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Zambia’s Finance Minister, Musokotwane, calls for IMF programme to restructure international debt

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In the latest push to ease state’s debt burden, Zambia’s Finance Minister, Situmbeko Musokotwane has called for an orderly debt restructuring process for the country.

The minister insisted that a restructuring will be hard to achieve without an International Monetary Fund (IMF) programme.

Finance Minister Situmbeko Musokotwane said on Friday, as he confirmed China and bondholders would join negotiations.

The country’s debt profile has been spiraling in recent years owing to issues predating the pandemic, leaving creditors wrangling over who should take losses on loans.

Zambia opted to bow out of a $42.5 million eurobond repayment in 2020, becoming the first African nation to default on its debt in the Covid-19 era. The country was struggling with a debt burden of almost $32 billion, around 120% of its gross domestic product.

The Zambian President Hakainde Hichilema revealed last month during the first quarter 2022 Economic Conference in Lusaka, that China had come on board to commit and join other creditors in the country’s debt restructuring process.

By that, China, which holds $5.78 billion of Zambia’s debt, has offered to co-chair Zambia’s creditor committee at the meetings. South Africa and France have also offered to co-chair, South Africa’s finance ministry said.

The country’s creditors must now sit down together to agree on the debt relief they will offer, Musokotwane said.

“China finally agreed to come on board, to be part of the Common Framework. The other category of creditors, namely the bond holders have also expressed readiness to engage,” Musokotwane said.

Secretary to the Treasury, Felix Nkulukusa also revealed to journalist that Zambia is expecting a total of $564 million from the World Bank, of which $275 million in budget support will only be released when the IMF board approves Zambia’s programme,

Nkulukusa said Zambia expected further $654 million from the World Bank under another three-year programme starting in July this year.

Musokotwane had said Zambia’s debt restructuring process was “stalled” at IMF meetings last month, after the country secured a staff-level agreement on a $1.4 billion three-year credit facility with the fund in December.

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South Africa’s mining firm, Sibanye-Stillwater, finally agrees wage demands from workers’ union

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After months of industrial engagement, South Africa’s mining firm, Sibanye-Stillwater has agreed on a renumeration increase with the mining workers union.

Sibanye-Stillwater reached an agreement with both the National Union of Mineworkers (NUM) and the United Association of South Africa (UASA) on wages and benefits at its platinum group metal operations.

According to a statement by Sibanye, “the company has presented an inflation-linked, five-year offer comprising fixed average annual wage increases of 6% and above for bargaining unit employees for a three-year period, followed by CPI-linked agreements in years 4 and 5, as well as notable increases in benefits.”

A BBC report says some 80,000 gold miners in South Africa went on a strike to call for higher pay, but their union has significantly scaled down its demands. The National Union of Mineworkers (NUM) is calling for a 10% wage rise, down from earlier demands for increases of up to 60% for some workers.

Trade unions are recognized within the 1996 Constitution of South Africa, which provides for the right to join trade unions, and for unions to collectively bargain and strike.

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Morocco gets $194 million loan from AfDB to boost cereal output

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In a move that is hoped to boost its cereals production and reduce imports, the African Development Bank has approved a 199 million-euro ($194 million) loan to Morocco.

The AFDB in a statement on Friday said it approved the loan, which is part of the bank’s programme to help boost food security, nutrition, and resilient farming across Africa.

As of the 2019/2020 crop year, the total production of cereals in Morocco amounted to over 32 million quintals. With around 18 million quintals, soft wheat accounted for the largest cereal production in the country that year. Durum wheat and barley followed.

According to foreign exchange data, Morocco’s soft wheat import bill doubled to $1.6 billion compared to the same period last year.

A recent incidence of drought has slashed Morocco’s cereals output by 67% to 3.4 million tonnes this year.

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