VenturesNow

AfDB demands improved terms, $25 billion to prevent “lost decade”

Published

5 months ago

June 7, 2024

According to the director of the continent’s development bank, Akin Adesina, Africa needs $25 billion, faster debt restructurings, and more favourable financing terms for the Africa Development Fund to prevent a lost decade.

Adesina, the continent was suffering from “long fiscal COVID” and the world was not doing enough to support it in getting past the years of hardship brought on by the pandemic and interest rate spikes, which had forced many countries into default.

“The G20 Common Framework, which is the bilateral and multilateral path to do (debt restructuring), must work faster for Africa,” Adesina said in a speech on Friday at London’s Chatham House, adding: “We can’t afford to have a lost decade.”

He also demanded a $25 billion restocking of the African Development Fund, the African Development Bank’s concessional lending division that provides loans to economically disadvantaged nations. The most ever replenishment committed, at $8.9 billion, during the funding cycle spanning 2023 to 2025.

This week, Zambia became the first nation to complete a debt rework under the Common Framework, a framework created by the G20 to assist developing nations in renegotiating unsustainable debt with all creditors, including China, which has significantly increased its loans to developing nations over the previous ten years.

However, Zambia’s authorities and others have complained that the nearly four gruelling years it took were too long for the procedure. In addition, Adesina reported that 22 African nations are at significant risk of financial trouble and that debt servicing obligations will reach $74 billion this year, up from $17 billion in 2010. Ethiopia and Ghana are also in default.

“This is because concessional financing has declined,” he said, adding: “You can’t do development at commercial rates. We have to make sure that the global financing system delivers more for Africa and avoid economic divergences that are coming about because of slow economic recovery in Africa from COVID.”

Adesina subsequently to journalists that the Paris Club, the established consortium of mostly Western creditor countries, needed to be permanently enlarged and that the Common Framework needed to incorporate quicker credit committee formation.

“The Paris Club was all about concessional lenders. But the world has changed,” he said, adding that expanding it was important “because it will allow you to reach a faster dialogue and a resolution”.

VenturesNow

Food prices drive second straight monthly hike in Nigeria’s inflation

Published

3 hours ago

November 17, 2024

Ifeoluwa Dada

According to official statistics released on Friday, Nigeria’s inflation rate increased for the second consecutive month in October, rising to 33.88% in annual terms from 32.70% in September, mostly as a result of increasing food costs.

In an attempt to boost economic development and strengthen public finances, President Bola Tinubu devalued the naira and reduced subsidies, which caused inflation to spike in the second half of last year.

As the effects of the naira devaluation started to lessen in July of this year, a slew of hikes in the price of petroleum and devastating floods that destroyed crops once again exacerbated pricing pressures, making the greatest cost-of-living crisis in decades worse in Africa’s most populous country.

According to the National Bureau of Statistics, price increases for basics such as rice, maize, bread, potatoes, and cooking oil prompted food inflation to surge from 37.77% in October to 39.16% year over year.

This year, more than 1.5 million hectares of agriculture have been damaged by torrential rain and floods in 29 of Nigeria’s 36 states, leaving millions hungry and displacing large numbers of people.

In an effort to curb inflation, the central bank has raised interest rates five times this year. On November 26, it is expected to make its final rate decision of the year.

VenturesNow

MTN financial report reveals drop in group service revenue

Published

3 hours ago

November 17, 2024

Ifeoluwa Dada

Due to operational difficulties in Sudan and the depreciation of the Nigerian naira, MTN Group, Africa’s largest telecom provider, announced on Thursday an 18.5% decline in service revenue for the third quarter that concluded on September 30.

With 288 million users in 17 African regions, MTN said that its group service revenue dropped from 156.3 billion rand ($6.99 billion) in the same quarter of the previous year to 127.4 billion rand.

Despite stating that “the naira was less volatile on a sequential basis in Q3 than in preceding quarters,” the business reported a 48.7% decline in MTN Nigeria’s income due to the currency’s depreciation.

Due to a stronger Ugandan shilling than the previous year, Uganda’s largest contributor, MTN South Africa (MTN SA), expanded by a meagre 3.3%.

Due to “subscriber registration regulations in Nigeria and a decline in users in Sudan, where the conflict has displaced millions of people,” the business reported that its subscriber base increased by 1.6% to 288 million.

Given the higher demand in Nigeria despite the legal obstacles, MTN plans to increase its capital expenditures, which it expects would total between 28 and 33 billion rand for the entire year.