Version: 4 (current) | Updated: 11/13/2025, 6:20:53 AM
Added description
**File references**
@file_pinax -> documents -> @pinax_collection:collection {creator: @neil_munshi, created: @date_2022_10_14, subjects: ["Economic crisis","Debt restructuring","Inflation","Currency depreciation","Food security","Energy transition","Mining","Political economy","Economic development"]}
@file_54891389_africa -> documents -> @africa_html_54891389:document {type: "newsletter"}
@file_55012826_carbon_notes_african_political_economy -> documents -> @carbon_notes_africa:document {type: "newsletter"}
---
**People & Organizations (content‑specific)**
@neil_munshi:person {full_name: "Neil Munshi"}
@javier_blas:person {full_name: "Javier Blas"}
@brad_setser:person {full_name: "Brad Setser"}
@brad_setser_nov26:person {full_name: "Brad Setser"}
@brad_setser_sep06:person {full_name: "Brad Setser"}
@brad_setser_sep01:person {full_name: "Brad Setser"}
@sergi_lanau:person {full_name: "Sergi Lanau"}
@william_ruto:person {full_name: "William Ruto"}
@emmanuel_macron:person {full_name: "Emmanuel Macron"}
@amos_hochstein:person {full_name: "Amos Hochstein", role: "U.S. Energy Security Envoy"}
@president_akufo_addo:person {full_name: "Nana Akufo‑Addo"}
@finance_minister_ofori_att:person {full_name: "Ken Ofori‑Atta"}
@vice_president_bawumia:person {full_name: "Mahamudu Bawumia"}
@minister_jinapor:person {full_name: "Samuel Jinapor"}
@lazard:organization
@global_sovereign_advisory:organization
@hogan_lovells:organization
@gold_fields:organization
@anglogold_ashanti:organization
@newmont:organization
@precious_minerals_marketing_co:organization
@fidelity:organization
@goldman_sachs:organization
@pimco:organization
@fitch_ratings:organization
@moody_s:organization
@s_and_p:organization
@bank_of_ghana:organization
@central_bank_of_nigeria:organization
@eu_peace_facility:organization
@common_framework:concept
@mineral_security_partnership:organization
@critical_minerals_strategy:document
@critical_raw_materials_act:document
@epf:organization
---
**Places (content‑specific)**
@cape_town:place
@goma:place
@kenya:place
@ghana:place
@zambia:place
@chad:place
@ethiopia:place
@nigeria:place
@south_africa:place
@china:place
@us:place
@uk:place
@eu:place
---
**Concepts (content‑specific)**
@energy_transition:concept
@critical_minerals:concept
@lithium:concept
@cobalt:concept
@graphite:concept
@rare_earths:concept
@critical_minerals_demand:concept
@debt_crisis:concept
@inflation:concept
@currency_depreciation:concept
@cedi:concept
@bond_market:concept
@bond_yield:concept
@debt_service:concept
@gold_bullion_purchase_program:concept
@eacrf_budget:document {estimated_cost_eur: 37, duration_months: 6}
@kenyan_deployment_funding:concept
@kenyan_deployment_goma:event {when: @date_2022_11_10, where: @goma}
@mining_indaba:event {when: @date_2022_02, where: @cape_town}
@imf_program_ghana:document {amount: "$3 bn", country: @ghana}
@imf_program_zambia:document {amount: "$1.3 bn", country: @zambia}
@imf_program_tanzania:document {amount: "unspecified", country: @tanzania}
@imf_program_mozambique:document {amount: "unspecified", country: @mozambique}
@imf_program_benin:document {amount: "unspecified", country: @benin}
@imf_program_egypt:document {amount: "unspecified", country: @egypt}
---
**Relationships**
@pinax_collection -> created by -> @neil_munshi {when: @date_2022_10_14}
@africa_html_54891389 -> contains -> @tweet_javier_blas:document {author: @javier_blas, when: @date_2022_05_07, content: "All Nigerian airlines say they will stop flying their domestic routes indefinitely …"}
@africa_html_54891389 -> contains -> @tweet_brad_setser_nov26:document {author: @brad_setser, when: @date_2022_11_26, content: "Agree with @sobel_mark … IMF's assessment didn't find a need for debt reduction in Chad"}
@africa_html_54891389 -> contains -> @tweet_brad_setser_sep06:document {author: @brad_setser, when: @date_2022_09_06, content: "Zambia's debt restructuring matters because …"}
@africa_html_54891389 -> contains -> @tweet_brad_setser_sep01:document {author: @brad_setser, when: @date_2022_09_01, content: "Zambia's debt restructuring is a test for the G‑20's common framework"}
@africa_html_54891389 -> contains -> @tweet_sergi_lanau:document {author: @sergi_lanau, when: @date_2022_12_01, content: "Foreigners continue to shun South African bonds …"}
@carbon_notes_africa -> mentions -> @mining_indaba
@mining_indaba -> discussed -> @energy_transition
@mining_indaba -> discussed -> @critical_minerals
@critical_minerals -> includes -> [@lithium, @cobalt, @graphite, @rare_earths]
@energy_transition -> drives -> @critical_minerals_demand
@cobalt -> supplied‑by -> @china
@kenyan_deployment_goma -> budget -> @eacrf_budget
@kenyan_deployment_goma -> participants -> @kenya
@kenyan_deployment_goma -> funded‑by -> @kenyan_deployment_funding
@emmanuel_macron -> lobbies for -> @kenyan_deployment_funding
@emmanuel_macron -> discussed with -> @william_ruto
@william_ruto -> approved -> @kenyan_deployment_goma
@eu_peace_facility -> potential‑funding for -> @kenyan_deployment_goma
@epf -> potential‑funding for -> @kenyan_deployment_goma
@ghana -> seeking -> @imf_program_ghana
@ghana -> facing -> @debt_crisis
@ghana -> facing -> @inflation {rate: "40%"}
@inflation -> measured‑by -> @bond_yield
@ghana -> currency -> @cedi
@cedi -> depreciation {percent: 57, period: "2022"}
@ghana -> has -> @bond_market
@bond_market -> characterized‑by -> @bond_yield {value: 3115bps over US Treasuries}
@ghana -> implements -> @gold_bullion_purchase_program
@gold_bullion_purchase_program -> ordered -> @gold_fields {sell_percent: 20, price: "spot cedi"}
@gold_bullion_purchase_program -> ordered -> @anglogold_ashanti {sell_percent: 20, price: "spot cedi"}
@gold_bullion_purchase_program -> ordered -> @newmont {sell_percent: 20, price: "spot cedi"}
@gold_bullion_purchase_program -> target‑monthly‑fuel‑imports -> "$400 million"
@ghana -> negotiating with -> @bond_holders:concept
@bond_holders -> includes -> [@fidelity, @goldman_sachs, @pimco]
@ghana -> hired advisors -> [@lazard, @global_sovereign_advisory, @hogan_lovells]
@zambia -> defaulted -> @date_2020_11
@zambia -> uses -> @common_framework
@chad -> uses -> @common_framework
@ethiopia -> uses -> @common_framework
@common_framework -> applied‑to -> @zambia
@common_framework -> applied‑to -> @chad
@common_framework -> applied‑to -> @ethiopia
@us -> envoy -> @amos_hochstein
@amos_hochstein -> said -> "energy transition is an opportunity for Africa"
@us -> seeks -> @critical_minerals
@us -> member‑of -> @mineral_security_partnership
@mineral_security_partnership -> members -> ["U.S.", "U.K.", "EU", "G7 countries"]
@uk -> launched -> @critical_minerals_strategy
@eu -> proposed -> @critical_raw_materials_act
@nigeria -> facing -> @debt_service {percentage_of_revenue: 30.6%}
@central_bank_of_nigeria -> policy_rate {value: 16.5%, when: @date_2022_05}
@bank_of_ghana -> policy_rate {value: 24.5%, when: @date_2022_10}
@imf -> approved program -> @imf_program_zambia
@imf -> approved program -> @imf_program_tanzania
@imf -> approved program -> @imf_program_mozambique
@imf -> approved program -> @imf_program_benin
@imf -> approved program -> @imf_program_egypt
@imf -> staff‑visit -> @ghana
@imf -> staff‑visit -> @zambia
@imf -> staff‑visit -> @ethiopia
@imf -> staff‑visit -> @tanzania
@imf -> staff‑visit -> @mozambique
@imf -> staff‑visit -> @benin
@imf -> staff‑visit -> @egypt
@fitch_ratings -> downgraded -> @ghana {new_rating: "B", outlook: "negative"}
@moody_s -> downgraded -> @ghana {new_rating: "C"}
@s_and_p -> downgraded -> @ghana {new_rating: "C"}
@south_africa -> bond_yield {value: ">9%"}
@kenya -> debt_service {percentage_of_revenue: 29%}
@zambia -> debt_to_gdp {value: 133%}
@ghana -> debt_to_gdp {value: 78%}
---
*All entities that are widely known (e.g., @imf, @us, @china, @world_bank, @eu, @gdp, @cpi, @food_security, @climate_change, @oil, @gold, @copper, @energy, @savings, @taxes, @inflation, @interest_rate, @policy_rate, @central_bank, @bank_of_ghana, @central_bank_of_nigeria, @fitch_ratings, @moody_s, @s_and_p, etc.) are referenced without a type definition, per the CHEIMARROS rules.*<!--
