Africa

With an external debt burden approaching $50 billion, a plea from Angola to reschedule its repayments is a stark reminder that some African economies were in deep trouble even before the coronavirus outbreak, Bloomberg News reported. Details are sparse. President Joao Lourenco said on May 30 sub-Saharan Africa’s fourth-biggest economy had started talks to renegotiate its debt, without specifying which loans or Eurobonds are affected. The finance ministry has since announced plans to “re-profile” borrowings from nations that buy its oil.

South African farmers are increasingly turning to commercial lenders to top up their working capital as the Land and Agricultural Development Bank battles a liquidity crisis, Bloomberg News reported. The Land Bank, which supplies about 30% of loans in the agricultural industry, missed a loan repayment in April that triggered a cross-default provision in some of its bonds. As the state-owned lender works with its funders and National Treasury to restore its financial affairs, farmers are looking elsewhere.

A privately owned power transmission company accused the Zambian government of taking steps to expropriate its assets, as a dispute over supplies to a key mine in Africa’s second-biggest copper producer escalated, Bloomberg News reported. The feud is centered around electricity provision to Konkola Copper Mines, the Vedanta Resources Ltd. unit that the government placed under liquidation a year ago, and which has a $144 million unpaid power bill.

As China tightens its belt economically in response to the coronavirus, African leaders are anxious about the future of infrastructure projects, trade and, in some cases, are requesting debt relief, VOA reported. China is Africa’s largest trading partner with over $200 billion in combined imports and exports annually.

In January 2020, the media reported a court petition by the State Bank of Mauritius (SBM) to liquidate the East African Cables over a $2.85 million (Ksh285 million) debt, Ventures Africa reported. However, the two parties have reached an agreement, recently, on the restructuring of the $2.85 million (Ksh285 million) debt that is due and payable on demand. “The withdrawal of the petition is a significant step towards the company’s turnaround plan that includes strengthening of the balance sheet, operational improvement and having the right funding structure for growth and profitabi

South Africa’s Comair said on Tuesday it was unlikely to restart operations before November, even after the easing of restrictions on air travel, as the airline requires a substantial cash injection, Reuters reported. The company, which operates the local British Airways franchise and budget airline kulula.com, entered bankruptcy protection process last month after a nationwide coronavirus lockdown forced airlines to suspend all commercial flights.

A draft rescue plan for South African Airways (SAA) contains about 4.6 billion rand ($263.4 million) of new bailouts as part of a restructuring aimed at saving the airline from collapse, a copy of the plan showed on Monday, Reuters reported. State-owned SAA entered business rescue - a local form of bankruptcy protection - in December after almost a decade of financial losses, with its fortunes deteriorating when the COVID-19 pandemic forced it to halt all commercial passenger flights in March.

Africa may require at least $100 billion to stabilize countries reeling from the coronavirus outbreak and associated lockdowns, which are pushing economies into recession and heightening the risk of defaults, Bloomberg News reported. The AfDB is expected to play a major role, and the spat could jeopardize a pledge by the lender's 80 shareholders to more than double its capital base to $208 billion. The Abidjan-based bank's debt is rated triple A, a status that may also be at stake.

Angola is in talks with key lenders to reschedule debt payments after a prolonged recession triggered by a drop in crude prices raised concerns about the sustainability of the African nation’s finances, Bloomberg News reported. The discussions have resumed after an interruption of about three months due to the Covid-19 pandemic, President Joao Lourenco said in a speech broadcast on state-controlled RNA Radio on Friday. He didn’t give details about the loans or specify if the talks included Eurobonds.

Kenya’s banks are likely to issue fewer loans this year and boost investments in government debt to safeguard earnings under threat from the fallout of the coronavirus, Bloomberg News reported. That’s the assessment of some analysts after the East African nation’s lenders released first-quarter results that showed lower profit, a surge in loan-loss provisions and a wave of debt restructurings.