Fund and other multilateral institutions into its cash-starved, drought-stricken economy, Zimbabwean officials said. The southern African nation — which has been treated as a pariah by the west for years — desperately needs money to pay civil service salaries, import food and alleviate a cash crunch.

Nigeria's Niger state plans to seek bondholders' approval next month to restructure its 21 billion naira ($74 mln) worth of debt, its adviser said on Thursday, as it seeks ways to ease strains caused by a plunge in crucial oil revenues. Niger, which lies in northwestern Nigeria and is home to around 4 million people, plans to meet bondholders on July 28 to approve an extension to its five-year debt due in 2018 to 2023 and an increase of its coupon from 14 percent to 16 percent.

The International Monetary Fund has added its voice to the growing diplomatic clamor for an international audit of Mozambique’s finances. IMF staff traveled to Mozambique in recent days to confer with its government on a worsening economic performance and poor financial governance after more than $1 billion of previously secret loans were disclosed to international donors and investors in April.

Kenya's NIC Bank has been appointed as a consultant to assess the assets and liabilities of Imperial Bank, which was put into receivership in October after fraud was uncovered, the central bank said on Tuesday, Reuters reported. The appointment of NIC Bank, a mid-tier bank, would ensure customers receive more of their deposits after the closed bank's shareholders failed to support a proposal for swiftly reopening Imperial, the central bank said in a statement. Three small or medium-sized banks in Kenya have been closed in less than a year, unnerving investors.

Nigeria’s central bank abandoned a currency peg that economists and businesses had long blamed for exacerbating a slide toward recession in Africa’s largest economy, The Wall Street Journal reported. Central Bank of Nigeria Gov. Godwin Emefiele said Wednesday that the country’s naira currency will trade at a market-determined rate beginning Monday, rather than the 197-per-U.S.-dollar level the bank has mandated for more than a year. The black market exchange rate has shot to about 370 naira to the dollar after the central bank choked off most legal channels for procuring greenbacks.

South Africa's economy looked set on Tuesday for its first quarterly contraction in a year after measures of business sentiment tumbled, dragged down by shrinking consumer spending that has sunk hopes of a retail-led recovery, Reuters reported. Rising inflation due to severe drought and a weakening currency have triggered a steep rise in lending rates over the past two years, strangling sentiment among businesses and consumers in Africa's most industrialised economy.

Nigerian oil firm Oando said on Monday it has secured a 94.6 billion naira ($475 mln) loan facility from 10 domestic banks under plans to restructure its finances and return to profitability this year, Reuters reported. The financing led by Access Bank, includes Diamond Bank, Ecobank, FCMB, Fidelity Bank, Stanbic IBTC Bank, UBA , Union Bank and Zenith Bank. The facility is a five-year term loan, paying Nigerian interbank rate plus 2 percentage points with a three-year moratorium on principal.

Mozambique is unwilling to convert a loan extended to a state-owned company into sovereign debt to avoid a default, according to an official familiar with the situation, who asked not to be identified because he’s not authorized to speak on the matter, Bloomberg News reported. Talks between the government and creditors to restructure the $535 million loan to Mozambique Asset Management, or MAM, were still going on, the official said from the capital, Maputo.

Plummeting oil prices have set off an economic unraveling in Nigeria, one of the world’s top oil producers, and the collective anger of a fed-up nation was pouring out, the International New York Times reported. “Starvation in the land of plenty,” said Tony Usidamen, a public relations consultant waiting for fuel. For months, many Nigerians have endured painfully long lines for gasoline and power failures that last for days — with no fuel for backup generators. Scant power means water cuts for homes that rely on electricity to pump it.

Until recently, Mozambique appeared to be riding a natural gas-fuelled wave, with predictions of vast riches filling the coffers of the impoverished southern African nation. Today, the country is facing what analysts describe as its worst crisis since a civil war raged more than 20 years ago, triggered by revelations that state entities borrowed $1.4bn — equivalent to 10 per cent of gross domestic product — in previously undisclosed loans. The saga is being described by observers as one of Africa’s worst cases of hidden borrowing in recent years.