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<p>https://www.imf.org/en/Publications/fandd/issues/2022/06/basic-skills-gap-hanushek-woessmann</p><p>https://www.brookings.edu/blog/africa-in-focus/2020/03/12/asias-economic-transformation-lessons-for-africa/</p><p>https://www.cgdev.org/blog/billions-trillions-still-dead-what-next</p><p>https://www.cgdev.org/blog/public-private-infrastructure-finance-sub-saharan-africa-no-sign-upward-trends</p><div data-component-name="Twitter2ToDOM" class="tweet" data-attrs="{"url":"https://twitter.com/JavierBlas/status/1522930056443699201","full_text":"All Nigerian airlines say they will stop flying their domestic routes indefinitely from Monday after spike in jet-fuel prices — emerging markets are getting priced out as refined oil product prices skyrocket | <span class=\"tweet-fake-link\">#OOTT</span> <span class=\"tweet-fake-link\">#nigeria</span> ","username":"JavierBlas","name":"Javier Blas","date":"Sat May 07 13:23:14 +0000 2022","photos":[],"quoted_tweet":{},"retweet_count":140,"like_count":306,"expanded_url":{"url":"https://guardian.ng/news/local-airlines-to-shut-operations-monday-as-jet-a1-hits-n700-litre/","image":"https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/56296992-b9ee-47bc-9cb8-811b1c124298_1200x674.jpeg","title":"Local airlines to shut operations Monday as Jet-A1 hits N700/Litre | The Guardian Nigeria News - Nigeria and World News","description":"Local airlines yesterday notified the Federal Government and the general public of the plan to shut down all scheduled services indefinitely effective next Monday, May 9, over unbearable cost of aviation fuel that currently sells at N700 per litre.","domain":"guardian.ng"},"video_url":null,"belowTheFold":false}"><a class="tweet-link-top" href="https://twitter.com/JavierBlas/status/1522930056443699201" target="_blank"><div class="tweet-header"><img class="tweet-header-avatar" src="https://substackcdn.com/image/twitter_name/w_96/JavierBlas.jpg" alt="Twitter avatar for @JavierBlas"><div class="tweet-header-text"><span class="tweet-author-name">Javier Blas </span><span class="tweet-author-handle">@JavierBlas</span></div></div><div class="tweet-text">All Nigerian airlines say they will stop flying their domestic routes indefinitely from Monday after spike in jet-fuel prices — emerging markets are getting priced out as refined oil product prices skyrocket | <span class="tweet-fake-link">#OOTT</span> <span class="tweet-fake-link">#nigeria</span> </div><a class="expanded-link" href="https://guardian.ng/news/local-airlines-to-shut-operations-monday-as-jet-a1-hits-n700-litre/" target="_blank"><img src="https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/56296992-b9ee-47bc-9cb8-811b1c124298_1200x674.jpeg" class="expanded-link-img"><div class="expanded-link-bottom"><span class="expanded-link-domain">guardian.ng</span><span class="expanded-link-title">Local airlines to shut operations Monday as Jet-A1 hits N700/Litre | The Guardian Nigeria News - Nigeria and World News</span><span class="expanded-link-description">Local airlines yesterday notified the Federal Government and the general public of the plan to shut down all scheduled services indefinitely effective next Monday, May 9, over unbearable cost of aviation fuel that currently sells at N700 per litre.</span></div></a></a><a class="tweet-link-bottom" href="https://twitter.com/JavierBlas/status/1522930056443699201" target="_blank"><div class="tweet-footer"><span class="tweet-date">1:23 PM ∙ May 7, 2022</span><hr><div class="tweet-ufi"><span href="https://twitter.com/JavierBlas/status/1522930056443699201/likes" class="likes"><span class="like-count">306</span>Likes</span><span href="https://twitter.com/JavierBlas/status/1522930056443699201/retweets" class="retweets"><span class="rt-count">140</span>Retweets</span></div></div></a></div><h2>Annual % change in consumer price indices, latest figures available (select a country for details).<br>Each country on the map is sized according to total population in 2018</h2><h2>https://www.theafricareport.com/179868/congo-basin-peatlands-can-presidents-nguesso-ondimba-and-tshisekedi-save-the-worlds-lungs/</h2><p>https://blogs.worldbank.org/africacan/road-recovery-sub-saharan-africa-capitalizing-transformative-opportunities-shifting-fdi</p><p>https://www.worldbank.org/en/news/infographic/2018/03/19/groundswell---preparing-for-internal-climate-migration</p><p>file:///Users/adamtooze/Downloads/WBG_ClimateChange_Final.pdf</p><p>https://www.cgdev.org/blog/eu-africa-relations-delivering-promises-past</p><p>https://www.bmz.de/resource/blob/23708/eadc1eb3296b1c0c27f06bd123428cbd/Materialie%20510_Putting%20the%20Marshall%20Plan%20with%20Africa%20into%20action</p><p>https://au.int/en/agenda2063</p><!--
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<p></p><p>Save</p><p>Share</p><p>Give</p><p>Mining indaba, Africa’s largest mining conference, is an anthropologist’s dream. There are the corporate chief executives: alpha males keen to cut big deals for big rocks. There are the engineers staffing stands in bright corporate attire, resembling darts teams on tour, and the colourful African delegations: Ghanaians draped in kente cloth or Congolese dandies with watches the size of clocks. They are offset by Chinese officials in dark suits and Saudis in white thawbs.</p><p>This year’s event, which took place in Cape Town in February, attracted America’s largest delegation ever, including officials from the White House and departments of state, commerce and energy. Its size reflects America’s hunger for the 50 “<a href="https://www.economist.com/finance-and-economics/2022/03/26/the-transition-to-clean-energy-will-mint-new-commodity-superpowers">critical minerals</a>” it deems essential to reduce carbon emissions and create green jobs in the process. Though America’s search is global, Africa, home to around 30% of the world’s mineral resources, is a crucial part of the hunt. And by pledging to do mining differently—both from how China does it now and how the West has in the past—America says it will help transform African economies. “The energy transition is an opportunity for an Africa transition,” says Amos Hochstein, Joe Biden’s envoy for all things concerning energy security.</p><p>American officials see Africa as helping to solve two problems. The first is a global shortfall in the minerals that will be needed if the world is to meet its climate goals. The International Energy Agency, an official forecaster, reckons that makers of clean-energy technologies will need 40 times more lithium, 25 times more graphite and about 20 times more nickel and cobalt by 2040 than in 2020. Demand for rare-earth elements—metals in the esoteric parts of the periodic table used in everything from wind-turbine magnets to fighter jets—may be seven times higher by the end of the next decade.</p><p>The second problem, at least for the West, is China’s outsized influence on supply chains. China refines 68% of the world’s <a href="https://www.economist.com/finance-and-economics/2022/03/26/the-parallels-between-the-nickel-trading-fiasco-and-the-libor-scandal">nickel</a>, 40% of <a href="https://www.economist.com/finance-and-economics/2021/05/08/the-broader-lesson-from-booming-copper-prices">copper</a>, 59% of <a href="https://www.economist.com/the-economist-explains/2022/06/09/will-there-soon-be-a-surplus-of-lithium">lithium</a> and 73% of cobalt, according to a report in July by the Brookings Institution, an American think-tank. “China has had free rein for 15 years while the rest of the world was sleeping,” says Brian Menell, chief executive of TechMet, a minerals firm. Though China is less dominant in mining, where its firms compete with multinational majors, Western governments are concerned that, without <a href="https://www.economist.com/the-americas/2022/11/15/argentina-could-help-the-world-by-becoming-a-big-lithium-exporter">additional supply</a>, firms will struggle to feed new downstream processing facilities that officials are keen to see built in friendly countries.