Africa

The Republic of Congo’s public debt may exceed $12.5 billion, more than a third higher than previous International Monetary Fund estimates, corruption watchdog Global Witness said, Bloomberg News reported. The debt could further complicate Congo’s three-year, $449 million loan program it began with the IMF in July. The Washington-based lender has already postponed its first review of the program while Congo restructures external commercial debt, an IMF spokesman said by email Friday before it had seen the Global Witness report.

Talks to salvage a tentative $1.7 billion debt restructuring between Congo Republic and energy traders Glencore and Trafigura are stuck, sources said, jeopardising an International Monetary Fund bailout for the debt-hobbled nation, Reuters reported. The IMF signed off in July on a $449 million, three-year lending programme to help the central African nation’s ailing economy - but only $45 million has been disbursed with other funds subject to semi-annual reviews.

The head of South Africa’s state power company will this week present a draft plan to change how the utility operates, as local media reported he’s considering unbundling the utility at a slower pace than envisaged by the government, Bloomberg News reported. Stabilizing Eskom SOC Holdings Ltd. is the government’s top priority. The company has more than 450 billion rand ($31 billion) of debt and the cost of servicing those loans is higher than the revenue it’s generating.

South African Airways said “time is of the essence” for the government to provide a pledged cash injection if the loss-making national carrier is to continue flying, Bloomberg News reported. The National Treasury agreed last month to give the airline 2 billion rand ($140 million) as part of the terms of its bankruptcy protection, but has yet to follow through. SAA canceled 38 flights this week to save money and warned that further cuts may be in the offing.

Heavily-indebted South African Airways (SAA) should be retained as a national airline but needs substantial restructuring, a top official in the governing African National Congress (ANC) party said on Wednesday, Reuters reported. SAA is running out of cash after the government failed to provide 2 billion rand ($138 million) of emergency funding it promised when the airline entered a form of bankruptcy protection last month.

Credit Suisse has hit back against Mozambique in a case in Britain’s High Court, arguing a government guarantee for a $622 million loan - part of a $2 billion debt scandal - is valid and that it is entitled to claim damages, Reuters reported. Mozambique sued the investment bank last year, alongside a number of other defendants, in a bid to cancel the guarantee and seek compensation for losses related to the debt saga, which tipped its economy into crisis. Credit Suisse rejected Mozambique’s arguments in its defense papers and submitted a counter claim, dated Jan.

A financial crisis at South African Airways deepened Tuesday as a funding squeeze forced the national carrier to cancel several domestic and international flights. Eight flights between Johannesburg and Cape Town will be cut this week, and 20 between Johannesburg and Durban, the carrier said in an emailed statement. It also canceled 10 flights between Johannesburg and Munich, Bloomberg News reported. The move is “in line with SAA’s usual policy of reviewing flights and consolidating services with low demand,” and is aimed at saving money, the carrier said.

Less than a month into 2020, South African companies have already announced thousands of job cuts. In a country where a third of the labor force is already unemployed, this will put even more strain on demand and economic growth, Bloomberg News reported. Almost 6,000 jobs are at risk as companies including Telkom SA SOC Ltd., the country’s largest fixed-line operator, and Walmart Inc.’s local unit Massmart Holdings Ltd. plan to reduce their headcount after slumps in earnings. That’s after Sibanye Gold Ltd.

The cost of Ghana’s financial sector cleanup risks escalating to 20 billion cedis ($3.5 billion) as the government weighs increasing the guaranteed payback for some depositors, Finance Minister Ken Ofori-Atta said. The West African nation has approved funding of about 16.4 billion cedis since 2017 to help recapitalize the industry and safeguard depositors’ funds after the central bank revoked the licenses of nine insolvent lenders and 23 second-tier institutions, Bloomberg News reported.

South Africa’s Public Enterprises Ministry said on Sunday it was talking with the Treasury to raise funds to rescue South African Airways (SAA), following a meeting with business rescue specialists at the weekend, Reuters reported. The airline is one of several state entities, including power company Eskom, struggling with debt after nearly a decade of mismanagement. Their woes are seen as the single greatest threat to Africa’s most industrialised economy and have been largely responsible for bringing South Africa’s credit rating to the brink of junk.