Editor’s Note: May 10, 2019
A day in the life of Africa’s debt crisis
The International Monetary Fund has agreed a three-year loan programme with the Republic of Congo, subject to government reforms and board approval.
“Congo’s case is solid,” the lender said following a meeting with the government. It’s a moment the country has been waiting for since at least 2017, when negotiations started. It follows efforts to reduce its debt burden and an agreement to restructure its estimated $2bn debt to China.
Less ‘solid’ is Zambia’s case for an IMF bailout, also in the works since 2017. Africa’s second-biggest copper producer – one of 16 countries on the continent considered to be at moderate or high risk of debt distress by the IMF – piled on another $2.6bn in external loans last year.
Meanwhile Kenya – which had its debt distress risk upgraded from low to moderate in October – has started a roadshow for its latest Eurobond sale. The country plans to issue at least $2.5bn worth this year, in part to pay off maturing Eurobonds issued in 2014.
All of this is news from the last 24 hours. Similar, and worse, debt scenarios are unfolding across Africa – from minnows like Congo to Nigeria, its biggest economy.
There has been much talk of a potential debt crisis on the continent over the last year.
It’s already started.
From The Continent
South Africa’s ruling African National Congress has secured 57% of votes in its May 8 general election, with around 72% of ballots counted. While the victory is expected, it is the first time the party has won less than 60% of the vote since South Africa’s first free election in 1994. More: France 24
Togo has approved a constitutional change paving the way for president Faure Gnassingbé - in power since 2005 - to potentially extend his term until 2030. This comes despite widespread public opposition to the move and mounting frustration with Gnassingbé’s government, whose family has ruled the West African country for decades. More: Al Jazeera
The Daily Stat
The amount by which shares in e-commerce startup Jumia fell on Thursday, following claims that the company is a “fraud” by short seller Citron Research. More: MarketWatch
The Global Perspective
Libya's UN-backed government has asked 40 foreign companies active in the country to renew their operating licences, or face suspension. The move is seen as a bid to pressure Europe to stop an ongoing military offensive on the capital Tripoli by the rival Libya National Army, led by military commander Khalifa Haftar. More: Reuters
US private equity firm TPG has agreed to manage collapsed Dubai-based Abraaj’s $1bn Growth Markets Health Fund. Abraaj was one of the biggest private equity investors in Africa until its demise last year following allegations of misusing investor funds. More: Reuters