</p><p>America views <a href="https://www.economist.com/finance-and-economics/2023/02/16/cobalt-a-crucial-battery-material-is-suddenly-superabundant">cobalt</a>, which is used in batteries, as a cautionary tale. In Congo, the source of about<a href="https://www.economist.com/middle-east-and-africa/2022/07/05/how-the-world-depends-on-small-cobalt-miners"> 70% of global production</a>, Chinese entities owned or had stakes in 15 of 19 cobalt-producing mines as of 2020. America’s decision to allow a us firm to sell one of Congo’s largest copper-cobalt mines to a Chinese one in 2020 is seen in Washington as an enormous act of stupidity. It is little comfort that battery-makers are trying to use less cobalt, in part because of concerns about operating in Congo. “We cannot allow China to become an opec of one in critical minerals,” says an American official, referring to the oil cartel.</p><p>It is possible to identify three strands in America’s approach. The first is a multilateral effort involving Western allies. In June Antony Blinken, America’s secretary of state, launched the Minerals Security Partnership, whose 13 members include all the g7 countries and the eu. Many of these countries are also looking to secure more scarce rocks. Britain launched a “critical minerals strategy” in July 2022 and later this month the European Commission will propose a Critical Raw Materials Act.</p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!9sgS!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F179c4ec6-e142-4d56-86e3-eb1503359d7c_608x701.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!9sgS!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F179c4ec6-e142-4d56-86e3-eb1503359d7c_608x701.png 424w, https://substackcdn.com/image/fetch/$s_!9sgS!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F179c4ec6-e142-4d56-86e3-eb1503359d7c_608x701.png 848w, https://substackcdn.com/image/fetch/$s_!9sgS!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F179c4ec6-e142-4d56-86e3-eb1503359d7c_608x701.png 1272w, https://substackcdn.com/image/fetch/$s_!9sgS!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F179c4ec6-e142-4d56-86e3-eb1503359d7c_608x701.png 1456w" sizes="100vw"><img src="https://substack-post-media.s3.amazonaws.com/public/images/179c4ec6-e142-4d56-86e3-eb1503359d7c_608x701.png" width="608" height="701" data-attrs="{"src":"https://substack-post-media.s3.amazonaws.com/public/images/179c4ec6-e142-4d56-86e3-eb1503359d7c_608x701.png","srcNoWatermark":null,"fullscreen":null,"imageSize":null,"height":701,"width":608,"resizeWidth":null,"bytes":null,"alt":"","title":null,"type":null,"href":null,"belowTheFold":true,"topImage":false,"internalRedirect":null,"isProcessing":false,"align":null,"offset":false}" class="sizing-normal" alt="" title="" srcset="https://substackcdn.com/image/fetch/$s_!9sgS!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F179c4ec6-e142-4d56-86e3-eb1503359d7c_608x701.png 424w, https://substackcdn.com/image/fetch/$s_!9sgS!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F179c4ec6-e142-4d56-86e3-eb1503359d7c_608x701.png 848w, https://substackcdn.com/image/fetch/$s_!9sgS!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F179c4ec6-e142-4d56-86e3-eb1503359d7c_608x701.png 1272w, https://substackcdn.com/image/fetch/$s_!9sgS!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F179c4ec6-e142-4d56-86e3-eb1503359d7c_608x701.png 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><div class="pencraft pc-reset icon-container restack-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-refresh-cw"><path d="M3 12a9 9 0 0 1 9-9 9.75 9.75 0 0 1 6.74 2.74L21 8"></path><path d="M21 3v5h-5"></path><path d="M21 12a9 9 0 0 1-9 9 9.75 9.75 0 0 1-6.74-2.74L3 16"></path><path d="M8 16H3v5"></path></svg></div><div class="pencraft pc-reset icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></div></div></div></div></a></figure></div><p>The American-led partnership is a work in progress. But the idea seems to be that member countries will support their own firms, which propose mining projects that will meet high environmental, social and governance (esg) standards. This support might include lobbying by diplomats in the country where the mine will be built, finance for the project, or help in attracting private investment to it. The partnership is not restricted to projects in Africa, but representatives from Congo, Mozambique, Namibia, Tanzania and Zambia attended a meeting to discuss it in New York last year. Convening the session, Mr Blinken highlighted a graphite mine in Mozambique, whose owner has received a loan from the American government, that ostensibly reduces the risk of conflict in the area by providing jobs to locals. Its output will be sent for processing in Louisiana.</p><p>A second strand in America’s approach involves its development agencies “de-risking” projects as they have done in, say, agriculture or the power sector. As well as the us Export-Import Bank, which offers trade-financing, there is the International Development Finance Corporation (dfc). In 2018 the Trump administration doubled the dfc’s (or rather, its predecessor’s) lending cap to $60bn and changed the rules so it can take equity stakes in firms, too. Though dfc only has one direct investment in mining at present (Mr Menell’s TechMet), it is keen to add more.</p><p>The third element is more active diplomacy in Africa. Since Mr Biden hosted more than 40 African leaders in Washington in December, several senior officials including Janet Yellen, the treasury secretary, have visited the continent. Mr Biden is expected to visit this year. America has more interests in Africa than just minerals. But it was notable that Mr Hochstein, who spent much of 2022 managing the fallout from Russia’s invasion of Ukraine on oil and gas markets, attended Indaba.</p><p>An early diplomatic success is the Lobito corridor. The idea of revamping the railway that could take copper from Congo and Zambia to Angola’s Lobito port has been mooted for decades. It would be a much quicker route than the typical journey by road to the South African port of Durban. But progress stalled until the accession of new presidents in the three relevant African countries (João Lourenço in Angola in 2017, Félix Tshisekedi in Congo in 2019 and Hakainde Hichilema in Zambia in 2021). The trio have better relations than some of their predecessors with America and with each other—and are less China-leaning. Last year a Western-led consortium beat Chinese firms to the contract to rebuild the railway. American diplomats hope it will make investment in the three countries more attractive and create a new route to processing plants outside China.</p><p>Another potential success is a memorandum of understanding signed by America, Congo and Zambia in January. America says it will help Africa’s two largest copper exporters do more than just sell the metal in its elemental state. Under it, America agreed to help the two African countries build supply chains to process their raw minerals into battery precursors for electric vehicles.</p><p>African politicians are giving the American push a cautious welcome. Situmbeko Musokotwane, Zambia’s finance minister, says he knows that Western countries cannot boss their own firms about. But “they can still be helpful by talking down the perceived risks of Africa.”</p><p>Small mining firms are responding to the West’s signals. An Australia-based executive who has sold mines to Chinese firms says he is now exploring projects in countries which are on good terms with America, such as Namibia and Zambia. “In five years the West will be really desperate. And we want to be ready,” he says.</p><p>Other small miners hope that the West’s hunger for esg-friendly mineral projects will make them more attractive investment propositions. Many cite the example of Lifezone Metals, a firm set to list in New York, that plans to extract nickel from a planned mine in Tanzania using a technique that is much less carbon-intensive than the usual method of smelting it. Last year it won the backing of bhp Group—the first significant investment in Africa by the world’s biggest miner in several years. The Tanzanian government, for its part, sees the nickel project as the start of more processing of raw materials in the country.