South Africa started a fresh battle with labor groups in its effort to revive the bankrupt state airline, offering three months of wages to employees who haven’t been paid since March, Bloomberg News reported. The government’s Department of Public Enterprises and the National Union of Metalworkers of South Africa agreed to discuss the matter later on Tuesday, according to a spokeswoman for the labor group. Numsa and the South African Cabin Crew Association, another union, had expected members to be paid in full, in line with the country’s legal framework for a business-rescue process.
Resources Per Country
Zambian authorities formally requested a financing arrangement from the International Monetary Fund (IMF), the Fund said on Tuesday, to help the southern African copper producer navigate a debt crisis, Reuters reported. Zambia became Africa’s first pandemic-era sovereign default last month after it failed to pay a $42.5 million coupon on one of its Eurobonds. Zambia’s presidency released a photo of President Edgar Lungu meeting with the head of the IMF’s Africa department Abebe Selassie in the capital Lusaka on Tuesday.
Relations between the United States and China promise to be fraught even under President-elect Joe Biden’s administration, Bloomberg News reported in a commentary. There’s one area where the two rivals can and should cooperate immediately, however: to head off a looming debt crisis that threatens to hurl millions into poverty across Africa, Latin America and Asia. When many of the world’s poorest countries last found themselves unable to service their debts 25 years ago, the U.S. led a global effort — the 1996 Highly Indebted Poor Countries Initiative — to forgive much of that debt.
Global debt is set to reach $200 trillion, or 265% of the world’s annual economic output, by the end of the year, S&P Global has forecast - although it doesn’t expect a crisis any time soon, Reuters reported. The credit ratings giant said it amounted to a 14-point rise as a percentage of world GDP, having been amplified by both the economic plunge caused by COVID and the extra borrowing that governments, firms and households have had to resort to. “Global debt-to-GDP has been trending up for many years; the pandemic simply exacerbated the rise,” S&P’s report said.
The South African government has transferred 1.5 billion rand ($98 million) to administrators for national airline South African Airways (SAA) but the funds cannot be used yet, the administrators said on Thursday, Reuters reported. The administrators said the conditions the Department of Public Enterprises (DPE) attached to how the money should be spent were in contravention of labour and companies laws. “We are unable to utilise the funds until the conditions have been amended by the DPE,” they added in a statement. A DPE spokesman said the department would comment later.
South Africa’s National Treasury and the state-owned Land and Agricultural Development Bank are being accused of dragging their heels in negotiating a rescue package for the stricken lender, leaving creditors in the dark as debt repayments loom, Bloomberg News reported. Asset managers and other lenders are yet to receive a response to their queries about financial covenants and the mechanism of a new bond program that will be 60% backed by the government, according to the country’s biggest specialist fixed-income money manager.
Faced with mounting debt servicing obligations, the federal government is planning to push for debt restructuring, Vanguard Media Limited reported. The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, who gave the indication while featuring on a Nigerian Television Authority, NTA, programme, yesterday, said the current debt servicing obligations were taking too much of the nation’s resources, especially at a time of low revenue generation.
The G20 summit ended last weekend with a call for “immediate and vigorous measures” to address the effects of the Covid-19 pandemic. Among these is a looming sovereign debt crisis, particularly in Africa, the Financial Times reported in a commentary. Urgent and collective action is needed there to stave off that crisis and to maintain the invaluable social gains that the continent has made. In the early 2000s, multilateral debt relief provided a much needed reprieve for heavily indebted, poor countries around the world. Many African nations took the opportunity.
Zambia’s state mining arm ZCCM-IH plans to appeal a court ruling in favour of Vedanta , which has sought arbitration in a dispute over its jointly owned copper mine that is facing liquidation, the mining minister said. India-based Vedanta has been locked in a protracted dispute with the Zambian government since May 2019, when Lusaka appointed a liquidator for the mine. “ZCCM-IH has already indicated that they are appealing because they are not happy with the court judgment,” Mining Minister Richard Musukwa told parliament on Thursday. Last week, a Zambian court ordered a halt to liquidation
Airlines are on course to lose a total $157 billion this year and next, their main global body warned on Tuesday, further downgrading its industry outlook in response to a second wave of coronavirus infections and shutdowns afflicting major markets, Reuters reported. The International Air Transport Association (IATA), which in June had forecast $100 billion in losses for the two-year period, said it now projects a $118.5 billion deficit this year alone, and a further $38.7 billion for 2021.