Africa

South Africa’s Treasury is likely to announce additional funding for the state arms company and a government-owned agricultural lender in this week’s budget, people familiar with the situation said, Bloomberg News reported. Denel SOC Ltd., which makes attack helicopters and other weapons, will probably receive between 2 billion rand ($123 million) and 3 billion rand, the people said, asking not to be identified because the information hasn’t been made public. The Land and Agricultural Development Bank of South Africa will get 1.5 billion rand to 2 billion rand, the two people said.

In a related story, the Financial Times reported that over the past two decades, China has emerged as the biggest bilateral lender to Africa, transferring nearly $150bn to governments and state-owned companies as it sought to secure commodity supplies and develop its global network of infrastructure projects, the Belt and Road Initiative.

Zambia has three weeks to improve transparency over its debt obligations and make progress toward an IMF-backed reform package, or risk defaulting on its loans, CNBC reported. Last week, a meeting of creditors was adjourned until Nov. 13 after a consortium comprising around 40% of Zambia’s Eurobond holders opted to abstain from voting on the country’s debt relief proposals, rather than voting them down. Experts suggest bondholders are hoping the government can offer more clarity on its debt, particularly to China, and demonstrate progress toward an IMF program ahead of the Nov. 13 meeting.

Ratings agency S&P has slashed Zambia’s credit rating to “selective default” after the government missed an interest payment last week and announced it would suspend debt service to external commercial creditors, Reuters reported. Zambia - one of the world’s top copper producers - was struggling with its ballooning debt before the coronavirus pandemic roiled global markets and looks headed for a messy and protracted default.

Mozambique's Attorney General's Office said on Wednesday it will seek the extradition of three former Credit Suisse bankers implicated in a $2 billion debt scandal that sent the country's economy into crisis, Reuters reported. Andrew Pearse, Detelina Subeva and Surjan Singh, who helped arrange the loans to Mozambique, all pleaded guilty in the United States last year to charges including conspiracy to violate U.S. anti-bribery laws and to commit money laundering and securities fraud in relation to their role in the affair.

Zambia’s government said on Tuesday it had adjourned meetings with creditors on a proposal to defer payments on its Eurobonds to Nov. 13 due to a lack of quorum, pushing the copper producer further towards a protracted debt overhaul, Reuters reported. The meetings had been scheduled for Tuesday morning and were expected to gauge support for a delay in interest payments on $3 billion-worth of three outstanding dollar-denominated bonds until April. Two-thirds of holders of Zambia 2022 and 2024 bonds and three-quarters of its 2027 issue were required to vote.

Zambia looks set to move closer to being Africa’s first sovereign default since the onset of the coronavirus pandemic, with bondholders expected to reject a request to put off payments for six months, Bloomberg News reported. A key vote Tuesday by holders of Zambia’s $3 billion of Eurobonds will also be keenly watched by other poor nations considering how to involve commercial creditors in debt-relief talks.

The clock is ticking for Zambia to convince reluctant bondholders to accept an interest-payment holiday while it works out a debt-restructuring strategy, Bloomberg News reported. If investors refuse Zambia’s request for a six-month standstill in a key vote on Tuesday, it may become the first African nation to default since the onset of the coronavirus. That could set a precedent for how cash-strapped governments treat private and Chinese creditors. The southern African nation isn’t making it any easier for bondholders to give it breathing space.

Some of the world’s top economies could see their credit ratings cut or put on downgrade warnings in the coming months in a second global wave of coronavirus-related revisions, S&P Global’s top sovereign analyst has warned, Reuters reported. S&P’s sovereign group managing director Roberto Sifon-Arevalo told Reuters that the immense costs of supporting health systems, firms and workers through the pandemic was fundamentally altering some countries’ finances for the worse.

The head of the International Monetary Fund on Sunday called for significant steps to address the increasingly unsustainable debt burdens of some countries, urging creditors and debtors to start restructuring processes sooner rather than later, Reuters reported. IMF Managing Director Kristalina Georgieva said a six-month extension of the Group of 20 major economies’ freeze in official bilateral payments would help low-income countries hammered by the COVID-19 pandemic, but more urgent action was needed.