</p><p>It is unclear, though, whether the West’s geostrategic ambitions will translate into a massive increase in investment. Capital expenditure by 20 large miners is forecast to rise by about 12% in 2023, according to Mining Technology, an industry tracker. This is below analysts’ estimates of what is required for the world to meet climate goals. Duncan Wanblad, the ceo of Anglo American, says that there are too few bankable projects in development. “I can’t get the maths right,” he sighs. Over the past 20 years “the only big capital deployment has been the Chinese ecosystem,” argues Benedikt Sobotka, the ceo of Eurasian Resources Group. Part of the problem remains perception, argues a consultant to the mining industry. When American investors “think of mining in Africa, they still think of cobalt, Congo and child labour”.</p><h2><strong>Prospecting for balderdash</strong></h2><p>“The American intention is real,” adds another executive, “but they don’t know what they’re doing.” African priorities are often not American priorities. “My worry is that half the American delegation believes their own bullshit,” says another ceo, adding: “It is not enough just to be America.”</p><p>Sameh Shenouda, the executive director of the Africa Finance Corporation, a pan-African fund based in Nigeria, welcomes renewed Western interest in African mining, but he has two worries. The first is that projects will take too long to get started because of American bureaucracy. The second is that America’s push to ally esg-friendly investing with mining would not endure under a Republican president.</p><p>American officials sometimes come across as patronising when they warn Africans against doing deals with China. “The Americans are completely clueless about what goes on in our politics,” says a former adviser to an African president. China’s success in Africa, he posits, is because their firms can get projects done in time for the next election.</p><p>Many African governments would like more American involvement in the continent but are in no rush to ditch China. “Zambia takes countries case by case”, says Paul Kabuswe, Zambia’s minister of mines. “We’re not going to say that this country is not working with us.” One reason may be that greater competition could allow African governments to strike better deals. After all, says Mr Kabuswe: “Zambia has been mining for decades and has very little to show for it.”</p><p>https://www.economist.com/middle-east-and-africa/2023/02/28/how-america-plans-to-break-chinas-grip-on-african-minerals</p><p></p><p>https://www.fpri.org/article/2022/12/us-africa-leaders-summit-new-beginning-or-old-wine-in-a-new-bottle/</p><p>https://www.csis.org/analysis/beyond-2025-future-african-growth-and-opportunity-act</p><p>https://www.just-style.com/news/us-commits-to-boosting-trade-with-africa/</p><p></p><p>https://www.mckinsey.com/capabilities/operations/our-insights/solving-africas-infrastructure-paradox</p><p></p><p>As David Pilling <a href="https://www.ft.com/content/bc086fd8-12c5-4a15-afc2-734be4443aac">writes about Nigeria in the </a><em><a href="https://www.ft.com/content/bc086fd8-12c5-4a15-afc2-734be4443aac">FT</a></em>:</p><p>In this, the state does not disappoint. Of the country’s 210mn people, some 90mn have no access to electricity. About 20mn of Nigeria’s children are out of school. With no social safety net, some 40 per cent of Nigerians live in absolute poverty, defined as earning less than $1.90 a day. Nigeria has a semi-decent road network, at least between big cities such as Lagos, Ibadan, Port Harcourt, Abuja, Kano and Kaduna. But security is so poor that many people are too afraid to use it. Nigeria’s security forces, mostly underpaid and under-equipped, are in a war of attrition against gangs of bandits, separatists, extortionists, kidnappers and terrorists. The state of insecurity suggests they are losing. It is easy to see how Nigeria got here. For half a century, it has been pumping oil in quantities large enough to pay for a small elite, but not large enough to raise everyone’s living standards significantly. According to calculations by Stefan Dercon, an Oxford professor, in 2010, when oil prices were riding high, Nigeria made $54bn from oil and gas, of which $38bn ended up in federal government hands. That equates to only $340 per capita against $1,206 in Algeria, $2,965 in Gabon and a hefty $7,477 in Saudi Arabia. In those circumstances, the name of the game becomes getting hold of oil rent. With almost no money left over to fund public services, those who can afford it simply opt out. They generate their own energy. They send their kids to private school at home (or preferably abroad). They go to private hospitals. Even Muhammadu Buhari, president since 2015, spent much of his first four-year term in London seeking medical care that was presumably not available at home. With nothing to gain in return, it is hardly surprising that those who can afford to pay taxes are reluctant to do so. The consequences are corrosive. The rule becomes everyone for themselves. At its extreme, this turns citizens and organisations into extortionists — the mirror image of the extortionary state. One of Nigeria’s growth industries is kidnapping. In the year to June 2022, according to SBM Intelligence, a security consultancy, 3,420 people were abducted, with a further 564 killed in incidents associated with abduction. Families see little point in contacting police and many negotiate directly with kidnappers, paying in total hundreds of millions of naira in ransom. Oil theft is another extortionary racket. This month, the Nigerian National Petroleum Company estimated that 400,000 barrels of oil were being stolen every day. Nigeria has an Opec quota of 1.8mn barrels but is only able to meet about 1.13mn, the lowest in 50 years. In the Delta states where most onshore oil is pumped, the government regularly pays off the extortionists who blow up pipelines or employs them as poachers turned gamekeepers. State refineries have not worked properly for years. But there has been a proliferation of illegal refineries processing stolen oil. In April, more than 100 people were killed when one blew up. Next year, Nigeria will get a new president and a new legislature after elections in February and March. In Abuja and Lagos, the chatter is of little else. Yet unless the next government can rewrite the social contract between the state and its citizens, it doesn’t much matter who wins. If a state cannot make its presence felt through even mildly effective tax and spending, it will not only be weak, but part of the extortionist problem. Unless the Nigerian state can somehow change course, it is hard to see how the centre can hold.</p><p></p><p>https://www.ft.com/content/bc086fd8-12c5-4a15-afc2-734be4443aac</p><p>As Fed interest rates surge it was clear that it was going to hurt.</p><p>It doesnt hurt everywhere equally. It is always a matter of idiosyncratic factors. </p><p>There were reasons why Sri Lanka went first and Zambia and Chad. </p><p>Ethiopia applied under Common Framework. </p><p>By November Ghana was in deep trouble. And the Africa Report was also worrying about <strong>Kenya.</strong></p><p>Ghana, Kenya and Ethiopia are three of the most important sub-Saharan African success stories. </p><p>Nigeria notionally the largest economy is in chronic difficulties. </p><p>South Africa too is in trouble. </p><p>Zambia defaulted on its debts in late 2020 and Mali in early 2022. Now larger African countries are viewed as unlikely to be able to make $21.5 billion in repayments of their Eurobonds, excluding the cost of servicing these loans. This includes Ghana, which owes more than $4 billion to bondholders between June 2022 and May 2027, Kenya, with a bond repayment bill of almost $3 billion for the next five years, and Ethiopia with a $1 billion Eurobond due in 2024, amid ongoing conflicts affecting several parts of the country. The ability to pay of Nigeria, which owes almost $2 billion in Eurobond repayments, is also in doubt.</p><p>https://www.wsws.org/en/articles/2022/09/20/bhus-s20.html</p><p></p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!L4dn!