Africa

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Kenya’s shilling depreciated to its weakest level against the dollar on record as increased demand for foreign exchange added pressure on the currency of East Africa’s largest economy, Bloomberg News reported. The shilling weakened as much as 0.3% to 111.63 per dollar before paring the loss to trade at 111.49 by 5:00 p.m. in the capital, Nairobi. The shilling depreciated for a fifth straight month in October, its worst stretch of losses in a year, according to data compiled by Bloomberg.
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Zambia hopes to secure a support programme from the International Monetary Fund by the end of the month, the country's Finance Minister Situmbeko Musokotwane said on Tuesday, Reuters reported. "Zambia's debt problem is a huge problem," Musokotwane said during a webinar. "By the end of this month we should reach a staff level agreement with the IMF". Zambia - one of the world's largest copper producers - became Africa's first COVID-era sovereign default last year although the problems had been building for years due to chronic government overborrowing.
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Thirteen East African economies are projected to collectively expand by 4.1% in 2021 from 0.4% last year, supported by a global recovery, according to an African Development Bank report, Bloomberg News reported. East Africa is the only region on the continent to have avoided a recession in 2020, thanks to agriculture, sustained public spending on large infrastructure projects, and increased regional economic integration, according to an AfDB report published on Thursday.
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Nigeria has launched a digital currency which the Central Bank of Nigeria says is a “major step forward in the evolution of money” in Africa’s most populous country, the Associated Press reported. President Muhammadu Buhari said at the launch Monday that the digital currency and the blockchain technology it uses can foster economic growth and increase the GDP of Nigeria’s economy, one of Africa’s biggest, by $29 billion over the next 10 years.
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South Africa’s Eskom Holdings SOC Ltd. resumed cutting power to customers due to breakdowns at some of its electricity-generating plans, Bloomberg News reported. The state-owned company, which is struggling to reduce its debt burden, has been cutting 2,000 megawatts from the grid since Saturday evening after breakdowns and malfunctions at six of its plants. The rolling power cuts, known locally as load-shedding, will be suspended on Monday morning and re-introduced during evenings until Tuesday night after a unit at its Koeberg plant tripped on Sunday, Eskom said in a statement.
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Moody’s Investors Service cut Ethiopia’s sovereign credit rating for a second time since May, citing a delay in the nation’s planned debt restructuring and an escalating civil war, Bloomberg News reported. The company lowered the rating one level to Caa2, it said in a statement on Wednesday. Moody’s in March placed the country on review for downgrade, before cutting the rating two months later. The outlook is negative. The yield on Ethiopia $1 billion of Eurobonds climbed five basis points to a record 13.83%.
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Credit Suisse Group AG has agreed to pay nearly $475 million to American and British authorities to resolve charges in connection with Mozambican bond offerings, the U.S. Securities and Exchange Commission said on Tuesday, Reuters reported. The charges centered on the Zurich-based bank's role in a $2 billion scandal involving government-guaranteed loans. The SEC said Credit Suisse fraudulently misled investors and violated U.S. bribery laws in a scheme involving two bond offerings and a syndicated loan that raised funds on behalf of state-owned entities in Mozambique.
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Appetite for Tanzania’s sovereign bonds is expected to continue as banks in the East African nation prioritize lending to the government to secure some returns despite the Covid-19 pandemic, Bloomberg News reported. The nation’s last three bond sales were oversubscribed. The latest raised 182.3 billion shillings ($79 million) in 25-year bonds at 15.95%, attracting tenders of more than three times the amount offered, according to a Bank of Tanzania report on Wednesday.
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Sub-Saharan Africa needs significant additional funding to counter damage wrought by the coronavirus pandemic, bolster its economic recovery prospects and mitigate threats posed by climate change, according to the World Bank, Bloomberg News reported. The regional economy is expected to grow 3.3% in 2021, after contracting by an estimated 2% last year, the Washington-based lender said Wednesday in its latest Africa Pulse report. It raised its gross domestic product forecast by one percentage point from its April report, largely due to better-than-expected commodity prices.
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Zambia may owe Chinese creditors almost double the amount the government has previously disclosed, complicating restructuring negotiations, a study found, Bloomberg News reported. The Johns Hopkins’ China Africa Research Initiative estimates the nation’s total liabilities to Chinese lenders at $6.6 billion and spread across at least 18 creditors, according to a report published on Tuesday. That compares with an official figure of $3.4 billion.
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