The Editorial Team |

Moody’s Sees Risk of S. Africa’s Debt Rising to More Than 100%

JOHANNESBURG (Capital Markets in Africa) — South African government debt could rise by 40 percentage points over the next three years as strong, widespread fiscal pressures and persistently low economic growth weigh on the nation’s credit profile, according to Moody’s Investors Service. That would push government debt as a percentage of the gross domestic product well over 100% and much higher than the 87.4% peak the Treasury projects for 2023-24 under its active management scenario….

Nigeria Misses Revenue Target on Low Oil Prices and Output

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LAGOS (Capital Markets in Africa) — Nigeria could only collect about half of its budgeted revenues in the first five months of this year as low oil prices and output took a toll on government income. Total earnings by the government from January to May were 1.48 trillion naira ($3.8 billion), which was 56% of targeted revenue for the period, Finance Minister Zainab Ahmed said during a presentation to lawmakers on Thursday. Earnings from crude…

Another Donald Trump Foreign Policy Foray Goes Awry

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LAGOS (Capital Markets in Africa) — Donald Trump’s biggest foray into African affairs has not turned out well. The U.S. president’s bid to resolve a long-running dispute over a Nile dam has failed to make a breakthrough, joining his unsuccessful efforts in crises from North Korea to Kosovo. In the case of the Nile, he’s largely fallen afoul of the same intractable regional politics that have bedeviled African leaders for years in their own fruitless…

Kenya Plans Foreign Flights from August in Phased Reopening

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NAIROBI (Capital Markets in Africa) — Kenya announced a resumption in international flights from Aug. 1 and lifted a ban on travel into its two biggest cities, saying the East African nation’s counties have reached a “reasonable level of preparedness” to fight the Covid-19 pandemic. Travel into and out of the capital, Nairobi, Mombasa, and Mandera will resume from 4:00 a.m. on Tuesday, President Uhuru Kenyatta said in a televised speech. Domestic air travel will…

Lower Policy Rate Helps Rich, Not Poor, SARB Researchers Say

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SOUTH AFRICA (Capital Markets in Africa) — The South African Reserve Bank is powerless when it comes to alleviating debt-service costs for the poorest 80% of the country’s people, researchers at the Pretoria-based central bank concluded. Reductions in the repurchase rate generally lead to lower borrowing costs for the richest 20%, but they’re negatively correlated with lending rates for the rest, economists Kerschyl Singh and David Fowkes wrote in a research paper published on the…

Time to Get Picky as Emerging-Market Traders Question Rally

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LAGOS (Capital Markets in Africa) — Emerging-market investors are getting selective even after bonds, stocks, and currencies kicked off the second half of the year on a high note. Money managers are questioning whether the developing world’s economic troubles will be short-lived as massive central-bank stimulus bolsters demand for risky assets. Emerging-market dollar bonds posted their longest weekly winning streak since February in the five days through Friday. Stocks and currencies rallied on Monday. Inflation data in at least 10 developing…

World Bank to Seed Ghana’s Development Lender With $250 Million

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ACCRA (Capital Markets in Africa) — The World Bank will provide Ghana with a $250 million credit facility to start its own development bank. The Washington-based lender is finalizing the terms of the funding with the country’s Ministry of Finance, the World Bank’s office in the nation’s capital, Accra, said in an email on Monday. The World Bank’s board may consider the facility before September, it said. Ghana’s government said in October that it plans to raise…

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