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Zambia: Creditors, IMF raise ‘reservations’ on bondholder deal

Published

1 year ago

November 10, 2023

Following a debt restructuring agreement reached between Zambia and an international bondholder group, the country’s finance ministry has revealed that there are concerns as official creditors and the International Monetary Fund have “expressed reservations.”

The ministry said in a statement that Zambia and the bondholder group’s steering committee were continuing talks despite the official creditor committee and the IMF voicing their doubts during discussions over the “last several days.”

According to a source quoted by Reuters, the steering committee and the government are now having discussions under extended non-disclosure agreements.

Following the announcement of the bondholder deal, Zambia’s three existing international bonds, valued at $3 billion, saw a surge in value. The plan calls for the issuance of two additional “amortising” bonds with maturities set for 2035 and 2053, for a total value of $3.135 billion, which is greater than the face value of the existing outstanding Eurobond debt.

Since the announcement of the deal in principle, the bonds have appreciated. But the news of the IMF and official creditors’ reservations has caused Zambia’s bonds to decline; at 08:58 GMT, the 2024-dated note was down more than 0.9 cents on the dollar to 63.036 cents.

If Zambia’s economy outperforms forecasts during a monitoring period within 2026–2028, the 2053 bond’s maturity would also be pushed forward to 2035, with higher coupon payments.

Observers have pointed out that under the “base case” scenario, bondholders would receive over $500 million in amortisation for 2024–2025 in addition to over $100 million in annual interest payments; official creditors, on the other hand, have been granted a three-year grace period and lower interest rates than bondholders.

Zambia went into default on its external debts three years ago, causing an economic downturn following the COVID-19 pandemic. The Southern African country has since sought restructuring from its bilateral creditors with the hope of stabilizing its economy.

Related Topics:debt burden Featured IMF Zambia

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Moroccan annual inflation rises to 0.8% in November

Published

2 days ago

December 21, 2024

Ifeoluwa Dada

Morocco’s statistics office has confirmed that the country’s annual inflation rate, as determined by the consumer price index, increased from 0.7% in October to 0.8% in November.

Monthly, consumer prices decreased by 0.2% from October.

The primary driver of inflation, food costs, grew by 0.8% compared to the previous year, while non-food inflation climbed by 0.7%. Core inflation, which does not include more erratic items like food, increased 2.6% annually and 0.2% monthly.

According to the central bank, inflation is expected to average 1% this year, down from 6.1% last year.

Despite the Al-Haouz earthquake, a spike in inflation, and worldwide economic challenges, Morocco’s GDP grew by 3.4% in 2023.

A recovery in tourism, robust industrial exports, and rising private consumption—all bolstered by prudent macroeconomic policies—were the main drivers of growth.

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Nigeria’s $42bn foreign reserves enough for 9 months’ imports— Central Bank

Published

3 days ago

December 20, 2024

Ifeoluwa Dada

According to Olayemi Cardoso, Governor of the Central Bank of Nigeria (CBN), the nation’s $42.01 billion in foreign reserves can cover imports of goods and services for almost nine months.

Cardoso promised Nigerians improved economic fortunes in 2025 while addressing the Senate Committee on Banking, Insurance, and Other Financial Institutions yesterday in Abuja at the presentation of the performance index report.

Cardoso stated: “External Reserves rose from $ 38.35 billion it was on September 30, 2024, to $ 42.01 billion as of December 12, 2024”.

He clarified that third-party receipts in Q3 2024 and revenues from taxes connected to crude oil were the main drivers of the rise in foreign reserves during the specified time.

“We saw remarkable improvements in our trade balance and maintained a current account surplus,” he added.

“Our external reserves level can finance over 9.09 months of import of goods and services or 13.91 months only, higher than the international benchmark of 3.0 months and a robust buffer against shocks”.

On cash shortage, the CBN boss reiterated the N150 million fine against any branch of banks caught illegally distributing new Naira notes to currency hawkers and unscrupulous elements and said the Nigerian economy will improve in 2025 through policies and measures.

He predicted a stronger economic future: “Despite our economy’s challenges, there are clear reasons for optimism.

“The gradual stabilization of the forex market, ongoing banking sector recapitalization, and positive growth trends in key sectors, especially the services sector, indicate a path toward recovery and stability.”