Africa

African trade contracted 11.9% in 2020 as the coronavirus pandemic and restrictions to curb its spread pushed the continent into its first recession in a quarter of a century, according to a new report, according to Bloomberg News. “Although the contraction was synchronized across the whole region, the greatest impact was on economies dependent on tourism and commodities,” African Export-Import Bank, the United Nations Economic Commission for Africa and the Making Finance Work for Africa Partnership of the African Development Bank said in the report.
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South African President Cyril Ramaphosa is considering changing the ministries responsible for some of its biggest state-owned companies, including power utility Eskom Holdings SOC Ltd., to better align them with their functions, Bloomberg News reported. Eskom, arms manufacturer Denel SOC Ltd., South African Airways Ltd. and other entities are currently the responsibility of the Department of Public Enterprises, headed by Pravin Gordhan. Eskom may be transfered to the minerals and energy ministry, under Gwede Mantashe, the people said.
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The speed of Djibouti’s economic recovery from a contraction last year hinges on how soon conflict ends in neighboring Ethiopia, Finance Minister Ilyas Dawaleh said, Bloomberg News reported. “The recent and escalating conflict in Ethiopia is worsening prospects for regional peace, trade and undermines regional cooperation,” Dawaleh said in an emailed response to questions on April 10.
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An oil blending and storage company secured deals to supply South Africa’s state power utility with fuel oil worth more than 15 billion rand ($1 billion) at inflated prices by paying inducements, including donations to the ruling party, a forensic investigation has found, Bloomberg News reported. Econ Oil & Energy Ltd. allegedly won the contracts with the help of Thandi Marah, then senior manager of business enablement at Eskom Holdings SOC Ltd., who interfered in the tender processes, said legal firm Bowmans, which Eskom commissioned to conduct the probe.
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Eskom Holdings SOC Ltd. has taken steps to protect its operations from disruptions after a contractual dispute with Oracle Corp.’s South African unit put its technical support services at risk, Bloomberg News reported. The state power utility confirmed on Monday that it’s involved in the disagreement in which Oracle initially claimed Eskom underpaid it by about 7.3 billion rand ($500 million).
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The International Monetary Fund approved a $2.34 billion financing package for Kenya to support the country’s Covid-19 response and address an urgent need to reduce debt vulnerabilities, Bloomberg News reported. Approval of the so-called Extended Credit Facility and Extended Fund Facility will enable immediate disbursement of about $307.5 million for budget support in the East African nation, the Washington-based lender said Saturday in an emailed statement. “Kenya was hit hard at the onset by the Covid-19 pandemic,” the IMF said.
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South Africa’s largest lender to farmers has delayed a debt restructuring deal with creditors because of conditions attached to a government bailout, forcing it to repay what it owes to Standard Chartered Plc, Bloomberg News reported. Land & Agricultural Development Bank said on Wednesday that a March 31 deadline to reach an agreement won’t be met. The government’s 7 billion rand ($474 million) commitment required “a material change” to previous versions of plans to deliver on the lender’s “development and transformation objective,” it said in response to emailed questions.
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Chinese lending to African governments dropped by nearly a third in 2019 -- and probably continued to fall last year -- as a rising threat of defaults stemmed a deluge of credit from the country in the past decade, Bloomberg News reported. A study by Johns Hopkins University’s China-Africa Research Initiative showed that Chinese financing to Africa fell below $9 billion for the first time in nearly a decade in 2019, with Beijing refraining or reducing the size of loans to major borrowers such as Angola and Ethiopia.
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Former Labour Cabinet Secretary Kazungu Kambi has suffered a huge blow after a court declined to rule out a bankruptcy case facing him for failing to pay a Ksh 390 million loan, Kenyans.co.ke reported. Kambi had filed a petition asking for more time to service the loan owed to a local bank arguing that his appointment to the National Lands Commission (NLC) meant that he had a source of income and would afford to clear the debt in monthly installments. Reports indicate that Kambi's net worth is Ksh 50 million.

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Ghana’s planned Eurobond sale will be a key test of appetite for African issuers after a raft of nations sought debt relief, shaking investor confidence, Bloomberg News reported. Strong demand for the sale, which includes Africa’s first zero-coupon dollar bond, would encourage other African countries to tap international capital markets for money needed to roll over debt and finance strained budgets. That would also sidestep the need to seek debt relief and the questions that raises over market access, according to Gemcorp Capital LLP.
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