The Editorial Team |

China May Agree to Delay, Not Forgive, $150 Billion Africa Debt

LAGOS (Capital Markets in Africa) — China, Africa’s largest bilateral creditor, is likely to agree to delay but not forgive its $152 billion of loans, an approach at odds with prior forbearance plans from groups including the Paris Club, according to a top Johns Hopkins University researcher. “The Chinese have always done their lending on the idea that individual projects contribute to structural transformation and economic development,” said Deborah Brautigam, who heads the China Africa Research…

Egypt’s Top Private Bank Stores Cash With Eye on Dividends

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CAIRO (Capital Markets in Africa) — Egypt’s largest private lender is amassing cash so it will be able to consider dividend payouts at the end of the year when it has assessed the impact of the coronavirus pandemic. Commercial International Bank SAE has much more capital and liquidity buffers than required by regulators, giving the bank “an ample amount of firepower in case we want to increase dividends next year or keep them the same,” Chairman Hisham Ezz Al-Arab said…

Boris Johnson Put to the Test as Pandemic Roils U.K.’s Economy

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LONDON (Capital Markets in Africa) — Prime Minister Boris Johnson came up against increasing pressure over his handling of the coronavirus crisis just as the British economy recorded its largest monthly contraction on record. Chancellor of the Exchequer Rishi Sunak warned on Wednesday the U.K. faces a significant recession after gross domestic product fell almost 6% in March. “We’ve got a very sharp move into recession, and it was quite sudden, which is what we’ve all observed from the…

U.S. Likely to Get Sanofi Vaccine First If It Succeeds

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NEW YORK (Capital Markets in Africa) — Americans will likely get Sanofi’s Covid-19 vaccine before the rest of the world if the French pharmaceutical giant can successfully deliver one. That’s because the U.S. was first in line to fund Sanofi’s vaccine research, Chief Executive Officer Paul Hudson said in an interview with Bloomberg News. He warned that Europe risks falling behind unless it steps up efforts to seek protection against a pandemic that’s killed more than 290,000…

Bailey Hints at More BOE Easing to Help Shoulder Virus Costs

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LONDON (Capital Markets in Africa) — Bank of England Governor Andrew Bailey offered another hint that more bond purchases are on the way after figures showed a deep contraction at the end of the first quarter. He said it’s “pretty clear” investors expect more quantitative easing from the bank and that policymakers have kept the option open to do more than the 200 billion pounds ($240 billion) they announced in March. Investors have already stepped…

Why the U.S. Has Shunned Negative Interest Rates: QuickTake

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NEW YORK (Capital Markets in Africa) — Investors have speculated that the U.S. Federal Reserve may push its benchmark overnight interest rate into negative territory to help offset the economic devastation of the coronavirus pandemic. President Donald Trump has said doing so would be a “Gift” to the U.S. economy. Fed officials led by Chairman Jerome Powell have consistently opposed it. What are markets saying? Implied yields on futures contracts linked to the federal funds…

Powell Warns of Broad Virus Danger, Bats Down Negative Rates

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NEW YORK (Capital Markets in Africa) — The U.S. economy faces unprecedented risks from the coronavirus if fiscal and monetary policymakers don’t rise to the challenge, Federal Reserve Chair Jerome Powell said while pushing back against the notion of deploying negative interest rates. “The recovery may take some time to gather momentum, and the passage of time can turn liquidity problems into solvency problems,” Powell said Wednesday in remarks to a virtual event hosted by the Peterson…

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