VenturesNow

Kenya’s govt authorizes sale of its stakes in 6 publicly traded firms

Published

2 weeks ago

June 12, 2024

According to President William Ruto’s office, the Kenyan cabinet has accepted a government proposal to sell shares it owns in six listed companies, including the nation’s stock exchange and a cement manufacturer.

The government will sell its holdings in battery manufacturer Eveready East Africa, Nairobi Securities Exchange, HF Group, Stanbic Holdings, Liberty Kenya Holdings, and East African Portland Cement, according to a statement released late on Tuesday by Ruto’s office.

The National Social Security Fund owns 27% of East African Portland, while the government owns a direct 25.3% share. The government holds 1.1% of Stanbic Holdings, 0.9% of Liberty Kenya Holdings, 2.41% of HF Group, 3.36% of Nairobi Securities Exchange, and 17.2% of Eveready.

This action is in line with government intentions to sell off stakes in further state-owned businesses. After passing a bill in October to provide guidelines for the process, Ruto said in November that the government intended to privatize 35 state-owned businesses.

But in December of last year, the opposition party filed a lawsuit to oppose the plan, arguing that some of the enterprises being sold had vital national interest and should only be sold with public approval. As a result, the plan encountered difficulties.

VenturesNow

IMF grants nearly $900 million to boost Tanzania’s budget

Published

2 days ago

June 22, 2024

Ifeoluwa Dada

In addition to concluding an additional inquiry permitting the transfer of $149.4 million for budget support, the International Monetary Fund (IMF) said on Saturday that its executive board had approved funding for Tanzania totalling $786.2 million to address climate change.

The IMF stated in a statement that Tanzanian authorities are dedicated to carrying out reforms to maintain macro-financial stability, bolster economic recovery, and foster sustainable and inclusive growth.

The administration of President Samia Suluhu Hassan has implemented several economic reforms over the past three years to bring the nation’s real gross domestic product growth rate back to the 6% to 7% range seen before the pandemic.

The multilateral body noted that Tanzania’s economic reform program was still robust and that the country’s economy expanded again in 2023 after contracting in 2022.

“The current account deficit is narrowing, reflecting fiscal consolidation, easing commodity prices, and tight external financing conditions,” the IMF said.

Although the economy is predicted to continue to recover, the IMF stated that there were obstacles due to an “unfavourable global economic environment.”

According to the World Bank, Tanzania’s economy—which is based on tourism, mining, agriculture, and manufacturing—has persevered in the face of repeated catastrophic weather events and climate change because of a growth in the services sector.

As of last week, Kitila Mkumbo, the minister of state in the president’s Office for Planning and Investment, predicted that the economy will accelerate to 5.4% this calendar year from 5.1% in 2023.

VenturesNow

Sources reveal Ghana, bondholders reach agreement for $13bn debt restructuring

Published

2 days ago

June 22, 2024

Ifeoluwa Dada

Following a deal struck with official creditors earlier this month, Ghana has secured an agreement in principle with its bondholders for the restructuring of $13 billion in foreign debt, according to three sources quoted by Reuters.

According to two of the sources, bondholders will get a haircut on the principal of up to 37% as part of the transaction, and the bonds’ term will be extended. Under the weight of the COVID-19 pandemic, the conflict in Ukraine, rising global interest rates, and soaring debt, the West African country that produced gold and cocoa went into default on the majority of its $30 billion in foreign debt in 2022.

Ghana, like Zambia, enrolled in the G20 Common Framework’s debt treatment program. This program’s objectives are to speed up debt restructurings and include China, the newest significant bilateral lender, in the process. After Zambia, the first African nation to default during the pandemic became the first copper producer in southern Africa, its bondholders approved the restructuring earlier this month.

“Things are pretty close” for Ghana. A source who wished to remain anonymous stated, “We can anticipate an announcement by next week, as they were not authorized to speak to the media.”

According to the other two sources, the news might be released as early as this Friday. Due to the late hour, it was not possible to quickly reach the Paris Club, an alliance of creditor nations, or Ghana’s finance ministry for comment.

In mid-March, Ghana initiated formal negotiations with two groups of bondholders: one comprising regional African banks and another of Western asset managers and hedge funds.

However, the proposed agreement did not satisfy the requirements of the International Monetary Fund’s (IMF) debt sustainability analysis, causing the negotiations to break down in April and forcing both parties to reorganize to come up with a workable solution.

According to the three individuals, the agreement in principle was reached because it later aligned with an updated IMF debt framework on Ghana that was previously disclosed to bondholders.

The second-largest cocoa producer in the world signed an agreement with its official creditor committee earlier this month to formalize a debt restructuring agreement that was negotiated in January.

The agreement’s broad contours made it possible for the IMF executive board to convene on June 28 in Ghana to discuss a second assessment of the country’s $3 billion loan, a three-year package, and the release of the subsequent $360 million tranche.