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Ethiopia joins Zambia, Ghana, others on Africa’s debt default list

Published

12 months ago

December 27, 2023

After failing to make a $33 million “coupon” payment on its only international government bond, Ethiopia has become Africa’s third debt defaulter in as many years.

The country declared earlier this month that it planned to formally enter default. Following the COVID-19 pandemic and a two-year civil war that came to an end in November 2022, the nation has faced extreme financial hardship.

Although it was originally scheduled to make the payment on December 11, a 14-day “grace period” provision in the $1 billion bond gave it until Tuesday to deliver the funds.

It declared earlier this month that it planned to formally enter default. On December 8, it announced the parallel talks it was holding with pension funds and other creditors in the private sector that owns its bonds had broken down. Also, on December 15, S&P Global, a credit rating agency, downgraded the bond to “default” based on the likelihood that the coupon payment would not be made.

Two people with knowledge of the matter claim that as of Friday, December 22, the final international banking working day before the grace period ends, bondholders had not received their coupon payment.

Requests for comment from Ethiopian government representatives were not answered on Friday or over the weekend.

Several African countries, like Zambia, Nigeria, Ghana, Tunisia, and Egypt, among others, are grappling with high foreign debt. Ethiopia will be included in a comprehensive “Common Framework” restructuring along with Zambia and Ghana.

Earlier this year, United Nations Secretary-General, Antonio Guterres, at the opening ceremony of the annual African Union summit in Ethiopia, argued for reforms to the structure of international finance to serve the needs of developing countries more efficiently.

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Moroccan annual inflation rises to 0.8% in November

Published

1 day 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.”