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fdd6194a1-33d5-48d8-bb0b-9eb7038f05a4_2178x1108.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!L4dn!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fdd6194a1-33d5-48d8-bb0b-9eb7038f05a4_2178x1108.png 424w, 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data-attrs="{"src":"https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/dd6194a1-33d5-48d8-bb0b-9eb7038f05a4_2178x1108.png","srcNoWatermark":null,"fullscreen":null,"imageSize":null,"height":741,"width":1456,"resizeWidth":null,"bytes":299149,"alt":null,"title":null,"type":"image/png","href":null,"belowTheFold":true,"topImage":false,"internalRedirect":null,"isProcessing":false,"align":null,"offset":false}" class="sizing-normal" alt="" srcset="https://substackcdn.com/image/fetch/$s_!L4dn!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fdd6194a1-33d5-48d8-bb0b-9eb7038f05a4_2178x1108.png 424w, https://substackcdn.com/image/fetch/$s_!L4dn!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fdd6194a1-33d5-48d8-bb0b-9eb7038f05a4_2178x1108.png 848w, https://substackcdn.com/image/fetch/$s_!L4dn!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fdd6194a1-33d5-48d8-bb0b-9eb7038f05a4_2178x1108.png 1272w, https://substackcdn.com/image/fetch/$s_!L4dn!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fdd6194a1-33d5-48d8-bb0b-9eb7038f05a4_2178x1108.png 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><div class="pencraft pc-reset icon-container restack-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-refresh-cw"><path d="M3 12a9 9 0 0 1 9-9 9.75 9.75 0 0 1 6.74 2.74L21 8"></path><path d="M21 3v5h-5"></path><path d="M21 12a9 9 0 0 1-9 9 9.75 9.75 0 0 1-6.74-2.74L3 16"></path><path d="M8 16H3v5"></path></svg></div><div class="pencraft pc-reset icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></div></div></div></div></a></figure></div><p>https://developmentreimagined.com/2022/09/26/africandebtcrisisrealstory/</p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!ORer!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fa99bef50-422b-4e13-8e09-344a577ced26_1754x1068.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!ORer!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fa99bef50-422b-4e13-8e09-344a577ced26_1754x1068.png 424w, https://substackcdn.com/image/fetch/$s_!ORer!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fa99bef50-422b-4e13-8e09-344a577ced26_1754x1068.png 848w, 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srcset="https://substackcdn.com/image/fetch/$s_!bkrB!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F9021a823-bb13-405d-ae54-bf8fea9490cf_1800x1294.png 424w, https://substackcdn.com/image/fetch/$s_!bkrB!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F9021a823-bb13-405d-ae54-bf8fea9490cf_1800x1294.png 848w, https://substackcdn.com/image/fetch/$s_!bkrB!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F9021a823-bb13-405d-ae54-bf8fea9490cf_1800x1294.png 1272w, https://substackcdn.com/image/fetch/$s_!bkrB!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F9021a823-bb13-405d-ae54-bf8fea9490cf_1800x1294.png 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><div class="pencraft pc-reset icon-container restack-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-refresh-cw"><path d="M3 12a9 9 0 0 1 9-9 9.75 9.75 0 0 1 6.74 2.74L21 8"></path><path d="M21 3v5h-5"></path><path d="M21 12a9 9 0 0 1-9 9 9.75 9.75 0 0 1-6.74-2.74L3 16"></path><path d="M8 16H3v5"></path></svg></div><div class="pencraft pc-reset icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></div></div></div></div></a></figure></div><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!IA3i!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fda1f862d-2c24-490d-96ee-4fbd46234817_1770x590.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!IA3i!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fda1f862d-2c24-490d-96ee-4fbd46234817_1770x590.png 424w, https://substackcdn.com/image/fetch/$s_!IA3i!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fda1f862d-2c24-490d-96ee-4fbd46234817_1770x590.png 848w, https://substackcdn.com/image/fetch/$s_!IA3i!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fda1f862d-2c24-490d-96ee-4fbd46234817_1770x590.png 1272w, https://substackcdn.com/image/fetch/$s_!IA3i!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fda1f862d-2c24-490d-96ee-4fbd46234817_1770x590.png 1456w" sizes="100vw"><img src="https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/da1f862d-2c24-490d-96ee-4fbd46234817_1770x590.png" width="1456" height="485" data-attrs="{"src":"https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/da1f862d-2c24-490d-96ee-4fbd46234817_1770x590.png","srcNoWatermark":null,"fullscreen":null,"imageSize":null,"height":485,"width":1456,"resizeWidth":null,"bytes":174118,"alt":null,"title":null,"type":"image/png","href":null,"belowTheFold":true,"topImage":false,"internalRedirect":null,"isProcessing":false,"align":null,"offset":false}" class="sizing-normal" alt="" srcset="https://substackcdn.com/image/fetch/$s_!IA3i!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fda1f862d-2c24-490d-96ee-4fbd46234817_1770x590.png 424w, https://substackcdn.com/image/fetch/$s_!IA3i!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fda1f862d-2c24-490d-96ee-4fbd46234817_1770x590.png 848w, https://substackcdn.com/image/fetch/$s_!IA3i!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fda1f862d-2c24-490d-96ee-4fbd46234817_1770x590.png 1272w, https://substackcdn.com/image/fetch/$s_!IA3i!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fda1f862d-2c24-490d-96ee-4fbd46234817_1770x590.png 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><div class="pencraft pc-reset icon-container restack-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-refresh-cw"><path d="M3 12a9 9 0 0 1 9-9 9.75 9.75 0 0 1 6.74 2.74L21 8"></path><path d="M21 3v5h-5"></path><path d="M21 12a9 9 0 0 1-9 9 9.75 9.75 0 0 1-6.74-2.74L3 16"></path><path d="M8 16H3v5"></path></svg></div><div class="pencraft pc-reset icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></div></div></div></div></a></figure></div><p>https://www.theafricareport.com/204115/is-africa-really-sick-with-debt-less-alarmist-views-are-emerging/</p><p>https://oecd-development-matters.org/2022/11/24/why-todays-debt-crisis-requires-a-different-kind-of-thinking/</p><p></p><p>By</p><p><a href="https://www.bloomberg.com/authors/AVsaGSiosYs/neil-munshi">Neil Munshi</a></p><p>October 14, 2022 at 6:29 AM EDT</p><h2>Share this article</h2><p>New</p><p>Gift this article</p><p>You're reading the Next Africa newsletter.Sign up here to get it in your inbox weekly.Sign up to this newsletter</p><p><em>Welcome to Next Africa, a weekly newsletter on where the continent stands now — and where it’s headed.</em></p><p>Nigeria has joined a growing list of nations <a href="https://www.bloomberg.com/news/articles/2022-10-12/nigeria-exploring-restructuring-some-debt-finance-minister-says?sref=OOcVchU0">struggling</a> to deal with choking debt.</p><p>Plunging oil production and soaring debt-service costs — projected to reach 102% of revenue this year — have left Africa’s biggest economy seeking ways to handle its liabilities.</p><p>The government has appointed a consultant to assess how it can reprofile its debt and “to stretch out the repayments to longer periods,” Finance Minister Zainab Ahmed said in <a href="https://www.bloomberg.com/news/videos/2022-10-12/nigeria-finance-minister-on-possible-debt-restructuring-video?sref=OOcVchU0">an interview</a> with Bloomberg TV.</p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!GAO1!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F06013ec5-31dc-481a-bed7-18821d1b230a_600x399.jpeg" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!GAO1!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F06013ec5-31dc-481a-bed7-18821d1b230a_600x399.jpeg 424w, https://substackcdn.com/image/fetch/$s_!GAO1!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F06013ec5-31dc-481a-bed7-18821d1b230a_600x399.jpeg 848w, https://substackcdn.com/image/fetch/$s_!GAO1!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F06013ec5-31dc-481a-bed7-18821d1b230a_600x399.jpeg 1272w, https://substackcdn.com/image/fetch/$s_!GAO1!