Africa

African Bank Investments Ltd., South Africa’s largest unsecured loan provider, lost about 90 percent of its market value after forecasting a record loss and saying it needs to tap investors for $791 million of fresh capital, Bloomberg News reported yesterday. African Bank is reeling after saying its chief executive officer resigned, losses would be at a record this year and it would need to tap investors for funds for the second time in less than a year.

Ghana Finance Minister Seth Terkper said that the country wants to sign an agreement with the International Monetary Fund as soon as possible, helping reduce borrowing costs for the government, Bloomberg News reported yesterday. Slumping gold and cocoa prices eroded steps taken to narrow the budget gap and made targets to cut the deficit “too ambitious,” Terkper said. The IMF program will include support for balance of payments, he said.

Kenya Planters’ Co-operative Union’s (KPCU) receivership has been lifted by the Kenya Commercial Bank. The development comes after the farmers’ union agreed to the new conditions set by the bank before it could waive the bankruptcy notice, Standard Digital reported. KPCU chairman David Gatei confirmed Monday that the matter has been agreed upon between the two organisations and a formal announcement will be made soon. “The board has worked tirelessly and we have received a lot of support from President Uhuru Kenyatta.

Civil engineering company Protech Khuthele is applying for liquidation. This was announced in a Sens statement released on Tuesday, Moneyweb reported. At the end of May, Protech announced that it had voluntarily started with for business rescue proceedings, filing on June 2. It said it had received demands for immediate repayment for project expenses which it was unable to meet. "The main cash flows that Protech currently receives are payments from debtors for current and completed projects.

South Africa’s credit rating was cut to one level above junk by Standard & Poor’s as the longest mining strike in the nation’s history threatens to drag the economy into recession, curbing government revenue, Bloomberg News reported. The foreign-currency rating was lowered to BBB- from BBB and the local-currency rating was reduced to BBB+ from A-, S&P said in a statement yesterday. The outlook on the ratings were raised to stable from negative. Fitch Ratings also lowered the outlook on its BBB grading to negative from stable.

The cost of insuring against global bank defaults has plunged to its lowest level since the financial crisis in a sign that investors are willing to bet the industry has become safer, the Financial Times reported. Buyers of bank debt often purchase “credit default swaps,” a type of derivative that helps insure their investments against a default. The price they are paying for that protection is now the lowest since the collapse of Lehman Brothers in September 2008. “We’ve gone back to pre-crisis levels,” said Brian Monteleone, analyst at Barclays.

The world must act to contain the risk of another devastating housing crash, the International Monetary Fund warned on Wednesday, as it published new data showing house prices are well above their historical average in many countries, the Financial Times reported. The warning from the IMF shows how an acceleration in global house prices from already high levels has emerged as one of the major threats to economic stability, with countries making limited progress in keeping them under control.

Ghana’s central bank is printing money to help finance the government’s budget deficit, threatening to fuel inflation and weaken a currency that’s already the worst performer in Africa this year, Bloomberg News reported. The first-quarter budget deficit of 2.1 percent of gross domestic product “was financed by the central bank, which provided funding equivalent to 10 percent of government revenue,” Carmen Altenkirch, an analyst at Fitch in London, said in an e-mailed statement today.

Nigeria is seeking buyers for the assets of distressed state-owned former telecom monopoly Nitel, the state-appointed liquidator said on Monday, Reuters reported. Nigeria opted to wind up Nitel in March after almost a decade of struggling to sell it, due to the shambolic state of its fixed lines and high levels of debt, despite the country having one of the world's fastest-growing telecoms markets. The liquidator, appointed by the government's National Council of Privatisation, said in an advert it wanted bidders with five years of telecom experience and a net worth of at least $200 million.

The Chairman of the Law Reform Commission (LRC), Cllr. Jallah Barbu, has recommended to members of the National Legislature to consider the passage of the proposed Insolvency Law, allAfrica reported on an Inquirer story. Giving background of the Insolvency Law at a Legislative Hearing on the Proposed Insolvency Law held at a local hotel on Wednesday, Cllr. Barbu said the key benefit of the law is that it provides detail legal procedures by which businesses having financial trouble and/or that have become insolvent may still manage to rebound. Cllr.