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Jumia partners UPS to expand distribution network. See what that means for both parties

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International logistics firm, United Parcel Services, UPS, has entered into a partnership with Jumia to access the e-commerce firm’s delivery infrastructure across many African countries.

https://twitter.com/UPS/status/1510980625037205515?s=20&t=LglfUcaJD7mO_1wGEszyNA

Bloomberg reports that the deal will enable the Berlin-based firm (Jumia) to make use of UPS’s network across 220 countries and territories to help users deliver their packages

Jumia’s Senior Vice-President of Logistics, Apoorva Kumar revealed that the partnership would help address one of the biggest challenges that the company faced as a start-up.

“at the beginning of our journey – launch of the e-commerce platform 10 years ago, logistics infrastructure was one of the most challenging aspects of our operating environment. This challenge was a catalyst for us to build an unparalleled logistics platform in Africa offering our sellers and consumers reliable, convenient and cost-effective delivery services.” Kumar said.

He added that “today, we are helping other businesses overcome these infrastructure challenges by giving them access to our logistics platform. We are delighted and humbled by the opportunity to partner up with UPS, a global logistics leader, to offer the last mile solutions in Africa. We view this as a validation of the strength of our logistics platform as well as an incentive to double down on our efforts to further enhance our services and build a world-class logistics business in Africa.”

While the companies didn’t provide financial terms of the deal, Bloomberg says it would help Jumia become a $1.2 billion company from $934.6 million on Friday. UPS shares fell 1.2%.

Gregory Goba Ble, UPS vice president of engineering and operations for Indian subcontinent, Middle East, and Africa said, “UPS’s asset-light approach, like the Jumia partnership, offers a pathway for businesses to quickly and reliably connect to new customers around the world through our global network, potentially accelerating their revenue growth.”

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Ghana seeks to hasten debt restructuring talks

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Barely days after Zambia announced a significant development in resolving its protracted debt restructuring,  Mohammed Amin Adam, Ghana’s Finance Minister, declared on Tuesday that the administration intended to move the debt restructuring talks along quickly.

The West African nation is now in negotiations to restructure bonds worth roughly $13 billion with foreign investors. In December 2022, Ghana defaulted on the majority of its $30 billion in external debt due to escalating debt payments and inflation.

Tradeweb data indicates that the international bonds issued by Ghana experienced the largest increase, with a jump of up to 1.1% on the dollar, to 42.67 cents for the May 2029 maturity.

Ghana, one of the first nations in Africa to default on its foreign debt and a major producer of oil, gold, and cocoa, is experiencing the worst economic collapse in a generation, characterized by double-digit inflation and skyrocketing public debt.

Most indebted African countries have applied for a debt restructuring plan under the G20 framework; although the agreement has not yet been finalized. Ghana, Ethiopia, Chad, and Zambia are some of the countries that formally defaulted on their national debt.

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Zambia seals $3 billion international bond rework

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In a significant development that moves the nation closer to exiting its protracted debt restructuring, Zambia has announced that it has achieved an agreement with a consortium of private creditors on the restructuring of $3 billion of its foreign bonds.

According to the most recent agreement, Zambia’s three current instruments would be converted into two amortizing bonds, one of which would have higher repayment rates if the nation’s economic prospects and capacity to manage its debt were better.

“History has been made!” President Hakainde Hichilema said on social media platform X. “We are pleased to announce the agreement with our Eurobond holders.”

With some substantive changes, the nature of Monday’s proposal is similar to a preliminary agreement that was struck late last year but was later abandoned because official creditors, who include nations like China and France, rejected it.

Bondholders’ total claim against the country increased to $3.98 billion as a result of accrued unpaid interest; however, under the terms of the revised agreement, investors will get bonds with a face value of $3.05 billion, down from the $3.135 billion that was initially suggested in October.

Being the first African country to default on its foreign debt following the effect of the Covid-19 pandemic and has been keen on a restructuring of the debt. However, the lengthy delays in the process have hindered much-needed investments, slowed down economic growth, and put pressure on the regional financial markets.

After a proposal to restructure $3 billion in Eurobonds was rejected by its official creditors, Zambia struggled to restart its debt restructuring process. According to international media, China and other creditors did not think the proposed debt relief granted by the government matched that of the bondholders.

A terrible drought that has been labelled a national calamity and is affecting the production of food and hydropower has made the situation worse, although its currency, the Kwacha has been on the rise despite the odds.

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