Africa

Cyril Ramaphosa’s uphill battle to revive Africa’s most industrialised economy has grown steeper after his ruling African National Congress spooked markets with an attack on the independence of the central bank, the Financial Times reported. South Africa’s economy is already skirting with recession and threats to growth are festering problems for the president after the ANC returned to power in elections in May.

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Kenya Airways plans to double its fleet over the next five years, its chairman said on Monday, as the loss-making carrier combats regional rivals like Ethiopian. The Kenyan airline, which is 48.9% government-owned and 7.8% by Air France-KLM, restructured $2 billion of debt in 2017 and is opening new routes as it seeks to return to profit, Reuters reported. It had a fleet of 41 airplanes at the end of last year, comprising a mix of wide and narrow body Boeing planes, compared with Ethiopian which operates more than 100 planes.

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The fingerprints of South Africa’s power utility are all over the economy’s demise. But fixing Eskom Holdings SOC Ltd. is giving President Cyril Ramaphosa a chance to switch course on issues from climate change to growth, Bloomberg News reported. “It’s really important to link Eskom’s restructuring to where we want to be as a country,” said Roger Jardine, the chairman of FirstRand Ltd., Africa’s largest bank by market value.

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Mozambique’s Constitutional Court nullified a government guarantee on a loan linked to the nation’s Eurobonds, potentially undermining a deal reached last week to restructure the debt, Bloomberg News reported. The judgment came three days after bondholders agreed with the government to reorganize $727 million of Eurobonds that Mozambique defaulted on in 2017. While bondholders said the nullification would have no impact on their agreement, lawyers said the decision may invalidate the debt.

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South Africa’s economy has suffered its most severe quarterly slump in a decade, ratcheting up the pressure on President Cyril Ramaphosa to revive the continent’s most industrialised country, the Financial Times reported. Severe power shortages caused by the crisis at Eskom, the struggling state power utility, dragged economic output 3.2 per cent lower in the first quarter on an annualised basis, according to Treasury data released on Tuesday. The bigger-than-expected drop was the largest quarterly fall since the depths of the global financial crisis in 2009.

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Mozambique’s top court has ruled that a government-guaranteed $850 million Eurobond issued by state-run tuna-fishing company Ematum in 2013 was illegal, court documents showed, Reuters reported. Mozambique has been battling to restructure its finances after the emergence in 2016 of about $1.4 billion of undisclosed borrowing that prompted the International Monetary Fund and foreign donors to cut financial support, triggering a currency crisis and a sovereign debt default.

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Billionaire Beny Steinmetz’s mining company sought bankruptcy protection in the U.S., two months after losing a $2 billion arbitration award to Brazilian mining giant Vale SA, Bloomberg News reported. The court filing by BSG Resources Ltd. on Monday could stymie Vale’s effort to enforce the award, which stems from an ill-fated joint venture with BSGR at the Simandou iron ore mine in Guinea. The government stripped their venture of its rights to Simandou following a probe that found licenses were obtained through corruption. BSGR lists its only U.S.

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A court hearing following Zambia’s decision to name a provisional liquidator to run Vedanta Resources’ Konkola Copper Mines (KCM) business was adjourned for a week on Tuesday without tackling Vedanta’s demands to be involved, the company said, Reuters reported. Vedanta Resources, part-owner of the Mumbai-listed Vedanta group of companies, is KCM’s majority shareholder while Zambian state mining company ZCCM-IH holds a stake of about 20%. In a statement, Vedanta said the judge had considered preliminary issues brought by ZCCM and reserved judgment until June 11.

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Zimbabwe’s central bank said it would stop printing money as part of a milestone deal with the IMF, which has agreed to monitor vital currency reforms in the southern African nation, the Financial Times reported. Under the terms of an IMF staff-monitored programme announced on Friday, President Emmerson Mnangagwa’s government will cease borrowing from the central bank to pay its bills, a practice that has exacerbated Zimbabwe’s debilitating currency crisis.

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The Bank of Ghana revoked the licenses of 347 insolvent micro-finance firms after the conclusion of a cleanup of the banking sector. It cancelled the permits of 192 firms currently in operation in addition to 155 that have ceased operations, the Accra-based regulator said in emailed statement, Bloomberg News reported. The regulator also annulled the licenses of 39 insolvent micro-credit companies, it said in a separate statement.

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