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Creditors finally agree to negotiate Zambia’s rising debt

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There is relief in sight for Zambia as its creditors on Saturday pledged to negotiate a restructuring of the country’s debts.

The International Monetary Fund’s managing director, Kristalina Georgieva has applauded the move and labelled it as “clearing the way” for a $1.4 billion Fund programme.

News broke last week that creditors are expected to commit to debt relief needed to unlock $1.4 billion from the IMF.

Zambia, has been on a trail to have its debt restructured, the country and its lenders seek to end a drawn-out restructuring process.

According to a statement by G20 chair Indonesia the creditor committee, co-chaired by China and France, it supported Zambia’s “envisaged IMF upper credit tranche program and its swift adoption by the IMF Executive Board”.

“Very pleased the Official Creditor Committee for Zambia has provided its financial assurances clearing the way for a Fund program,” IMF managing director Kristalina Georgieva said in a tweet.

“The delivery of these financing assurances will enable the IMF Executive Board to consider approval of a Fund-supported program for Zambia and unlock much needed financing from Zambia’s development partners,” Georgieva said in a statement released by the IMF after her tweet.

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.

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Nigeria: President Buhari makes U-turn on approval of Exxon unit acquisition by Seplat

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Nigeria’s President Muhammadu Buhari has made a U-turn in his earlier position that grant approval of Exxon Mobil’s  sale of local offshore shallow water assets to Seplat.

President Buhari had on Monday approved the $1.28 billion transaction, only for the Nigerian Upstream Petroleum Regulatory Commission to say it opposed the deal, although it did not give a reason.

Presidential spokesman Garba Shehu, told newsmen that “the president has decided to allow the regulator to do their work. He is withholding his earlier given approval, for now, to allow the process to be completed, that is basically it.”

In February, Seplat Energy Plc, unveiled plans to acquire the entire share capital of Mobil Producing Nigeria Unlimited (MPNU) from Exxon Mobil Corporation Delaware (USA Incorporated). That includes all of Exxon’s entire shallow water assets in the Niger Delta.

Seplat on its side said it is yet to received no official notification of President Buhari’s U-turn and is seeking clarification from authorities.

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Nigeria climbs to fourth position on World Bank’s list of most indebted nations

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Nigeria has moved into the fourth position of World Bank’s list of countries with the highest debts, according to the Bank’s financisl report released on Monday.

Going by the World Bank Fiscal Year 2022 audited financial statements for International Development Association (IDA), Nigeria now owes a debt stock of $13bn as at June 30, 2022.

The country also moved up one spot from the fifth position it was rated as of June 30, 2021, with an IDA debt stock of $11.7bn.

The global bank also revealed in its audited financial statements that Nigeria has accumulated about $1.3bn IDA debt within a fiscal year, adding that the debt is different from the outstanding loan of $486m from the World Bank’s International Bank for Reconstruction and Development.

What this means is that Nigeria now has the highest IDA debt in Africa, and is only bettered by the likes India with $19.7bn debt, Bangladesh, $18bn
and Pakistan, $15.8bn, all from the Asian bloc.

The Washington-based international Financial Institution also disclosed that Nigeria’s debt which may be considered sustainable for now, is fast growing into a state of vulnerability and could become costly.

“Nigeria’s debt remains sustainable, albeit vulnerable and costly, especially due to large and growing financing from the Central Bank of Nigeria,” it said.

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