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

Published

4 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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World Bank grants Malawi $57.6 million for food crisis

Published

3 hours ago

April 27, 2024

Ifeoluwa Dada

As a response to its food crisis, the World Bank said on Friday that it would give Malawi $57.6 million in “quick release” grants.

“This support comes in the context of the severe food crisis the country is suffering due to El Niño conditions in the wider southern Africa region,” the World Bank said in a statement.

“A series of intense disaster events over the last few years has left almost no time for the country to recover and has resulted in a severe erosion of food security at the national level.”

Malawi is one of the least developed countries in the world. It is ranked 170 out of 187 countries in the 2010 Human Development Index. Almost 16 million people live there, and 90% of them make less than $2 a day. That’s 53% of the total population.

The United Nations Children’s Fund (UNICEF) says that 46,000 children in Malawi are seriously malnourished. In 2023, UNICEF said that more than 500,000 Malawian children were at risk of not getting enough food.

Now, Malawi has a lot of programs in place to deal with things like poverty, and climate change, and to make the business and agriculture more diverse.

VenturesNow

Nigerian oil regulator implements regional fuel standards

Published

1 day ago

April 26, 2024

Ifeoluwa Dada

Nigeria’s oil authority has clarified that the recent changes to diesel fuel sulphur content standards are part of a regional effort to make things more uniform and are not meant to loosen rules for local refineries.

A report from S&P Global last week said that the West African fuel market had changed a lot after Nigeria raised the maximum diesel sulphur content from 200 parts per million (ppm) to around 650 ppm. This caused worries that the country might be lowering its standards to allow diesel made in Nigeria that is higher than the 200 ppm limit.

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), on the other hand, said it was only following a 2020 decision by the Economic Community of West African States (ECOWAS) that all of the regions had to slowly switch to better fuels.

Fuels that have a lot of sulfur can hurt engines and make the air dirty. As of right now, the ECOWAS rule lets locally-made fuel have more sulfur until January 2025. After that, a standard of less than 5 parts per million will be used for all oil, whether it is refined in West Africa or brought in from another country.

Farouk Ahmed, the head of the NMDPRA, told Reuters that the new limits are in line with ECOWAS’s choice to require stricter fuel specifications. The new rules will go into effect in January 2021 for non-ECOWAS imports and January 2025 for ECOWAS refineries.

“We are merely implementing the ECOWAS decision adopted in 2020,” Ahmed said.

“So a local refinery with a 650 ppm sulphur in its product is permissible and safe under the ECOWAS rule until January next year where a uniform standard would apply to both the locally refined and imported products outside West Africa”, Ahmed said.

Ahmed said that importers were told that the amount of sulphur allowed was going down, from 300 parts per million in February to 200 parts per million this month. This was done long before the huge Dangote refinery started providing diesel.

Diesel with a sulphur level of between 1,500 ppm and 3,000 ppm could be brought in by importers before.

The switch to cleaner fuels is in line with efforts to protect the environment around the world and makes sure that all area refiners have the same chances.

Nigeria recently had its worst blackout in decades because of a problem with its energy supply. The high cost of alternative energy sources has been a huge problem for both businesses and individuals, with the price of diesel being the most affordable choice for businesses.