The Editorial Team |

Powell Warns of Broad Virus Danger, Bats Down Negative Rates

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…

Kenya—a Two-Fold Approach to Covid-19: Tax Insight

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NAIROBI (Capital Markets in Africa) — Following presidential directives to the National Treasury to put in place various tax and fiscal measures to cushion Kenya’s economy from the adverse effects of the Covid-19 pandemic, the Tax Laws Amendment Act 2020 (TLAA) was assented to by the President of Kenya on April 25, 2020. Kenya has adopted a two-fold approach, not only introducing relief measures but also measures to maintain tax revenue. This Insight will analyze…

Citigroup Turns to Mediating Cheap Loans as African Deals Dry Up

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LAGOS (Capital Markets in Africa) — Citigroup Inc. is stepping up its role as a mediator between borrowers in sub-Saharan Africa and institutions such as the World Bank and International Monetary Fund to provide access to cheaper financing in markets hit by the coronavirus pandemic. The importance of multilateral lenders, including others like the African Development Bank and Overseas Private Investment Corp., is growing as lockdowns to contain the spread of Covid-19 slow economic growth,…

Zambia’s Debt Burden Hinders Access to IMF Coronavirus Funds

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LUSAKA (Capital Markets in Africa) — Zambia’s request for emergency coronavirus funding from the International Monetary Fund may be scuppered because of the southern African nation’s growing debt burden. The Washington-based lender last year cautioned that the nation’s borrowing was on an unsustainable path. And now, even as the fund makes as much as $100 billion available to member countries, the IMF warned it won’t lend money to governments if it’s not sure it will…

France Stands by Valuation of African Euro-Pegged Currencies

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ABIDJAN (Capital Markets in Africa) — France will continue to guarantee the euro peg of the west and central Africa’s common currencies and sees no need to devalue the units. The coronavirus outbreak has limited inflows of hard currency to the monetary blocs of mostly former French colonies that are struggling with the collapse of oil prices, lower trade, and the flight of investors to safe havens. “We do not see a need for adjusting…

What African Central Banks May Do Next in Response to Virus

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LAGOS (Capital Markets in Africa) — After emergency meetings and aggressive interest-rate cuts to buffer their economies against the impact of the coronavirus pandemic, some central bankers in sub-Saharan African economies may follow a more measured approach when they sit down for their deliberations in the next two weeks. While monetary policy committees in South Africa and Kenya will probably take advantage of scope to lower rates even further, those in Nigeria and Zambia may…

World’s Biggest Wealth Fund Dumps $3 Billion in Fossil Fuels (1)

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LONDON (Capital Markets in Africa) — Norway’s $1 trillion wealth fund is doubling down on its climate action by making deeper cuts to its fossil fuel exposure. The exclusions span some of the world’s biggest coal miners and make use of climate rules for the first time to exit oil-sands firms. Glencore Plc and Anglo American Plc, utility RWE AG and Canadian oil producer Suncor Energy Inc. are among those hit by withdrawals that amount to about $3.3 billion based on Bloomberg…

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