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Africa’s Global ESG bonds to reach $4.4 Billion in 2024— Report

Published

9 months ago

March 19, 2024

The value of foreign loan securities that African organisations had issued to obtain money for investments that adhered to ESG (environment, social, and governance) standards would reach $4.4 billion in 2024.

A study released on Tuesday by the Ecofin Agency stated that the value of ESG bonds issued between January and February 2024 exceeded the $1.4 billion that was raised in 2023.

One important participant in the market has been the African Development Bank, which tested the issuance of $2 billion in social bonds and $750 million in hybrid sustainable bonds in January 2024. Africa’s Arab Bank for Economic Development is another participant in the industry.

“With the support of the African Export-Import Bank as the lead arranger, BADEA has issued up to €500m. So far, this market momentum has benefited the French financial group BNP Paribas, which currently leads the ranking of arrangers for this type of bonds on the continent, with a 17.5 per cent market share. Following are the American institutions JPMorgan and Bank of America Securities,” part of the report read.

ESG bonds are still expanding in Africa in tandem with a thriving worldwide market. According to projections and estimates from the rating agency Moody’s, the total value of emissions of this kind is anticipated to reach $950 billion in 2024.

It mentioned that development finance organisations like the AfDB, which in 2023 sponsored moves from two nations (Egypt and Cote d’Ivoire) in that regard, supported those financial instruments across the continent.

“Several local markets are also developing, notably in sub-regions like the West African Monetary Union where the main agency in charge of managing the money market (UMOA-Titres) issued, at the end of 2023, the first ESG bonds in the sub-region,” it stated.

Related Topics:Africa Bonds ESG Featured

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IMF, Egypt reach agreement for fourth review of Egypt’s $1.2 billion loan request

Published

23 hours ago

December 26, 2024

Ifeoluwa Dada

Egypt and the International Monetary Fund (IMF) have reached a staff-level agreement over the fourth review of the Extended Fund Facility arrangement, which might lead to a $1.2 billion payout under the program.

In March, Egypt, struggling with rising inflation and cash shortages, consented to the $8 billion, 46-month facility. Its economic problems were made worse by a precipitous drop in Suez Canal revenue over the last year due to regional tensions.

Over the next two years, Egypt’s government has committed to raising its tax-to-revenue ratio by 2% of GDP, according to the IMF, emphasising removing exemptions rather than raising taxes.

According to a statement from the IMF, this would allow it to expand social expenditure to support vulnerable populations.

“While the authorities’ plans to streamline and simplify the tax system are commendable, further reforms will be needed to enhance domestic revenue mobilization efforts,” the statement said.

According to the IMF statement, Egypt had also committed to maintaining its commitment to a flexible currency rate and to taking more urgent action to guarantee that the private sector became the primary driver of development.

The IMF’s executive board still has to accept the fourth review’s staff-level agreement.

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Libya’s eastern govt accepts petrol subsidy elimination

Published

23 hours ago

December 26, 2024

Ifeoluwa Dada

In a recent statement, the eastern government of Libya claimed it had reached a consensus on a plan to eliminate gasoline subsidies and would draft a mechanism to carry out the accord.

Additional information on the idea was not released by the administration led by Osama Hamad, a challenger to the internationally acknowledged Tripoli-based government.

However, it is uncertain if Hamad’s government would be able to carry out the plan in the divided nation.

According to the Global Petrol Prices online tracker, a litre of gasoline costs just 0.150 Libyan dinars ($0.03) in OPEC member Libya, making it the second-cheapest in the world.

Following an uprising against former ruler Muammar Gaddafi in 2011, smuggling networks have thrived in the ensuing political unrest and armed fighting. In 2014, conflicting eastern and western governments separated the nation.

A World Bank analysis estimates that the annual value of fuel smuggling from Libya is at least $5 billion.

In a meeting with Mari Barrasi, the deputy governor of the Central Bank of Libya (CBL), located in Tripoli, and four members of the bank’s board of directors, Hamad in Benghazi supported the idea of removing subsidies.

The CBL’s Benghazi branch offices served as the venue for the conference.

The eastern parliament appointed Hamad in 2023 to succeed Abdulhamid Dbeibah, who had been put in position in 2021 under a U.N.-backed procedure that the parliament said had lost its legitimacy.

Dbeibah, who is located in Tripoli, stated in January that he will conduct a public poll on the topic of eliminating gasoline subsidies, but he hasn’t done anything about it since.

According to CBL figures, gasoline subsidies cost 12.8 billion Libyan dinars between January and November of this year. 4.8 Libyan dinars to $1 is the official exchange rate.