Africa

The African Union, whose members face economic disaster from coronavirus pandemic, may seek international support for a plan financed by rich nations to let countries on the continent postpone bond payments, Bloomberg News reported. The International Monetary Fund and some members of the Group of 20 leading economies have been supportive of the idea, according to, Ngozi Okonjo-Iweala, one of the AU’s special envoys to mobilize international support for the continent’s response to the pandemic.

South African Airways (SAA) faces a wind-down or liquidation after specialists appointed to try to save the state-owned airline said on Thursday they had run out of funds, Reuters reported. SAA has been fighting for its survival since it entered a form of bankruptcy protection in December. Its fortunes deteriorated further when the coronavirus pandemic forced it to suspend all commercial flights. It has already offered severance packages to its workforce of roughly 5,000 people after the government said it would not provide more funds for rescue efforts.

South Africa’s government has been urged to rescue its state-owned agricultural bank to avoid the risk of farmers being starved of access to financing and threatening food security, Bloomberg News reported. Failure by the Land and Agricultural Development Bank of South Africa to lend to farmers and agri-processing businesses would have a “massive impact” on local food supplies, said Omri Van Zyl, the executive director for AgriSA, the nation’s largest farmers group. The Land Bank is seeking waivers from its lenders after missing a loan repayment, triggering a default event.

South Africa is considering bailing out yet another state-owned company, at a time when it needs all the money it can get to revive an economy felled by the coronavirus pandemic, Bloomberg News reported. The National Treasury said Tuesday it’s mulling more aid for the nation’s largest agricultural lender, the Land and Agricultural Development Bank, in the form of a recapitalization and more guarantees on its debt. Last week, the state-owned national airline failed to convince the government it needs extra financial aid, although talks on alternatives for South African Airways continue.

The South African government will work with unions to ensure that a new financially viable and competitive airline emerges from South African Airways (SAA) business rescue process, the Public Enterprises Ministry said on Tuesday, Reuters reported. The airline entered a form of bankruptcy protection in December, since then it has had to suspend all commercial passenger flights due to the global coronavirus pandemic.

South African Airways (SAA) is offering severance packages to its entire workforce of around 5,000 workers, a proposal by the airline’s administrators showed, after the government said it wouldn’t provide more funds for rescue efforts, Reuters reported. The proposal, which was put to trade unions this week and hasn’t been agreed with them, is the latest sign that state-owned SAA is on the brink of collapse. Talks with unions will resume on Monday.

France expects Group of 20 nations will agree to a debt moratorium for African nations in a conference call later Wednesday, an official at the Elysee Palace said. President Emmanuel Macron has been pushing for debt relief to support African nations caught up in the Covid-19 pandemic and on Monday called for a massive cancellation of the continent’s sovereign debt, Bloomberg News reported. A moratorium would allow African countries “to take a breath and not pay interest,” Macron told Radio France Internationale in an interview released Wednesday.

Zambia’s only option is to seek a bailout from the International Monetary Fund as years of excessive borrowing coupled with the impact of the coronavirus pandemic have left it struggling to pay its debts, the main opposition leader said, Bloomberg News reported. The southern African nation’s Eurobonds have been among the world’s worst performing this year and its currency has depreciated by 23% against the dollar as the global outbreak of the virus halts supply chains, forcing down the price of copper that accounts for most of Zambia’s exports.

South African Airways has been denied any further funding by its government owner as the national carrier looks for ways to recover from the coronavirus crisis and a local form of bankruptcy protection, Bloomberg News reported. The airline’s administrators, who were put in charge in December, were told by the state to instead source cash from available resources, according to a letter they sent to affected parties and to Bloomberg News dated April 14.

Tidjane Thiam, former chief executive of Credit Suisse, is among several prominent Africans pressing for a two-year moratorium on $115bn of sovereign African debt owned by the private sector in what, under normal circumstances, would be considered a default, the Financial Times reported. In a letter seen by the Financial Times, several senior African figures said that the private sector should join a planned moratorium on bilateral and multilateral debt to give African governments the fiscal space to fight the coronavirus pandemic.