Africa

Kenya is seeking $500 million in funds to help cushion the economy after the global economic crisis cut exports and foreign investment, Prime Minister Raila Odinga said. The funds are over and above the $200 million loan that Kenya has obtained from the International Monetary Fund, Odinga said in an interview in Cape Town yesterday, where he was attending the World Economic Forum on Africa. The global recession has curbed Kenya’s foreign currency earnings as exports fell and remittances from Kenyans living abroad declined.
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The South African unit of General Motors would not be affected by its parent's bankruptcy filing, a senior official at General Motors South Africa said on Monday, Reuters reported. General Motors Corp filed for bankruptcy on Monday, forcing the 100-year-old automaker once seen as a symbol of American economic might and dynamism into a new and uncertain era of government ownership. Read more.
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Years after graduating from dependence on the International Monetary Fund, many African countries are having to call upon the fund for assistance to cope with a global economic crisis that is not their fault, Reuters reported. The international economic turmoil has been slower to reach Africa because of its limited financial links to the outside world. But now, African economies are struggling against collapsing demand for their products, volatile commodity prices and falling foreign investment.
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The South African economy has gone into recession after official figures showed that it contracted an annualised 6.4% in the first three months of 2009, the BBC reported. Africa's biggest economy shrank 1.8% in the previous three months, compared with the same period a year before. The first-quarter figure was the biggest decline since 1984 and puts South Africa in its first recession since 1992. "It's far worse than we expected," said Elna Moolman, economist at Barnard Jacobs Mellet.
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A High Court judge has allowed financial services provider Asteron Life Ltd to serve a bankruptcy notice on a man in South Africa by email, provided it receives a “read reply,” The National Business Review reported. Asteron, formerly Royal and SunAlliance, had already received judgement against Pieter Anton Franck. Court permission is required to serve bankruptcy papers on a debtor overseas. As Asteron had been frustrated in obtaining an address for service, it asked for permission to serve the overseas notice by email.
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The African Development Bank is seeking to triple its capital base to accommodate surging demand for emergency loans from African states and businesses hit by falling export income and sharp declines in foreign investment and remittances. Donald Kaberuka, the AfDB’s president, will put the plans to the bank’s annual general assembly in Dakar this week in one of the first tests of developed countries’ commitments to financing an economic rescue package for Africa.
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Professional Insurance Corporation Zambia (PICZ) Limited has sued Zambian Airways Limited for US$135,916 (K754 million) debt in unsettled premiums, the Zambia Daily Mail reported. On January 13, 2009, following the airline’s failure to settle the outstanding insurance premiums, the insurance cover was cancelled and Zambian Airways was charged premiums for time on risk amounting to US$135,916. In addition, the Lusaka High Court has ordered an attachment of all identifiable assets belonging to Zambian Airways, which has now been placed under receivership by its lenders.
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The current global financial crisis is different from all the others since the end of the second world war, George Soros argued in a Financial Times editorial. Among other measures, both Europe and the US in effect guaranteed that no other important financial institution would be allowed to fail. This necessary step had unintended adverse consequences: many other countries, from eastern Europe to Latin America, Africa and south-east Asia, could not offer similar guarantees. As a result, capital fled from the periphery to the centre.
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Nairobi sweets manufacturer Swan Industries has been placed under receivership by Investment and Mortgage Bank (I&M Bank) in a move that threatens to render more than 100 people jobless, Business Daily reported. The Kisumu-based company has been unable to pay a loan, which the bank refused to disclose on confidentiality grounds, on reduced sales in western Kenya and cutthroat competition from low-cost producers based in Nairobi. The bank appointed Mr Vipul Shah and Mr Dipesh Shah of Nairobi-based VSC Consultants as joint receiver managers.
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Barclays Bank has appointed Law of Property Act receivers on five assets owned by Altrincham-based development and investment firm Property Route Ltd, Crain’s Manchester Business reported. The bank has called in charges over five of the company's properties and has appointed the Leeds office of Eddisons as LPA receiver on each. The properties in question are 23 Denison Road and 7 Conningham Road in Victoria Park, Manchester; 35 Canal Bank in Monton, Salford; 108 Ayres Road in Old Trafford and 105 Wilmslow Road in Handforth, Cheshire.
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