Africa

Even as Ghana takes its third big step to extricate itself from debt distress, bond investors face a new complication: political uncertainty, according to a Bloomberg News commentary. The West African nation’s government reiterated it has sought relief from bilateral lenders including the Paris Club and China under the Group-of-20 Common Framework. The move follows an offer to local-currency bondholders for a debt swap with coupon reductions and a unilateral move to suspend payments on external debt.

South African President Cyril Ramaphosa played down suggestions that an amendment to the central bank’s mandate is imminent, while confirming that a possible change remains under discussion, Bloomberg News reported. Any change to the mandate of the South African Reserve Bank, which focuses on curbing inflation, will take time, Ramaphosa, told reporters in Johannesburg on Monday. Last week Gwede Mantashe, the chairman of the ruling African National Congress, said the party had agreed at its national conference to change the mandate, prompting a decline in the value of the rand.

Ghana was cut to default by S&P Global Ratings after the government suspended debt payments, a move that complicates the planned debt restructuring meant to unlock a bailout by the International Monetary Fund, Bloomberg News reported. The West African nation, which has $13 billion of foreign bonds, was downgraded to selective default from CC due to the moratorium on debt payments, the credit assessor said in a Tuesday statement.

The Central African Republic, which adopted bitcoin as legal tender in April, said on Monday it had delayed listing its national cryptocurrency token, citing "current market conditions" and "marketing reasons," Reuters reported. A plan to list the Sango Coin on as-yet unspecified crypto exchanges has been shelved until the first quarter, according to a statement posted in the coin's official Telegram channel. Also delayed is a "release" that would allow coin holders to sell up to 5% of their coins, which are currently "locked" for a year and unable to be sold.

Ghana on Monday suspended payments on most of its external debt, effectively defaulting as the country struggles to plug its cavernous balance of payments deficit, Reuters reported. Its finance ministry said it will not service debts including its Eurobonds, commercial loans and most bilateral loans, calling the decision an "interim emergency measure", while some bondholders criticised a lack of clarity in the decision. The government "stands ready to engage in discussions with all of its external creditors to make Ghana's debt sustainable", the finance ministry said.

The International Monetary Fund has urged default-stricken Zambia to strike a debt restructuring deal with its international creditors as soon as possible and will make a formal assessment of its predicament in spring next year, Reuters reported.

Experts on Wednesday raised concerns over a new policy announced by the Central Bank of Nigeria that heavily limits withdrawals of money in a push for a cashless economy, the Associated Press reported. The monetary policy, which applies to ATMs, banks and cash back from purchases, follows the launch of the West African nation’s newly designed currency notes to control the money supply. The central bank limited weekly over-the-counter cash withdrawals to 100,000 naira ($225) for individuals and 500,000 naira ($1,124) for corporations, with a processing fee required to access more.

Ghana will launch a domestic debt exchange on Monday, its Finance Minister Ken Ofori-Atta said, expressing confidence that the move would help restore macroeconomic stability and end the West African country's worst economic crisis in a generation, Reuters reported. Ofori-Atta said in a video address on Sunday that Ghana's government had finished its debt sustainability analysis, but he did not provide any information on plans for foreign debt that are anxiously awaited by international creditors.

South Africa's unreliable power supply and its high level of government debt are two of the main risks to its financial stability, the country's central bank said on Tuesday, Reuters reported. Africa's most developed economy has seen 170 days of rolling blackouts this year due to a maintenance backlog of state utility Eskom's ageing coal-fired power plants. This has not only hit corporate productivity but also hurt investor sentiment, the South African Reserve Bank (SARB) said in its biannual health check of the financial system.

Ghana will ask holders of its international bonds to accept losses of as much as 30% on the principal and forgo some interest payments as it hammers out a debt-sustainability plan to qualify for a loan from the International Monetary Fund, Bloomberg News reported. The West African country will also ask holders of domestic bonds to forfeit some interest payments, Deputy Minister of Finance John Kumah told Accra-based Joy FM radio. He confirmed the planned restructuring in an interview with Bloomberg. “These are proposals,” Kumah said by phone on Thursday.