Africa

Zambia skipped an interest payment on its debt, moving closer to becoming the first African nation to default on dollar bonds since the onset of the coronavirus pandemic, Bloomberg News reported. Holders of Zambia’s $3 billion of Eurobonds will vote next week on the country’s request for a six-month interest-payment holiday. A core group of creditors have already rejected the proposal, prompting Zambia to say it won’t be able to service its commercial debts including the bonds unless it gets the relief.

Rich nations, development banks and private creditors need to ramp up support for poorer countries to prevent humanitarian crises and a “lost decade” of global growth, the prominent G30 group of former policymakers and academics said on Wednesday, Reuters reported. How to support struggling countries is the most pressing issue being discussed during the virtual annual meetings of the International Monetary Fund and World Bank this week amid warnings 150 million people could be pushed into extreme poverty by the end of next year. The G30, which includes former U.S.

Zambia has warned it is ready to become the first African country to default as a result of the coronavirus pandemic if investors in its $3bn worth of US dollar bonds reject a request by the southern African nation to suspend payments, the Financial Times reported. Africa’s second-biggest copper producer, which is attempting to restructure its $12bn of external debt, has become a crucial test of global efforts to help emerging nations find debt relief as the pandemic devastates their economies.

Forecasts for the global economy are “somewhat less dire” as rich nations and China have rebounded quicker than expected from coronavirus lockdowns, but the outlook for many emerging markets has worsened, the International Monetary Fund said on Tuesday, Reuters reported. The IMF forecast a 2020 global contraction of 4.4% in its latest World Economic Outlook, an improvement over a 5.2% contraction predicted in June, when pandemic-related business closures reached their peak.

Global finance leaders on Tuesday said the world economy had escaped a coronavirus-triggered collapse so far, but warned that failure to conquer the pandemic, maintain stimulus and tackle mounting debt among poor nations could crush a fragile recovery, Reuters reported. At the start of the annual meetings of the International Monetary Fund and World Bank, the IMF issued slightly improved growth forecasts spurred by unexpectedly stronger rebounds from coronavirus lockdowns in the wealthiest countries and China.

The international community must do more to tackle the economic fallout of the COVID-19 crisis, the head of the International Monetary Fund said on Monday, publicly calling on the World Bank to accelerate its lending to hard-hit African countries, Reuters reported. Some of the key events of the virtual and elongated annual meetings of the IMF and World Bank take place this week, with the most pressing issue how to support struggling countries. “We are going to continue to push to do even more,” IMF Managing Director Kristalina Georgieva said during an online FT Africa summit.

The Ugandan High Court on Wednesday ruled that a syndicated loan granted to a local company was illegal in a shock judgment that banks warned could lead to a spike in defaults on $1.5 billion of debt, Bloomberg News reported. The case relates to a loan Diamond Trust Bank Kenya Ltd. provided to a Kampala-based firm with interests spanning real estate to agriculture, using its Ugandan subsidiary as the agent.

A consensus is emerging among G20 nations to extend a debt-payment freeze next week for poor countries for an additional six months, a French finance ministry source said on Friday, Reuters reported. Members of the Group of 20 economic powers and the Paris Club of creditor nations agreed in April to suspend until the end of the year debt payments owed to them by poor countries to free up resources for tackling the coronavirus outbreak. G20 finance ministers are due to take a decision on what to do after the end of the year when they hold an online meeting next Wednesday, the source said.

The global economy is in “less dire” shape than it was in June but risks crashing again if governments end fiscal and monetary support too soon, fail to control the coronavirus and ignore emerging market debt problems, International Monetary Fund Managing Director Kristalina Georgieva said on Tuesday, Reuters reported.

South Africa should act to preserve its insolvent national airline and seek to partner the carrier with Ethiopian Airlines Group, according to a study commissioned for ruling-party lawmakers, Bloomberg News reported. The assessment, seen by Bloomberg, was prepared by African Aviation Services Ltd. and dated Oct. 4. It was presented to a group of African National Congress lawmakers on Monday, according to an ANC official who asked not to be identified because the information isn’t public.