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F06013ec5-31dc-481a-bed7-18821d1b230a_600x399.jpeg 1456w" sizes="100vw"><img src="https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/06013ec5-31dc-481a-bed7-18821d1b230a_600x399.jpeg" width="600" height="399" data-attrs="{"src":"https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/06013ec5-31dc-481a-bed7-18821d1b230a_600x399.jpeg","srcNoWatermark":null,"fullscreen":null,"imageSize":null,"height":399,"width":600,"resizeWidth":null,"bytes":null,"alt":"Key Speakers At Bloomberg Emerging + Frontier Forum 2019","title":null,"type":null,"href":null,"belowTheFold":true,"topImage":false,"internalRedirect":null,"isProcessing":false,"align":null,"offset":false}" class="sizing-normal" alt="Key Speakers At Bloomberg Emerging + Frontier Forum 2019" title="Key Speakers At Bloomberg Emerging + Frontier Forum 2019" srcset="https://substackcdn.com/image/fetch/$s_!GAO1!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F06013ec5-31dc-481a-bed7-18821d1b230a_600x399.jpeg 424w, https://substackcdn.com/image/fetch/$s_!GAO1!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F06013ec5-31dc-481a-bed7-18821d1b230a_600x399.jpeg 848w, https://substackcdn.com/image/fetch/$s_!GAO1!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F06013ec5-31dc-481a-bed7-18821d1b230a_600x399.jpeg 1272w, https://substackcdn.com/image/fetch/$s_!GAO1!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F06013ec5-31dc-481a-bed7-18821d1b230a_600x399.jpeg 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><div class="pencraft pc-reset icon-container restack-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-refresh-cw"><path d="M3 12a9 9 0 0 1 9-9 9.75 9.75 0 0 1 6.74 2.74L21 8"></path><path d="M21 3v5h-5"></path><path d="M21 12a9 9 0 0 1-9 9 9.75 9.75 0 0 1-6.74-2.74L3 16"></path><path d="M8 16H3v5"></path></svg></div><div class="pencraft pc-reset icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></div></div></div></div></a><figcaption class="image-caption">Zainab Ahmed.Photographer: Luke MacGregor/Bloomberg</figcaption></figure></div><p>Nigeria isn’t alone: Zambia, Ethiopia and Chad are seeking to restructure, while Ghana is scrambling to find ways to rework its obligations. And global factors including spiraling food prices sparked by Russia’s invasion of Ukraine have strained economies across the world.</p><p>Yet, Nigeria’s predicament is also much of its own making. </p><p>Leaders have spoken for years about removing an unsustainable gasoline subsidy and still the support is set to wipe about $12 billion from state coffers this year — money that would go a long way to pay for projects it borrows to fund.</p><p>After failing to bank billions of dollars in oil revenues during decades as the continent’s biggest crude producer (Nigeria has almost no refining capacity), the government can’t enjoy the windfall from higher prices with production now <a href="https://www.bloomberg.com/news/newsletters/2022-09-02/resource-curse-sees-oil-rally-bypassing-nigeria?sref=OOcVchU0">less than half</a> what it was in early 2020. </p><p>Investors <a href="https://www.bloomberg.com/news/articles/2022-10-13/dollar-bonds-naira-weaken-on-nigeria-s-debt-revamp-proposal?sref=OOcVchU0">reacted swiftly</a> to the news. Six of its bonds are now in what’s typically considered distressed territory, although prices recovered some ground after the minister stressed the all bondholders’ money is safe.</p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!dKE8!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F5995f8e2-db64-48e4-aae1-a2d76a1498d4_600x336.jpeg" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!dKE8!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F5995f8e2-db64-48e4-aae1-a2d76a1498d4_600x336.jpeg 424w, https://substackcdn.com/image/fetch/$s_!dKE8!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F5995f8e2-db64-48e4-aae1-a2d76a1498d4_600x336.jpeg 848w, https://substackcdn.com/image/fetch/$s_!dKE8!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F5995f8e2-db64-48e4-aae1-a2d76a1498d4_600x336.jpeg 1272w, https://substackcdn.com/image/fetch/$s_!dKE8!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F5995f8e2-db64-48e4-aae1-a2d76a1498d4_600x336.jpeg 1456w" sizes="100vw"><img src="https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/5995f8e2-db64-48e4-aae1-a2d76a1498d4_600x336.jpeg" width="600" height="336" data-attrs="{"src":"https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/5995f8e2-db64-48e4-aae1-a2d76a1498d4_600x336.jpeg","srcNoWatermark":null,"fullscreen":null,"imageSize":null,"height":336,"width":600,"resizeWidth":null,"bytes":null,"alt":"relates to Heavy Debt Load Chokes Africa’s Biggest Economy","title":null,"type":null,"href":null,"belowTheFold":true,"topImage":false,"internalRedirect":null,"isProcessing":false,"align":null,"offset":false}" class="sizing-normal" alt="relates to Heavy Debt Load Chokes Africa’s Biggest Economy" title="relates to Heavy Debt Load Chokes Africa’s Biggest Economy" srcset="https://substackcdn.com/image/fetch/$s_!dKE8!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F5995f8e2-db64-48e4-aae1-a2d76a1498d4_600x336.jpeg 424w, https://substackcdn.com/image/fetch/$s_!dKE8!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F5995f8e2-db64-48e4-aae1-a2d76a1498d4_600x336.jpeg 848w, https://substackcdn.com/image/fetch/$s_!dKE8!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F5995f8e2-db64-48e4-aae1-a2d76a1498d4_600x336.jpeg 1272w, https://substackcdn.com/image/fetch/$s_!dKE8!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F5995f8e2-db64-48e4-aae1-a2d76a1498d4_600x336.jpeg 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><div class="pencraft pc-reset icon-container restack-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-refresh-cw"><path d="M3 12a9 9 0 0 1 9-9 9.75 9.75 0 0 1 6.74 2.74L21 8"></path><path d="M21 3v5h-5"></path><path d="M21 12a9 9 0 0 1-9 9 9.75 9.75 0 0 1-6.74-2.74L3 16"></path><path d="M8 16H3v5"></path></svg></div><div class="pencraft pc-reset icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></div></div></div></div></a></figure></div><p>While Situmbeko Musokotwane, Zambia’s finance minister, argued in a <a href="https://www.bloomberg.com/news/articles/2022-10-12/zambia-finance-chief-to-africa-don-t-hesitate-to-rework-debts?sref=OOcVchU0">separate interview</a> that other African nations should follow its lead and move quickly to restructure debt, trying to reschedule its payments comes at a difficult time for Nigeria.</p><p>With just four months to go until Nigerian elections, the move is unlikely to do much more than push the country's problems onto the next administration.</p><p>https://www.bloomberg.com/news/newsletters/2022-10-14/heavy-debt-load-chokes-africa-s-biggest-economy?sref=wOrDP8KX</p><p>https://developmentreimagined.com/2022/09/26/africandebtcrisisrealstory/</p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!OidP!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fb6861b72-361d-4d45-a087-453aa4ad7d95_1256x1024.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!OidP!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fb6861b72-361d-4d45-a087-453aa4ad7d95_1256x1024.png 424w, https://substackcdn.com/image/fetch/$s_!OidP!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fb6861b72-361d-4d45-a087-453aa4ad7d95_1256x1024.png 848w, https://substackcdn.com/image/fetch/$s_!OidP!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fb6861b72-361d-4d45-a087-453aa4ad7d95_1256x1024.png 1272w, https://substackcdn.com/image/fetch/$s_!OidP!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fb6861b72-361d-4d45-a087-453aa4ad7d95_1256x1024.png 1456w" sizes="100vw"><img src="https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/b6861b72-361d-4d45-a087-453aa4ad7d95_1256x1024.png" width="1256" height="1024" data-attrs="{"src":"https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/b6861b72-361d-4d45-a087-453aa4ad7d95_1256x1024.png","srcNoWatermark":null,"fullscreen":null,"imageSize":null,"height":1024,"width":1256,"resizeWidth":null,"bytes":190619,"alt":null,"title":null,"type":"image/png","href":null,"belowTheFold":true,"topImage":false,"internalRedirect":null,"isProcessing":false,"align":null,"offset":false}" class="sizing-normal" alt="" srcset="https://substackcdn.com/image/fetch/$s_!OidP!