Africa

The International Monetary Fund on Tuesday said that it was precluded from providing financial support to Zimbabwe due to its "unsustainable debt and external arrears," and any lending arrangement would require a clear path to a comprehensive restructuring of the African country's external debt, Reuters reported. The IMF said that its staff completed a virtual mission to Zimbabwe from Oct. 16 to Nov. 16, and noted "significant" efforts by authorities there to stem inflation, contain budget deficits and reserve money growth.

Kenya’s debt service costs, which are expected to surge by 22% this fiscal year, are set to rise even further as the East African economy’s currency sinks to all-time lows against the dollar, Bloomberg News reported. Kenya’s Treasury expects to spend a record 1.17 trillion shillings ($10.4 billion) in the year through June on loan repayments, equivalent to about two-thirds of its revenue, according to the parliament’s budget office. This will be compounded by a 2.6% depreciation by the Kenyan shilling so far this year, after the currency fell to 112.06 per dollar.

Tanzania’s central bank is targeting lenders’ employees deemed responsible for approving non-performing loans in a bid to crack down on losses and boost credit to the private sector, Bloomberg News reported. An employee who issued loans fraudulently or without following due procedures will face legal action, Bank of Tanzania Governor Florens Luoga said in a statement. The central bank “will blacklist the concerned employees and bar them from being employed in any bank or financial institution operating in Tanzania,” Luoga said.

The International Monetary Fund said on Thursday it was continuing to engage on a technical basis with Ethiopia despite a worsening conflict in the country, but given uncertainty, it has not begun discussions on a potential IMF financing program, Reuters reported. IMF spokesman Gerry Rice told a news briefing that the Fund is watching developments closely in Ethiopia, as well as in Sudan. It is too soon to tell how political developments related to a late October coup will affect Sudan’s request for debt relief and potential IMF disbursements in 2022, Rice said.

Kenya’s shilling depreciated to its weakest level against the dollar on record as increased demand for foreign exchange added pressure on the currency of East Africa’s largest economy, Bloomberg News reported. The shilling weakened as much as 0.3% to 111.63 per dollar before paring the loss to trade at 111.49 by 5:00 p.m. in the capital, Nairobi. The shilling depreciated for a fifth straight month in October, its worst stretch of losses in a year, according to data compiled by Bloomberg.

Zambia hopes to secure a support programme from the International Monetary Fund by the end of the month, the country's Finance Minister Situmbeko Musokotwane said on Tuesday, Reuters reported. "Zambia's debt problem is a huge problem," Musokotwane said during a webinar. "By the end of this month we should reach a staff level agreement with the IMF". Zambia - one of the world's largest copper producers - became Africa's first COVID-era sovereign default last year although the problems had been building for years due to chronic government overborrowing.

Thirteen East African economies are projected to collectively expand by 4.1% in 2021 from 0.4% last year, supported by a global recovery, according to an African Development Bank report, Bloomberg News reported. East Africa is the only region on the continent to have avoided a recession in 2020, thanks to agriculture, sustained public spending on large infrastructure projects, and increased regional economic integration, according to an AfDB report published on Thursday.

Nigeria has launched a digital currency which the Central Bank of Nigeria says is a “major step forward in the evolution of money” in Africa’s most populous country, the Associated Press reported. President Muhammadu Buhari said at the launch Monday that the digital currency and the blockchain technology it uses can foster economic growth and increase the GDP of Nigeria’s economy, one of Africa’s biggest, by $29 billion over the next 10 years.

South Africa’s Eskom Holdings SOC Ltd. resumed cutting power to customers due to breakdowns at some of its electricity-generating plans, Bloomberg News reported. The state-owned company, which is struggling to reduce its debt burden, has been cutting 2,000 megawatts from the grid since Saturday evening after breakdowns and malfunctions at six of its plants. The rolling power cuts, known locally as load-shedding, will be suspended on Monday morning and re-introduced during evenings until Tuesday night after a unit at its Koeberg plant tripped on Sunday, Eskom said in a statement.

Moody’s Investors Service cut Ethiopia’s sovereign credit rating for a second time since May, citing a delay in the nation’s planned debt restructuring and an escalating civil war, Bloomberg News reported. The company lowered the rating one level to Caa2, it said in a statement on Wednesday. Moody’s in March placed the country on review for downgrade, before cutting the rating two months later. The outlook is negative. The yield on Ethiopia $1 billion of Eurobonds climbed five basis points to a record 13.83%.