This Week in Africa Finance- 211123
Key Takeaways: Africa Export-Import Bank (Afreximbank), has signed many deals, Cameroon reviews plans for its $333.2 million bond issue and Kenya got an extra $938 million to meet Eurobonds commitments.
Sovereign Debt
Cameroon rescinds $333.2 Million International Bond Issuance till 2024.
The Cameroonian government has decided to rescind their decision to issue $333.2 million as Moody's shifted its rating from speculative but stable (B2) to (Caa1).
Why it matters: Cameroon is going through economic pressures like most African countries. This includes public finance management weakness, liquidity challenges and issues around balancing the budget.
And the numbers: As of the end of August 2023 Cameroon’s domestic arrears were at 0.9% of GDP and its debt arrears were cleared as of Sept 2023, with inflation averaging 6.9%. Fitch recently revised Cameroon’s outlook from Long-Term Foreign-Currency Issuer Default Rating (IDR) to Negative from Stable and affirmed the IDR at “B".
The bottom line: Though the country’s external reserve position remains weak, foreign exchange reforms and hydrocarbon receipts in current market conditions should increase its foreign reserves.
Sovereign Debt
Kenya gets an extra $938 million IMF reprieve to cover Eurobond payback.
Kenya planned to pay back $300 million of its $2 billion Eurobond next month, but then the plan changed with the help of the IMF offering an extra $938 million to meet its commitments.
Why it matters: The Kenya government continues to work with its bilateral creditors and multilateral banks to reduce its debt repayments.
- Global money managers have raised concerns about the repayment plans and the reduction in Kenya’s foreign reserve.
- Fitch rating has affirmed Kenya’s sovereign’s rating at ‘B’ and revised the outlook to negative.
And the numbers: Kenya budgeted a projected 3.0% of GDP in FY24 for meeting its debt repayments but is expected to rise to 3.5 % due to currency depreciation, hence the proposed payback of $300 million of $2 billion Eurobonds due June 2024.
The bottom line: The unexpected increase to US$938mn to Kenya's credit facility programme would enable the country to meet June 2024's US$2bn Eurobond principal repayment.
Sovereign Debt
Zanzibar and the Republic of Korea’s Exim Bank have signed a $163.6 million loan for the construction of hospitals needed for teaching and referrals.
Private Credit
Tanzania’s leading Financial Services Provider CRDB Bank and the Africa Export-Import Bank (Afreximbank) have signed a Memorandum of Understanding (MoU) for $115 million. The credit facility will be used to bolster investments in key sectors such as agriculture, oil and gas and trade.
Egypt’s Bedaya Mortgage Finance, a subsidiary of EFG Hermes and GB Capital Group, is set to complete a securitization transaction worth EGP 800 million (approximately $25.9 million) next month.
Tasheel Microfinance, a subsidiary of Egyptian Unicorn MNT Halan is to issue bonds of EGP 3.8 billion( approximately $122 million) to enable the company to accelerate its growth and diverse products.
Sovereign Finance
The Nigeria Sovereign Investment Authority (NSIA) has launched a $500 million Renewables Investment Platform for Limitless Energy( RIPLE). They have also signed a Memorandum of Understanding (MoU) with the International Finance Corporation (IFC) as a strategic partner for a pilot investment.
Trade Finance
Nigeria's United Bank for Africa (UBA) has signed a trade finance agreement worth $150 million with the African Export-Import Bank (Afreximbank).
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