Africa

South Africa’s minister in charge of embattled state-owned companies gave an impassioned defense of the sale of a majority stake in the national carrier for about $3 — a deal that’s subject to a lawsuit from one of the spurned bidders, Bloomberg News reported. The privatisation of South African Airways (SAA) is a vital reform for the country’s battered economy, Public Enterprises Minister Pravin Gordhan, 73, said in an interview at Bloomberg’s Johannesburg office.

Zambia is cancelling more than $2 billion worth of projects financed by commercial loans to reduce the risk of accumulating more non-concessional debt, the ministry of finance said, Reuters reported. In 2020, Zambia became the first nation to default in the COVID-19 era. At the end of 2021, its external debt stood at $17.27 billion, of which China held $5.78 billion, and it is in negotiations with creditors and the International Monetary Fund (IMF) to lift itself out of this debt hole.

Ghana slashed its plan to borrow as much as $750 million from international banks because of surging borrowing costs, according to a finance ministry official with knowledge of the matter, and will also tap the International Monetary Fund to bolster its finances, Bloomberg News reported. The West African nation will borrow $250 million from banks at an interest rate of about 8.4% to fund budget needs such as roads, railways, energy and health.

Zimbabwe’s central bank raised interest rates to a record and the government officially reintroduced the US dollar as legal currency to rein in surging inflation and stabilize the nation’s tumbling exchange rate, Bloomberg News reported. The monetary policy committee more than doubled the key rate to 200% from 80%, Governor John Mangudya said in a statement on Monday. That brings the cumulative increase this year to 14,000 basis points -- the most globally. “The monetary policy committee expressed great concern on the recent rise in inflation,” Mangudya said.

South Africa’s government and national airline are being sued by a little-known investment firm, which wants the sale of a majority stake in the carrier scrapped and re-run due to a lack of transparency, Bloomberg News reported. This year’s acquisition of 51% of South African Airways by the Takatso Consortium -- made up of a local jet-leasing company and a private-equity firm -- for just $3 was “unlawful and constitutionally invalid,” according to documents filed at the High Court in Cape Town by Toto Investment Holdings Pty Ltd.

In Cameroon, thousands of truckers spend weeks stranded at highways and border crossings due to lack of diesel. In Kenya, drivers are lining up overnight to fill their tanks. In Nigeria, airlines have threatened to ground all domestic flights as they scramble for expensive jet fuel, the Wall Street Journal reported. Across Africa, surging fuel prices are straining businesses from bakeries to airlines and adding pressure on consumers already burdened by spiraling food costs and the economic disruptions caused by the continuing Covid-19 pandemic.

South Africa's economy grew more than expected in the first quarter, recovering to the level it was before the COVID-19 pandemic thanks to a strong performance by sectors like manufacturing, data from the statistics agency showed, Reuters reported. The growth trajectory will offer some comfort to South African President Cyril Ramaphosa, who has been under pressure to lift the growth rate. Gross domestic product grew 1.9% in the first quarter in quarter-on-quarter seasonally adjusted terms and by 3.0% year-on-year unadjusted in the first three months of the year.

Comair Ltd., operator of IAG SA-owned British Airways trips in South Africa, grounded all flights after running out of funds and is awaiting further investment, Bloomberg News reported. The carrier, which also runs the domestic low-cost airline Kulula, halted all ticket sales with immediate effect, according to a statement late Tuesday evening. The company’s administrators “believe the funding may be secured,” Comair said.

China's lack of experience with tricky debt restructurings and slow coordination among its public lenders is holding up debt relief for Zambia, a test case for the top emerging market creditor, Reuters reported. Zambia became in 2020 the first country to default in the COVID-19 pandemic era, struggling under a debt burden worth 120% of GDP. Its external debt topped $17 billion at the end of 2021, of which a third was owed to China, according to Zambian government data.

A digital rand in South Africa could cut the high cost of cross-border payments for banks but its introduction is still a few years away, a senior central bank official said, Reuters reported. However, regulation of crypto assets is in the offing and might come into force within nine to 15 months, South African Reserve Bank (SARB) Deputy Governor Kuben Naidoo told Reuters in an interview. It costs 13% of a transaction to remit money from South Africa to another country, more than double the average of the Group of 20 (G20) leading global economies, according to a 2021 World Bank report.