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Chinese lenders fine Kenya $10m for defaulting on railway loans

Published

2 years ago

October 13, 2022

Chinese lender banks have fined Kenya Ksh1.312 billion (about $10.8 million) for defaulting in payment of loans it took to build Standard Gauge Railway (SGR), which was due for the year ending June, 2022.

According to Kenyan media, the country had “tapped over half a trillion shillings from Chinese lenders led by the Export-Import Bank of China, to fund the construction of the SGR from Mombasa to Naivasha,” but the country’s struggles with mounting public debt led to the default on repayment of the loans.

A leading newspaper in the East African country, Business Daily, reported that “taxpayers have been forced to shoulder the burden of the SGR loans because revenues generated from the passenger and cargo services on the track are not enough to meet the operation costs, which stood at Ksh18.5 billion ($152.8 million) in the year to June against sales of Ksh15 billion ($123.9 million).

“This (Ksh1.312 billion/$10.8 million) relates to the cost of default on interest at one percent of the due amount,” the Business Daily said.

“The SGR posted an operation loss of Ksh3.4 billion ($28 million), and wired Ksh22.7 billion ($187.6 million) in loan repayments in the year to June.

“The default came in a year when Kenya had asked for an extension of the debt repayment moratorium from bilateral lenders, including China, by another six months to December 2021, saving it from committing billions to the Beijing lenders.

“But the lenders, especially Exim Bank of China, opposed Kenya’s application for a debt repayment holiday in a standoff that delayed disbursements to projects funded by Chinese loans.

“China postponed the repayments in January last year, helping Kenya temporarily retain Ksh27 billion ($223 million) that was due for six months ending June 2021,” the report stated.

Related Topics:China Default Featured Fine Kenya Loans

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Nigeria received $1bn tax income from Shell in 2023

Published

12 hours ago

May 8, 2024

Ifeoluwa Dada

Shell Nigeria, a multinational oil company, claims that through the operations of Shell Petroleum Development Company of Nigeria Limited and Shell Nigeria Exploration and Production Company of Nigeria Limited, it exclusively paid $1.09 billion in corporate taxes and royalties to the Nigerian government in 2023.

According to the numbers released in the recently released 2023 Shell Briefing Notes, SNEPCo remitted $649 million, while the SPDC paid $442 million.

Similar payments made by the two firms in 2022 totalled $1.36 billion, according to a statement from Abimbola Essien-Nelson, the company’s manager of media relations.

“These payments are Shell exclusive and do not include those made by our partners,” said SPDC Managing Director and Country Chair, Shell Companies in Nigeria, Osagie Okunbor.

Okunbor explained, “Shell companies in Nigeria will continue to contribute to the country’s economic growth through the revenue we generate and the employment opportunities we create by supporting the development of local businesses.”

He continued by saying that Shell has been an investor in Nigeria for more than 60 years and that the Briefing Notes provide an update on the state of the companies’ operations in Nigeria for 2023, including SPDC, SNEPCo, Shell Nigeria Gas, and Daystar Power.

He claimed that the studies demonstrated how the businesses kept driving advancement, collaborating closely with communities and stakeholders to support socio-economic growth and offer more affordable, environmentally friendly energy options.

“It is important to emphasise that Shell is not leaving Nigeria and will remain a major partner of the country’s energy sector through its deep-water and integrated gas businesses. Our collective focus remains on delivery of safe operations and care for our people,” Okunbor maintained.

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Zimbabwe’s new gold-backed currency now official unit of exchange

Published

1 day ago

May 7, 2024

Ifeoluwa Dada

Zimbabwe’s Treasury says that the newly introduced gold-backed currency is the official unit of exchange for transactions. It also stated on Tuesday that laws requiring businesses to utilize the official rate would be released soon.

The Zimbabwe Gold (ZiG) has been stable on the official market since its inception in early April, but it has had a shaky start on the black market, where dealers are demanding a premium of 65% of the official rate to purchase dollars.

Additionally, some stores are charging customers who pay in the new currency—while the ZiG is being rejected by informal traders—a premium over the market rate, which is fixed at ZiG 13.6 per US dollar.

“To ensure orderly pricing, the Government will soon be introducing the necessary regulations to ensure that no exchange rate other than the official rate will be used for the pricing of all goods and services,” Finance Minister Mthuli Ncube said in a statement.

Since the ZiG’s inception, the government has been working to keep it afloat; this month, officials launched a campaign against unlicensed foreign exchange dealers.

Zimbabwe, located in southern Africa, abandoned the Zim dollar last month after it lost 70% of its value since the beginning of the year. This is the country’s fourth effort to introduce a local currency in ten years.