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fb6861b72-361d-4d45-a087-453aa4ad7d95_1256x1024.png 424w, https://substackcdn.com/image/fetch/$s_!OidP!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fb6861b72-361d-4d45-a087-453aa4ad7d95_1256x1024.png 848w, https://substackcdn.com/image/fetch/$s_!OidP!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fb6861b72-361d-4d45-a087-453aa4ad7d95_1256x1024.png 1272w, https://substackcdn.com/image/fetch/$s_!OidP!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fb6861b72-361d-4d45-a087-453aa4ad7d95_1256x1024.png 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><div class="pencraft pc-reset icon-container restack-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-refresh-cw"><path d="M3 12a9 9 0 0 1 9-9 9.75 9.75 0 0 1 6.74 2.74L21 8"></path><path d="M21 3v5h-5"></path><path d="M21 12a9 9 0 0 1-9 9 9.75 9.75 0 0 1-6.74-2.74L3 16"></path><path d="M8 16H3v5"></path></svg></div><div class="pencraft pc-reset icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></div></div></div></div></a></figure></div><p>https://debtjustice.org.uk/wp-content/uploads/2022/07/Who-African-governments-debt-is-owed-to_Media-Briefing_07.22.pdf</p><p>Of course, there are ‘winners’ from the oil and gas price shock. Commodity exporters have enjoyed a windfall from fossil fuel revenues, averaging 2.1% of GDP in the first half of 2022. Countries with gas reserves such as Mozambique, Tanzania and Uganda anticipate a boom in natural gas exports. Angola has had its credit rating upgraded, while Nigeria's Bank of Industry and Federal Government issued Eurobonds in 2022 at only moderately increased interest rates.<br><br>For commodity importers, however, fiscal balances now average -6.1% of GDP and have led to credit downgrades and collapsing currencies. External debt servicing costs have surged from an average of 4% of exports before the pandemic to 11% by mid-2022.<br><br>Today, seven countries in the region have fallen into debt distress and a further 15 are at high risk of distress. Some of the leading economies, such as Kenya, are now on the ‘high risk’ list.</p><p>https://odi.org/en/insights/rising-interest-rates-are-threatening-debt-sustainability-in-africa/</p><p></p><p>African countries halted the issuance of dollar-denominated notes and Eurobonds due to tightening global financial conditions.</p><p>High-interest rates and yields have caused certain regional sovereigns to switch focus to domestic and multilateral borrowing.</p><p>Only three African countries—Angola, Nigeria and South Africa—issued Eurobonds since the start of the Russia-Ukraine war. And each country has deferred the issuance of foreign currency denominated notes since April. Other countries such as Kenya, which initially lined up a $1 billion issuance in June, are now making an about-face on dollar and euro issuances.</p><p>The average emerging-market (EM) dollar yield has surged to over 9%, rising 433bps this year, Tellimer chief economist Stuart Culverhouse explains, citing how EMs across Africa are finding current borrowing costs too prohibitive. “There has been very little private investment due to the external environment. Instead, African sovereign borrowers turned more to official sector creditors in response (including multilaterals and/or bilaterals), domestic borrowing, policy tightening, or in some cases restructuring,” Culverhouse says. There were no foreign-denominated long-term paper issuances for African countries during the third quarter.</p><p>Nigeria and Kenya are struggling to prop up their currencies against a stronger US dollar. Ghana has also been hard-hit, given the surging yields on its Eurobonds and massive sell-off of its cedi currency. “African countries have stopped issuing international bonds because bond yields have soared since the start of the Russia-Ukraine war,” Fitch Solutions senior analyst Gianmarco Capati says. “Unfavourable market conditions for emerging markets will keep African governments reluctant to issue new Eurobond debt until the second half of 2023 or 2024.”</p><p>A strong dollar is inflating foreign-currency debt payments, Capati explains, reducing appetite for new foreign-currency debt. It is also “reflective of capital flows out of emerging markets,” he adds, thereby raising borrowing costs for African nations.</p><p>The IMF has approved financial programs for Zambia, Tanzania, Mozambique and Benin. Ghana is also negotiating a new IMF lending facility while Egypt presses for a similar bailout.</p><p>https://www.gfmag.com/magazine/november-2022/africa-issuances-come-halt</p><p></p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!Wb35!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fd43f2338-2dec-460b-bccb-4bc85dc4e15f_606x576.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!Wb35!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fd43f2338-2dec-460b-bccb-4bc85dc4e15f_606x576.png 424w, https://substackcdn.com/image/fetch/$s_!Wb35!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fd43f2338-2dec-460b-bccb-4bc85dc4e15f_606x576.png 848w, https://substackcdn.com/image/fetch/$s_!Wb35!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fd43f2338-2dec-460b-bccb-4bc85dc4e15f_606x576.png 1272w, https://substackcdn.com/image/fetch/$s_!Wb35!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fd43f2338-2dec-460b-bccb-4bc85dc4e15f_606x576.png 1456w" sizes="100vw"><img src="https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/d43f2338-2dec-460b-bccb-4bc85dc4e15f_606x576.png" width="606" height="576" data-attrs="{"src":"https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/d43f2338-2dec-460b-bccb-4bc85dc4e15f_606x576.png","srcNoWatermark":null,"fullscreen":null,"imageSize":null,"height":576,"width":606,"resizeWidth":null,"bytes":71295,"alt":null,"title":null,"type":"image/png","href":null,"belowTheFold":true,"topImage":false,"internalRedirect":null,"isProcessing":false,"align":null,"offset":false}" class="sizing-normal" alt="" srcset="https://substackcdn.com/image/fetch/$s_!Wb35!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fd43f2338-2dec-460b-bccb-4bc85dc4e15f_606x576.png 424w, https://substackcdn.com/image/fetch/$s_!Wb35!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fd43f2338-2dec-460b-bccb-4bc85dc4e15f_606x576.png 848w, https://substackcdn.com/image/fetch/$s_!Wb35!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fd43f2338-2dec-460b-bccb-4bc85dc4e15f_606x576.png 1272w, https://substackcdn.com/image/fetch/$s_!Wb35!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fd43f2338-2dec-460b-bccb-4bc85dc4e15f_606x576.png 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><div class="pencraft pc-reset icon-container restack-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-refresh-cw"><path d="M3 12a9 9 0 0 1 9-9 9.75 9.75 0 0 1 6.74 2.74L21 8"></path><path d="M21 3v5h-5"></path><path d="M21 12a9 9 0 0 1-9 9 9.75 9.75 0 0 1-6.74-2.74L3 16"></path><path d="M8 16H3v5"></path></svg></div><div class="pencraft pc-reset icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></div></div></div></div></a></figure></div><p>By the end of 2022, 123 million people or 12 percent of sub-Saharan Africa’s population are expected to face acute food insecurity (two-thirds of the worldwide total), one-third of which have become acutely food insecure since the start of the pandemic. And of these, a large proportion are children in circumstances in which chronic hunger can permanently curtail future health and prospects. The rapid increase in food insecurity over the past two years is mainly due to (1) the fallout from the pandemic and the recent war in Ukraine, (2) a worsening security situation in some parts of the region, (3) a four-season drought in the Horn of Africa, and (4) other climate shocks (Angola, Madagascar). Areas of particular concern include the Democratic Republic of the Congo, Ethiopia, Nigeria, South Sudan, some parts of Kenya, and countries in the Sahel. The World Food Programme has identified the drought in the Horn of Africa as the world’s worst food emergency in 2022. In addition to local factors (such as climate events or local conflicts), food security is shaped strongly by global food prices. Food accounts for almost 40 percent of sub-Saharan Africa’s consumption basket, and many countries are net importers of key staples (corn, rice, wheat). For some of these items, international prices have doubled since early 2020, while fuel and fertilizer prices have reached as much as triple, adding to transport costs and weighing on harvests. Moreover, climate-related events are worsening, which will further undermine food security regionwide (Baptista and others 2022).