Africa

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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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