Africa

The South African branch of McKinsey & Company, the global consulting firm, was charged in a corruption scandal involving work the company completed advising the country’s state-owned freight rail and port operator. It may be the first time in McKinsey’s 96-year history that the firm has faced criminal charges, the New York Times reported.

The International Monetary Fund confirmed on Sunday that a staff team will visit Ghana this week to continue discussions with the authorities on policies and reforms that could be supported by an IMF lending arrangement, Reuters reported. Ghana turned to the IMF for help in July as its balance-of-payments deteriorated and hundreds took to the streets to protest against economic hardship. An IMF staff team briefly visited the country two weeks later. Reuters' reported last week that an IMF team would visit Ghana this week.

South Africa's central bank delivered another big interest rate hike on Thursday, taking its main lending rate back near pre-COVID levels as it battles to bring inflation back to target, Reuters reported. The South African Reserve Bank (SARB) raised its repurchase rate by 75 basis points (bps) to 6.25%. The rand pared gains against the U.S. dollar after the decision was announced, as some traders had positioned for a larger hike. The SARB has now raised rates for the sixth time in a row, adding a total of 275 bps to the repo rate since its latest tightening cycle began in November 2021.

Zambia's international bondholders have criticised the International Monetary Fund's debt restructuring framework as "arbitrary" and for excluding the country's domestic debt, sources involved in the process have told Reuters. Zambia has been in default for almost two years and an IMF Debt Sustainability Analysis published last week called for its debt-service-to-exports ratio to be cut to a 140% "threshold" from 153% quickly and to 84% by 2027.

Zambia has requested $8.4 billion in debt relief from its foreign creditors over the next three years, including from China, the country’s single largest creditor and the largest lender to the developing world, WSJ Pro Bankruptcy reported. Zambia’s debt restructuring is widely seen as a test of how much debt relief China will be willing to provide to countries that can’t repay what they have borrowed from Beijing, which has shown a reluctance in recent years to write down its bilateral debts, preferring to lend more or reprofile them rather than accept haircuts.

Debt owed to South African towns and cities almost doubled over the past five years, weighing on municipal finances and increasing the risk that the supply of basic services such as water and electricity will be disrupted, Bloomberg News reported. Consumers owed municipalities 255.4 billion rand ($14.8 billion) by the end the financial year through June 30, compared with 232.8 billion a year earlier, according to data the National Treasury published on Friday. Households account for 71% of this.

Zambia's debt restructuring will be a mixture of haircuts to loans' original value and maturity extensions, a senior Zambian finance ministry official said Thursday, after the Fund approved a $1.3 billion program for the southern African country, Reuters reported. Negotiations with creditors to restructure debt that reached $17 billion at the end of 2021 are starting now, Mukuli Chikuba, the Permanent Secretary to the Ministry of Finance, said at a joint Zambian government and IMF news conference in Zambia's capital Lusaka.

Ghana's central bank on Wednesday delivered its biggest rate hike ever, a 300 basis point increase to 22%, at an emergency meeting to address the economy's rapid deterioration amid crippling inflation, Reuters reported. The hike comes just three weeks after it kept its monetary policy rate unchanged at 19% and said it was pausing to observe the impact of a series of record-breaking hikes. It had been due to meet again in late September, but on Monday it said an emergency meeting was needed.

Crypto futures exchange CoinFLEX has filed for restructuring in Seychelles as part of its plan to improve its financial situation, CoinDesk.com reported. It applied to the Seychelles Supreme Court for reorganization and restructuring. CoinFLEX will now seek approval from creditors for its restructuring plans. On Tuesday, CoinFLEX sent an email to its creditors stating the exchange is looking to implement the proposals outlined last month, which include issuing depositors with recovery tokens, equity and locked FLEX coins.

China invited Zambia's private creditors to discuss the nation's debt later this month after official creditors agreed to a restructuring of its debt, Chinese Ambassador to Zambia Du Xiaohui said on Thursday, Reuters reported. Zambia's creditors have pledged to negotiate a restructuring of the country's debts in a move welcomed by International Monetary Fund managing director Kristalina Georgieva as "clearing the way" for a $1.4 billion fund programme.