Africa

Standard & Poor’s cut Mozambique’s credit rating by four steps and warned that a proposed restructuring of about $700 million of bonds issued by a state-owned tuna-fishing company could be “tantamount to default.” The rating was lowered to CC, 10 levels below investment grade, from B-, S&P said in an e-mailed statement on Tuesday, Bloomberg News reported. Mozambique said on March 9 it wanted to switch holders of $697 million of state-guaranteed notes issued by Empresa Mocambicana de Atum SA, or Ematum, into a new interest-only bond issued by the government maturing in 2023.

Angola, facing economic and political pressures, has cut spending under its 2016 budget by 20% and is reassuring international investors it can cope with persistently low oil prices, Finance Minister Armando Manuel said Monday, The Wall Street Journal reported. Mr. Manuel said the surprise announcement Friday by President José Eduardo dos Santos to step down in 2018 shouldn’t concern the country’s foreign investors, and is part of “a normal process.” Mr. dos Santos has governed the Atlantic coast nation since 1979 and didn’t lay out a succession plan for the next leader of his party.

Mozambique has proposed a restructuring of the contentious state-backed “tuna” bond that has become a byword for the risks associated with lending foreign currency to developing economies. The bond was sold as a plan to create a national fishing industry for the southern African country via Ematum — a tuna-fishing company backed by the state, the Financial Times reported. However, the majority of the money was spent on security operations associated with the loan.

Kenya’s economic growth has failed to keep pace with its peers and the country needs to “step up a gear” if it is to achieve its long-term goals, the World Bank has concluded in a major report on east Africa’s largest economy, the Financial Times reported. The five-yearly study, “From economic growth to jobs and shared prosperity”, provides a striking contrast to recent reports from analysts and investors, who have been championing Kenya as one of the brighter emerging economies, particularly in the wake of falling commodity prices.

A decadelong commodity boom brought sleek shopping malls, tidy brick homes and dozens of private schools to this palm-pocked mining town in the heart of Africa, The Wall Street Journal reported The population doubled and incomes soared as record copper prices and a flood of Chinese investment and workers transformed a region bordering war-ravaged Congo into a beacon for Africa’s rising middle class.

A currency crunch in Africa’s top economy is escalating into a French fry shortage, The Wall Street Journal reported. U.S. dollars have become increasingly scarce over the past 18 months as global oil prices crashed, depriving Nigeria of most of its export revenue. So the central bank has toughened rules governing how easily businesses can purchase them. That helped the central bank freeze its reserves at about $28 billion, down around 20% from a year ago. But commerce is paying the price.

When Pravin Gordhan, South Africa’s finance minister, gives his budget on Wednesday, he not only has to deliver on the task of rebalancing revenues and spending, but also restore the credibility of one of the most traded emerging markets, the Financial Times reported. Analysts say the budget will arguably be the most intensely watched of South Africa’s democratic era as investors seek to gauge the trajectory the country is taking as an economic crisis grips.

Anglo American said on Tuesday it plans to sell its iron ore, coal and nickel units as part of a sweeping strategic overhaul to cope with a commodities rout that has triggered a fight for survival even among heavyweight miners, the Irish Times reported on a Reuters story. The global mining group plans to concentrate on its De Beers diamond business as well as platinum and copper operations as it dumps loss-making bulk commodities.

Jacob Zuma has vowed urgent “concrete action” to prevent South Africa’s debt from being downgraded to junk as pressures mount on the country’s $350bn economy. In an indication of the difficulties facing the bellwether emerging market, the South African president told the Financial Times the government needed to change tack on issues such as co-operating with business and curbing spending.

South Africa’s unraveling economy and a string of corruption scandals are coalescing into the gravest challenge for President Jacob Zuma in seven years in office, The Wall Street Journal reported. Those pressures transformed Mr. Zuma’s state-of-the-nation address Thursday into a chaotic condemnation of his policy blunders and a reflection of mounting public discontent, underscored by opposition calls to impeach him. Lawmakers from the firebrand Economic Freedom Fighters party shouted down Speaker Baleka Mbete before she could invite Mr. Zuma to speak.