Africa

South Africa is offering a total of 13 billion rand ($710 million) in tax incentives to businesses and individuals to encourage investment in renewable energy projects and offset the impact of higher fuel and food prices, Bloomberg News reported. Africa’s most industrialized economy is experiencing its worst bout of power rationing yet, with outages occurring for more than 200 days in 2022 and every day this year, because the state power utility can’t meet demand from its old and poorly maintained plants.

A shuttered South African airline sued Boeing Co. for fraud over its agreement to buy eight 737 MAX planes and seeks damages of at least $83 million, Reuters reported. Boeing "placed profits over safety and led with a plan of deception," Comair's suit filed Monday in U.S. District Court in Seattle said. Boeing declined to comment. Comair said that Boeing committed fraud over its failure to disclose problems with a key flight control system tied to two fatal 737 MAX crashes in 2018 and 2019 in Indonesia and Ethiopia that killed 346 people and led to the MAX's 20-month grounding.

Ghana plans to convert an estimated 40 billion cedis ($3.3 billion) of loans owed to its central bank into bonds, making it the single biggest holder of domestic government securities and exposing it to an ongoing debt restructuring, Bloomberg News reported. The bonds, due to be issued by the finance ministry, will also cover interest owed to the Bank of Ghana, said the people, who asked not to be named because they’re not authorized to speak publicly on the matter.

Zimbabwe's central bank has cut its policy rate by 50 percentage points to 150%, it said in a statement on Thursday, driven by a downward trend in inflation since late last year, Reuters reported. Monthly inflation fell to 1.1% in January from 2.4% in December, while yearly inflation dipped to 229.8% from 243.8%. "The moderation in interest rates is important and necessitated by the downward trend in the month-on-month inflation since the last quarter of 2022," said the bank, adding it expects the trend to continue into 2023.

Kenya's central bank held its benchmark lending rate steady at 8.75% on Monday, its monetary policy committee said, saying its last hike in November was still working its way through the economy, Reuters reported. Six out of nine market participants polled by Reuters had predicted the bank would hold the rate steady, while three expected it would be raised. The move bucks the trend among major African central banks who have maintained a tightening stance into this year. Policymakers in Nigeria and South Africa hiked rates last week, while their Ghanaian counterparts hiked earlier on Monday.

Nigeria’s sovereign-risk premium jumped the most in three months on Monday after Moody’s Investors Service downgraded the country deeper into junk, Bloomberg News reported. The extra yield investors demand to own the West African country’s dollar debt rather than Treasuries widened 49 basis points to 780, according to JPMorgan Chase & Co. data. The rate on the nation’s 2032 bonds jumped 56 basis points to 12%, also the most since October. Forward contracts on the currency traded 28% weaker than the official rate on the one-year tenor.

Nigeria's central bank on Tuesday raised its benchmark lending rate by 100 basis points to 17.5%, as monetary authorities seek to rein in inflation without choking off lending to the private sector, Reuters reported. Nigerians will head to the polls on Feb. 25 to choose a successor to President Muhammadu Buhari and the state of the economy is a major issue for voters grappling with double-digit inflation. The central bank's decision came after inflation dipped for the first time in 11 months in December to 21.34%, compared with 21.47% in November.

Zambia's official sector creditors met on Thursday to discuss the type of debt relief to offer the country, Finance Minister Situmbeko Musoktwane told Reuters. Zambia became the first African sovereign default in the COVID-19 era in late 2020 and has been struggling to restructure debt that reached 133% of GDP at the end of 2021, which analysts have blamed partly on the high number and diversity of creditors.

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.