Africa

Nigeria has asked the World Bank and African Development Bank for $3.5bn in emergency loans to fill a growing gap in its budget in the latest sign of the economic damage being wrought on oil-rich nations by tumbling crude prices, the Financial Times reported. The request from the eight-month-old government of President Muhammadu Buhari is intended to help fund a $15bn state deficit, which has been deepened by a hefty increase in public spending as the west African country attempts to stimulate a slowing economy.
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Pravin Gordhan, South Africa’s third finance minister in less than a week, insisted on Monday that the government was committed to fiscal discipline as he sought to reassure investors following days of extraordinary turmoil that wiped billions of dollars from the value of the nation’s equity and bond markets, the Financial Times reported.
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Mineral-rich Zambia has announced a program of austerity measures to try to close a gaping budget deficit and restore confidence in southern Africa’s third-largest economy amid a global commodity bust and crippling power blackouts, The Wall Street Journal reported. The proposed measures, which include scrapping subsidies on gasoline and diesel, will save the state $300 million, the Zambian presidency said Friday.
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Rock stars helped convince the international community to write off more than $100 billion of African government borrowings a decade ago. Now the big debts are back, and it’s getting tougher for countries to pay them off, The Wall Street Journal reported. Mozambique was one of the biggest beneficiaries of debt forgiveness, with its debt slashed from 86% of gross domestic product in 2005 to 9% the next year. The country has built it back up since then to 61% of GDP. Ghana’s debt was 82% of GDP in 2005 just before the international community forgave about half of it.
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The oil boom that turned this Atlantic coast city into the world’s most expensive for foreigners has gone bust, threatening President José Eduardo dos Santos’s long grip on power in Africa’s second-biggest crude producer, The Wall Street Journal reported. Property prices have plummeted by half and Western oil companies are laying off thousands; U.S. dollars and steady work have become scarce. Angola’s troubles threaten to reverberate as far away as Beijing, the regime’s sponsor and top crude customer.
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The receiver for Kenya's privately owned Imperial Bank (IBL) found substantial fraud but the bank is still viable and shareholders are considering a proposal to inject capital, the central bank said on Tuesday. Imperial Bank was put into receivership this month after the board alerted the central bank to malpractices at the mid-sized lender, rattling the financial community.
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South Africa's Evraz Highveld Steel and Vanadium will defend its business rescue proceedings in court against British parent Evraz , the company said in a statement on Friday. The South African steelmaker, seeking protection from creditors after heavy losses due to cheap imports from China, said East Metals AG and Mastercroft S.A.R.L had instituted court proceedings to have a vote by creditors earlier this month declared invalid. Both are subsidiaries of the London-listed parent company, which acquired the South African steelmaker in 2008.
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Kenya's central bank on Wednesday said it was ready to provide "adequate liquidity" to the country's banking system after a mid-sized lender was put into receivership a day earlier and hit banking shares on the stock market, Reuters reported. A government agency took control of privately-held Imperial Bank on Tuesday after the central bank said it had become aware of "unsafe or unsound business conditions". Another smaller bank was put in receivership in August after liquidity problems.
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Credit Suisse Group AG Chief Executive Tidjane Thiam says it is “madness” for African nations to rely on loans in foreign currencies to fund vital infrastructure including roads, power and clean water, The Wall Street Journal reported. Lenders in African nations must instead find domestic savings to invest in local projects, said the Ivory Coast-born banker who took charge of Zurich-based Credit Suisse in June. Mr.
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As if being kicked out of one of the world’s biggest emerging-market bond indexes isn’t enough, Nigeria now faces the risk of its credit rating falling further into junk, Bloomberg News reported today. Standard & Poor’s, which rates Africa’s largest oil producer four levels below investment grade at B+ with a stable outlook, releases a review of its assessment on Sept. 18. A week later, it’s the turn of Fitch Ratings, which has Nigeria at BB-, one level above S&P, with a negative outlook.
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