Africa

FCMB Group Plc plans to restructure half of its loans after plunging oil prices, the coronavirus lockdown and a naira devaluation hindered the ability of the Nigerian bank’s clients to repay their debt, Bloomberg News reported. Credit facilities across industries ranging from oil and gas to small- and medium-sized enterprises will be reorganized, the Lagos-based lender said in a presentation on Tuesday. New terms will include a six-to 12-month moratorium on principal debt repayments and an extension on loan maturities of up to two years.

Two South African trade unions are seeking court action to try to block layoffs at the embattled state-owned South African Airways (SAA), court papers seen by Reuters on Friday showed, Reuters reported. SAA entered a form of bankruptcy protection in December and rescue specialists Les Matuson and Siviwe Dongwana proposed severance packages for all of SAA’s roughly 5,000-strong workforce last month after the government said it would not provide any more funds. They gave trade unions until the end of business on Friday to reach an agreement on staff severances.

Zambian inflation accelerated for a 13th straight month in April to the highest rate in almost four years as its currency continued to plummet, Bloomberg News reported. Consumer prices rose 15.7% from a year earlier, compared with 14% in March, the Zambia Statistics Agency said Thursday. That’s the highest rate since September 2016. Prices rose 2.2% in the month. The kwacha has weakened 2.5% against the dollar this month, taking its plunge for the year to 24%, the worst-performing currency in Africa.

Rwanda’s central bank reduced its benchmark interest rate for the first time in about a year and lowered cash reserve requirements for banks to stimulate output amid the Covid-19 shock to the economy, Bloomberg News reported. The National Bank of Rwanda lowered the lending rate to 4.5% from 5%, according to an emailed statement. It was last cut in February 2019 by 50 basis points. Inflation could average 6% this year, slower than 8.2% in the second quarter, central bank Governor John Rwangombwa said in a phone interview after the rate decision.

Kenya’s economy could shrink by as much as 1% should disruptions caused by the coronavirus pandemic last for about three months, according to the World Bank, Bloomberg News reported. That’s even worse than in 2008, when a cocktail of post-election violence that killed more than a thousand people, drought and the global financial crisis curtailed output in East Africa’s biggest economy. Covid-19 has slashed demand for Kenyan agricultural exports, decimated tourism and is expected to squeeze remittance inflows.

South African retailer Edcon will file for bankruptcy protection in the next few days, it said on Wednesday, becoming the country’s first major corporate casualty of the coronavirus pandemic, Reuters reported. Edcon said it had lost 2 billion rand ($108 million) of sales since the virus reached South Africa in early March and the government responded with a nationwide lockdown that forced non-essential shops to close.

African countries may seek to exchange their sovereign debt for new concessional paper to avoid using funds needed to battle the fast-moving coronavirus to pay private creditors, according to a United Nations body, Bloomberg News reported. The African Union, the UN Economic Commission for Africa and a group of finance ministers from the continent are designing a special-purpose vehicle for the swap.

A South African court placed state-owned SA Express under “provisional liquidation” on Tuesday after the airline’s administrators said rescue efforts weren’t likely to succeed, Reuters reported. SA Express, which flies to domestic and regional destinations, entered a form of bankruptcy protection earlier this year after losing a court battle with a contractor, logistics firm Ziegler. It later suspended all operations as the global COVID-19 pandemic caused demand for flights to plunge and governments to impose travel restrictions.

Nigeria’s central bank took 1.47 trillion naira ($3.8 billion) from lenders as additional cash reserves for failing to meet regulatory targets, according to people with knowledge of the matter, Bloomberg News reported. The accounts of almost 30 commercial lenders held with the central bank were debited by the regulator for missing thresholds on cash-reserve and loan-to-deposit ratios, the people said, asking not to be identified because the matter is confidential. The lenders are appealing the move, they said.

South Africa’s government and specialists appointed to try to save the state-owned airline have agreed to extend a deadline for trade unions to agree staff severance terms, a letter from the public enterprises department showed on Saturday, Reuters reported. South African Airways (SAA) entered a form of bankruptcy protection in December and its fortunes deteriorated further when the coronavirus pandemic forced it to suspend all commercial flights.