Some of the world’s largest developing economies are set to face a fiscal crisis in the coming years unless they can roll back huge increases in public spending enacted in response to the Covid-19 pandemic, analysts have warned, the Financial Times reported. The economic downturn caused by the pandemic, combined with rising healthcare spending to tackle the spread of the virus, have caused budget deficits to soar in many countries. They will have to face the choice of risking public unrest by cutting back on spending, or negotiating with investors to restructure their debts.
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Nigerian banks are restructuring 41% of loans in the country after the central bank placed a moratorium on interest charges and principal debt repayments to cushion the blow of lower oil prices and fallout from the coronavirus, Bloomberg News reported. Loans worth 7.8 trillion naira ($20 billion) to 35,640 customers are being reorganized out of 18.9 trillion naira in credit across the industry, Central Bank of Nigeria Governor Godwin Emefiele said on Monday. Twenty-two of the nation’s lenders are involved in the transactions, he said.
The Group of 20 leading economies this weekend may have to consider expanding help for the world’s poorest countries, three months after agreeing to provide temporary debt relief, as the coronavirus pandemic continues to ravage nations, Bloomberg News reported. Central bankers and finance ministers from the G-20 will hold a virtual meeting on Saturday to discuss and coordinate phased efforts to spur a global economic recovery. Looking beyond just debt relief efforts would be part of that.
South Africa’s government has committed to secure funds for the overhaul of struggling state-owned South African Airways (SAA), the public enterprises and finance ministries said in a letter to the airline’s administrators seen by Reuters, Reuters reported. The administrators, who took over SAA in December after almost a decade of financial losses, said they needed a letter of support from the government with a funding commitment for their restructuring plan to work.
South Africa’s latest ban on alcohol sales is likely to force 35,000 bar owners in the poorest communities into bankruptcy, according to industry bodies representing the country’s biggest drink makers, Bloomberg News reported. The decision to abruptly prohibit the retail of booze for a second time since March is aimed at reducing alcohol-related hospital admissions while surging coronavirus cases put a strain on emergency wards.
South African banks are looking at options ranging from debt consolidation to new ways of leveraging equity to avoid defaults when coronavirus-related debt relief measures end, industry officials said, Reuters reported. The banks gave customers in good standing relief on loans during the pandemic, including payment holidays of up to three months. But some consumers are still in trouble. Some banks have offered extensions, while others like Capitec offered to refund interest accumulated during payment holidays.
The International Chamber of Commerce, a global trade union and civil society groups urged the Group of 20 major economies to extend and expand a freeze in debt service payments to help not just the poorest, but also middle-income countries, weather the coronavirus pandemic and its economic fallout, the International New York Times reported on a Reuters story. The ICC, International Trade Union Confederation, and Global Citizen, a group pushing to end extreme poverty by 2030, also called on G20 finance ministers, who will meet online on July 18, to take additional steps to boost th
The South African government is “on course” to provide a funding commitment for the restructuring of loss-making South African Airways (SAA), a senior official said on Friday, Reuters reported. The comments by the acting director-general of the Department of Public Enterprises (DPE) will ease concerns at the airline after the finance ministry told lawmakers last week it would not provide any new money.
A South African court today dismissed an appeal by administrators in charge of South African Airways (SAA) against a ruling which prevented them from laying off staff, Reuters reported. The failure of the appeal means the administrators may have to start consultations about layoffs from scratch if employees do not accept severance packages they have been offered. South African labour law stipulates a minimum two-month consultation period for layoffs.
South African Airways cleared another hurdle needed to ensure the state-owned carrier’s survival when most labor groups agreed to sweetened severance packages for retrenched workers, Bloomberg News reported. The National Union of Metalworkers of South Africa and the South African Airways Cabin Crew Association, which were fiercely opposed to plans to cut the workforce to 1,000 staff from about 4,700, agreed to fresh terms including unpaid training courses for some of the staff beyond their departure, the government said in a statement late Tuesday.