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Ghana, official creditors set to meet over debt restructuring terms

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According to sources quoted by Reuters, Ghana’s official creditors are scheduled to meet on Monday to discuss restructuring some $5.4 billion in loans to the country.

The meeting is a significant step taken in the direction of obtaining the IMF’s next funding tranche. According to the sources, the meeting will likely centre around reaching a consensus regarding a “cut-off date”—the deadline beyond which new loans from bilateral creditors will not be restructured. Ghana’s debt rework has run into trouble with defining this date.

Ghana is restructuring its debt under the G20 Common Framework platform, which has been criticised for delays and divisions between creditor groups. The country currently owes about $13 billion to overseas bondholders.

Almost a quarter of Ghana’s $20 billion in external debt also designated for restructuring is held by the country’s bilateral lenders, which include the governments of China and France, who share co-chairship of the OCC.

Given that Ghana had defaulted earlier that month, some creditors are rumoured to favour December 31, 2022 as the deadline. To assist the world’s poorest nations in coping with the aftermath of the COVID-19 pandemic, the Group of 20 introduced its debt service suspension initiative (DSSI) on March 24, 2020, which is why some advocated for the same date.

The Paris Club of major creditor nations, which does not include China among its permanent members, will meet on Friday in advance of the OCC meeting on January 8, according to two sources.

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Nigeria’s inflation hits 28-year high of 33.69% in April

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Nigeria’s consumer inflation reached a 28-year high of 33.69% in April, up from 33.20% in March, according to statistics agency figures released on Wednesday.

President Bola Tinubu’s administration has slashed petrol and energy subsidies and devalued the local naira currency twice.

To manage pricing pressures, the central bank has hiked interest rates twice this year, including the highest hike in almost 17 years. The central bank governor has stated that rates will remain high for as long as necessary to reduce inflation. The bank will host another rate-setting meeting next week.

When compared to the previous year, the inflation rate in April 2024 was 11.47 percentage points more than in April 2023, when it stood at 22.22 percent. This implies that the headline inflation rate has increased dramatically during the last year.

According to the National Bureau of Statistics, food and nonalcoholic beverages remained the largest contributor to inflation in April. Food inflation, which accounts for most of the inflation basket, rose to 40.53% yearly from 40.01% in March.

Price pressures have left millions of Nigerians facing the biggest cost-of-living crisis in decades, as they fight to satisfy their most basic necessities.

Tinubu has offered a 35% salary increase for state personnel to alleviate pressure on government workers. To assist disadvantaged households, his government has resumed a direct cash transfer program and provided at least 42,000 tons of grains such as corn and millet.

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Uganda discusses power line to South Sudan with China’s Sinohydro

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According to the president’s office, Uganda is in negotiations with Sinohydro Corporation Limited of China to build a $180 million power transmission line that would enable Uganda to export electricity to South Sudan, which is severely short on energy.

Ugandan President Yoweri Museveni received a group led by Vice President of Sinohydro Corporation Yang Yi Xin on Monday as part of the negotiations, according to a late-morning statement from Museveni’s office.

The project, according to the statement, will entail building a new substation and expanding two existing ones in addition to building a 138-kilometre high-voltage transmission line to provide power to South Sudan.

“We are very much willing to help develop this project with the required finance if needed,” Xin was quoted as telling the president.

The statement stated that Museveni endorsed Sinohydro’s proposal to carry out the project. Uganda and South Sudan inked a power sales deal in June of last year, enabling Uganda to sell electricity to South Sudan.

To enable Uganda to export electricity to South Sudan, the two nations inked a power sales deal in June of last year. The Chinese firm is completing a $1.5 billion, 600-megawatt hydropower project on the River Nile in Northern Uganda that is meant to be the source for electricity exports to South Sudan.

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