Africa

Kenyan banks are expected to hoard cash as they report a jump in first-quarter loan-loss provisions to cope with the aftermath of the coronavirus pandemic, Bloomberg News reported. Kenyan institutions got a cash boost when the central bank lowered reserve requirements to free up funds for lending, while interest rates have been cut to a nine-year low. Banks have now started restructuring debt for customers hard hit by a drop in business activity because of lockdown-measures aimed at slowing the spread of Covid-19.

Zambia’s request for emergency coronavirus funding from the International Monetary Fund may be scuppered because of the southern African nation’s growing debt burden, Bloomberg News reported. The Washington-based lender last year cautioned that the nation’s borrowing was on an unsustainable path. And now, even as the fund makes as much as $100 billion available to member countries, the IMF warned it won’t lend money to governments if it’s not sure it will be repaid.

South Africa’s fastest horses may not be racing, but a branch of the country’s richest family is pumping money into the industry so that when punters are allowed to return to the track, there will be horses to bet on, Bloomberg News reported. Phumelela Gaming & Leisure Ltd., the nation’s biggest horseracing company, will be receiving a 100 million-rand ($5.5 million) lifeline from Mary Oppenheimer Daughters Pty Ltd. after the racetrack owner filed for a local form of bankruptcy protection.

African finance ministers started talks with private creditors to find a way to temporarily suspend debt payments without triggering defaults, Bloomberg News reported. At least a dozen African finance ministers spoke during the hour-and-half virtual meeting with more than 100 creditors on Monday, according to a representative of private creditors who attended the gathering.

South Africa’s Phumelela Gaming and Leisure on Friday joined a slew of distressed firms to file for business rescue - a local form of bankruptcy protection - after a nationwide lockdown suspended activities in the horse racing industry, Reuters reported. Phumelela, of which former Steinhoff International CEO Markus Jooste was a director and among its largest shareholders, has not been able to stage race meetings since the end of March due to the lockdown. This has hurt its revenue from racing and betting, the company said in statement. “...

Measures by some African countries to get money flowing into the real economy aren’t working yet, with banks parking cash in government bonds as the economic slowdown cuts demand for credit, Bloomberg News reported. Lenders have little choice but to invest in government securities as opportunities to deploy unprecedented amounts of liquidity provided by their central banks dry up. Lockdowns aimed at containing the spread of the coronavirus have brought trade to a halt, leaving lenders to focus on helping existing customers with payment holidays or loan restructurings.

Standard Bank Group Ltd. and Absa Group Ltd. are among South African banks holding off on any further layoffs as they prepare to help the shrinking economy survive a potential jobs bloodbath, Bloomberg News reported. Local lenders join global institutions from New York, Paris, London and Frankfurt that have pledged to preserve jobs during the coronavirus pandemic.

South Africa’s Investec Property Fund (IPF) said on Wednesday it expects retailer Edcon’s decision to seek bankruptcy protection to have a limited impact on its business, Reuters reported. Last Wednesday South Africa’s biggest non-food retailer filed for a business rescue - the nation’s bankruptcy protection process - becoming the country’s first major corporate casualty of the coronavirus pandemic.

South Africa does not want a fire sale of the assets of troubled national airline SAA nor for the carrier to be liquidated, Public Enterprises Minister Pravin Gordhan said on Wednesday, Reuters reported. Gordhan told a parliamentary committee that the government was in talks with rescue specialists in charge of state-owned South African Airways (SAA) on how best to save the airline, which entered a form of bankruptcy protection in December.

Comair said on Tuesday that it had entered voluntary business rescue - South Africa’s bankruptcy protection process - after a nationwide lockdown to curb the spread of the coronavirus forced airlines to suspend all commercial flights, Reuters reported. Comair joins state-owned South African Airways, which filed for business rescue in December, as well as state-owned SA Express which was placed under “provisional liquidation” last Tuesday.