Africa

Ethiopia's only international government bond slipped in price on Monday after credit ratings agency S&P Global Ratings downgraded it to "Default" after the east African country failed to make a key 'coupon' payment, Reuters reported. The $1 billion bond, which matures in December 2024 with a full principal repayment known as a bullet payment, dipped 0.4 cents on the dollar to 66.5 cents having jumped roughly 10% since the start of the month.

Ethiopia's government told bondholders on Thursday it was hoping to negotiate a rework of its single international bond quickly and was set to include a form of "loss reinstatement" provision for investors, three sources attending the call told Reuters. The global investor call was part of Ethiopia's eleventh hour push to resuscitate an overhaul of its $1 billion Eurobond after disclosing on Dec. 8 that it failed to reach an agreement with a core group of bondholders.

Somalia on Wednesday secured a $4.5 billion debt relief deal from its international creditors, the International Monetary Fund and World Bank said, which will allow the nation to develop economically and take on new projects, the Associated Press reported. The deal comes as part of a debt forgiveness program —called the Heavily Indebted Poor Countries initiative— overseen by both organizations.

Ethiopia looks set to miss an interest payment due later on Monday on its December 2024 dollar bond, becoming the latest emerging-market sovereign to default on debt, Bloomberg News reported. The country’s finance ministry said on Friday, it was “not in a position to pay” the $33 million coupon because of the nation’s “fragile external position.” It added that “restricted discussions” it had held with a group of bondholders had thus far been unsuccessful.

Somalia is expected to get major debt relief this week, slashing its debt-to-GDP ratio to less than 6% in a historic move that would allow it to rejoin the international financial system after roughly 30 years, Reuters reported. The war-scarred East African country is set for the relief under the World Bank and International Monetary Fund's (IMF) Heavily Indebted Poor Countries (HIPC) Initiative. An IMF media advisory on Monday said Somalia was scheduled to reach the "Completion Point" under HIPC on Dec. 13, calling it "a major milestone in its development path".

Pepkor Holdings Ltd., Africa’s largest clothing retailer, is exploring a potential takeover of South African rival Edgars, Bloomberg News reported. The owner of chains including Pep, Ackermans and Tekkie Town is considering paying as much as 2.4 billion rand ($126 million) for the 94-year-old brand, which three years ago was bought out of business rescue by retail holding company Retailability Pty Ltd., the people said. Talks could yet fall apart and another buyer may emerge, they said.

Kenya’s central bank unexpectedly raised its benchmark interest rate for the second time since Governor Kamau Thugge took office in June, citing the need to support the country’s battered shilling, Bloomberg News reported. The monetary policy committee increased the rate by 200 basis points to 12.5%, the largest increase since 2011. The news was announced by Thugge in an emailed statement Tuesday from the capital, Nairobi. Only one of the seven economists surveyed by Bloomberg forecast an increase.

Ethiopia's agreement with its bilateral creditors, other than China, to suspend debt payments until 2025 could be voided if the country does not secure an International Monetary Fund (IMF) loan by March 31, 2024, the Paris Club of developed creditor nations said, Reuters reported. The debt service standstill for 2023 and 2024, which the central bank governor says will save the country $1.5 billion, applies to loans agreed before Nov. 10.

Late Bosasa chief executive Gavin Watson’s nephew has reported the master’s office in Johannesburg to the Special Investigating Unit (SIU) over unlawful approval of Bosasa liquidation, the Sunday Tribune South Africa reported. Jared Watson said that this was because the office wanted to sell the assets cheaply.

The German government pledged Monday to invest 4 billion euros ($4.37 billion) in African green energy projects until 2030, with Chancellor Olaf Scholz saying that countries in Africa should benefit more from their wealth of raw materials, the Associated Press reported. Scholz discussed the pledge at a news conference on the G20 Compact with Africa summit taking place in Berlin. He did not mention any specific projects but said the materials used in green energy should be processed in the African nations they come from. “This creates jobs and prosperity in these countries,” Scholz said.