Africa

Nigeria’s central bank beefed up the supply of banknotes to lenders to end shortages that have hampered individual and business transactions and crippled the cash-based economy since January, Bloomberg News reported. Most lenders including United Bank for Africa Plc, Zenith Bank Plc and FBN Holdings Plc called in staff on Saturday and Sunday to help customers access cash in banks or via automated teller machines. The disbursement, in compliance with a central bank directive, is being monitored “personally” by Governor Godwin Emefiele, according to spokesman Isa Abdulmumin.

Nigeria’s central bank increased the key interest rate to the highest level since it was adopted in 2006 and plans to extend monetary tightening to contain inflation and bolster the differential that makes local assets attractive to foreign investors, Reuters reported. The monetary policy committee raised the benchmark rate for a sixth straight meeting to 18% from 17.5% on Tuesday. That was the smallest increase in its current tightening cycle.

Nigeria’s central bank has extended the timeline to swap out its old currency for redesigned notes after the change triggered a cash shortage, forcing businesses to close and leaving millions unable to withdraw their money, the Associated Press reported. The Central Bank of Nigeria announced on Monday that the old notes of 200 naira (43 U.S. cents), 500 naira ($1.08) and 1,000 naira ($2.16) will remain legal tender until Dec. 31.

Ghana’s embattled cedi has rebounded 5% against the dollar in March as the government’s decision to suspend external debt payments eased demand for greenbacks in the local foreign exchange market, Bloomberg News reported. The west African nation unilaterally stopped payments on eurobonds and other external debt in December, pending an agreement with creditors that is needed to unlock an International Monetary Fund bailout. Traders said the impact is beginning to filter through to the currency, after it lost ground in the first two months of the year.

A panel of investors and banks has ruled Ghana’s missed coupon payments on its foreign denominated bonds counts as a failure-to-pay event, paving the way for a payout of the default-insurance contracts tied to the country’s debt, Bloomberg News reported. The Credit Derivatives Determinations Committee (CDDC) made the decision at a meeting held on Monday, according to a notice on the panel’s website on Friday. Ghana skipped payment of interests on Jan. 18 of a $1 billion eurobond maturing in 2026.

Nigeria’s top court ordered the central bank to halt its removal of old high-denomination banknotes from circulation, a move that’s created an acute cash shortage in Africa’s largest economy, Bloomberg News reported. The Supreme Court decided Friday that the Central Bank of Nigeria’s plan to discontinue the use of old bills by Feb. 10 was unconstitutional. The judges ruled that the notes should remain in circulation until the end of the year, Nasir El-Rufai, one of the state governors that brought the suit, told reporters afterwards.

Ghana’s eurobonds sank to the lowest level in nearly three months after the country missed a self-imposed deadline to restructure its bilateral debt and S&P Global Ratings warned that bondholders face larger losses than anticipated, Bloomberg News reported. Finance Minister Ken Ofori-Atta wanted to reach a restructuring agreement with bilateral creditors by the end of February to help qualify for a $3 billion International Monetary Fund program. So far, Ghana has only partially completed the domestic-debt part of the exchange plan.

South Africa and Nigeria have been placed on a global financial watchdog’s so-called gray list denoting nations with shortcomings in tackling illicit financial flows, a move that scars their international reputations and may raise costs for banks and asset managers, Bloomberg News reported. The decisions were announced by the Financial Action Task Force on Friday. While South Africa’s inclusion on the list was widely flagged as a risk, the possible addition of Nigeria attracted little attention. Morocco and Cambodia were taken off the list after improving their controls.

South Africa is offering a total of 13 billion rand ($710 million) in tax incentives to businesses and individuals to encourage investment in renewable energy projects and offset the impact of higher fuel and food prices, Bloomberg News reported. Africa’s most industrialized economy is experiencing its worst bout of power rationing yet, with outages occurring for more than 200 days in 2022 and every day this year, because the state power utility can’t meet demand from its old and poorly maintained plants.

A shuttered South African airline sued Boeing Co. for fraud over its agreement to buy eight 737 MAX planes and seeks damages of at least $83 million, Reuters reported. Boeing "placed profits over safety and led with a plan of deception," Comair's suit filed Monday in U.S. District Court in Seattle said. Boeing declined to comment. Comair said that Boeing committed fraud over its failure to disclose problems with a key flight control system tied to two fatal 737 MAX crashes in 2018 and 2019 in Indonesia and Ethiopia that killed 346 people and led to the MAX's 20-month grounding.