</p><p>https://www.imf.org/en/Publications/REO/SSA/Issues/2022/10/14/regional-economic-outlook-for-sub-saharan-africa-october-2022</p><p></p><p>Countries with high interest payments may be the most exposed. According to Moody’s, <strong>Ghana</strong>’s interest payments make up 57.7% of government revenue, second in the world only to <strong>Sri Lanka</strong> on 72.8%. The other African countries in the global top 10 are <strong>Egypt</strong> on 45.6%, <strong>Nigeria</strong> on 30.6%, <strong>Kenya</strong> on 29.0% and <strong>Uganda</strong> on 21.6%.</p><p>https://www.theafricareport.com/248487/nigeria-ghana-exposed-by-global-rate-hikes-south-africa-can-weather-storm-say-economists/</p><p></p><p><strong>Over the last 15 years, Africa has become integrated into the global economic fold. As a result, it is no longer immune to volatility in international markets; while the continent was largely cushioned from the fallout of the Global Financial Crisis in 2008, over the last 12 months, rising inflation, interest rate hikes, and broken supply chains, which have wreaked havoc in developed economies, are now taking their toll on Africa. </strong></p><p>Layered on top of the economic crisis is a climate emergency, which has caused drought, flooding, and conflict across the continent. The acceleration of climate change has hit Africa hard, exacerbating the current cost of living crisis and plunging thousands of people into poverty.</p><p>Cash-strapped economies have more or less been shut out of global international markets, with yields too high for most to consider borrowing this way. Mounting debt obligations during this current economic crisis will only put more pressure on governments as they tackle the cost of living crisis and climate change.</p><p><strong>READ MORE <a href="https://www.theafricareport.com/247986/imf-world-bank-finance-officials-will-they-tame-food-price-hikes/">IMF, World Bank, finance officials: Can they tame food price hikes?</a></strong></p><p>With so much uncertainty, and dwindling portfolio flows to the continent, the role of multilateral agencies to help prop up the developing economies of Africa is needed now more than ever before. Deals, however, will take time and negotiations require compromise.</p><p>In an exclusive interview, Abebe Aemro Selassie, director of the African Department at the IMF sets out the institution’s plan to temper the current crisis and provides a blueprint for Africa’s future growth.</p><p><strong>Today, it is no secret that African countries have very high debt levels, but with interest rates rising, it’s increasingly difficult to get financing. What’s the call to action for African governments?</strong></p><p><strong>Abebe Selassie:</strong> I think the first point to make is that this higher cost of funding is not unique to Africa, but our countries are facing it with much more acuity. It’s a global phenomenon, rising inflation. Investors are not wanting to take too much risk as there are even more uncertainties.</p><p><strong>READ MORE <a href="https://www.theafricareport.com/247999/debt-stress-climate-change-inflation-will-african-countries-weather-the-economic-storm/">Debt stress, climate change, inflation...Will African countries weather the economic storm?</a></strong></p><p>[…] in the face of this, what are the options for our countries? For the last couple of years, the fiscal policy stance that countries have been doing has been very supportive. In most countries, the stance has remained on a supportive footing. Given the elevated debt levels, but more generally, the higher costs of financing, I think there was always a need to ease back from that position.</p><p>Africa Insight</p><p>Wake up to the essential with the Editor's picks.</p><p>Sign up</p><p>Also receive offers from The Africa Report</p><p>Also receive offers from The Africa Report's partners</p><p>Secondly, recourse to a greater reliance on concessional financing is going to be important. And then thirdly there is still a lot of scope for revenue mobilisation. Over the last 14 to 15 years in the region of high growth, what we’ve seen is countries investing a lot in very important infrastructure projects on human capital development. What they’ve not done as well is not capture all of the rates of return on this on these investments. I think there’s a lot more scope to rais[ing] revenues in a very progressive, efficient and equitable way.</p><p><strong>However, at the same time, how can African countries balance the need to diversify investments to keep thriving and have enough money to keep their economies going?</strong></p><p>This is always the existential struggle for developing countries, you have just so much development financing need, and it’s always a condition of redevelopment that you always exceed the available resources that you have. That’s why the international community needs to provide this counter-cyclical financing more than ever, and why countries need to also make sure that they address those challenges that have persisted for a long while.</p><p><strong>READ MORE <a href="https://www.theafricareport.com/230524/is-africa-undercutting-its-sovereignty-with-chinas-debt-trap-diplomacy/">Is Africa undercutting its sovereignty with China's debt-trap diplomacy?</a></strong></p><p>The IMF w[as] very quick out of the gates when the pandemic hit because we knew that there would be incredible financing gaps that countries would face; so as far back as October 2020, we were putting out studies reports, advocating the need for the international community to provide a lot of financing. We had the SPR allocation, which provided the continent with $53bn in 2021.</p><p><strong>Looking at vulnerable countries in Africa, what will the IMF response be and what areas will it focus on?</strong></p><p>In terms of policy priorities, we are making sure that countries address food and security challenges. The pandemic affected poverty, which affected human capital accumulation. Even when financing is not being sought, I think a lot of discussion about how we can access support from foreign aid, and the challenges that African countries face at the moment and are being squeezed by high inflation and higher food prices are important.</p><p><strong>READ MORE <a href="https://www.theafricareport.com/232731/we-are-not-the-problem-africa-insists-on-gas-as-transition-fuel/">'We are not the problem' - Africa insists on gas as transition fuel</a></strong></p><p>Right now the biggest priorities are food security, and fuel. This is an area [that] is going to be more challenging for many of our countries because it is so costly to subsidise fuel. Of course, you can understand why governments may want to temporarily smooth the shock that comes from high food and fuel prices, but you have to find an alternative way of supporting the most vulnerable.</p><p><strong>The IMF just released information about the Food Shock Window. How will this programme be able to help African countries?</strong></p><p>The food shock window allows us to lend to countries on an emergency basis without a cap, which was the case with emergency support following the pandemic. Because of the cap, the only other way we would have been able to support a country when it came to us for quick financing would be to do one of our medium-term programmes, which often takes a bit of time to negotiate.</p><p><strong>READ MORE <a href="https://www.theafricareport.com/206571/world-bank-pledges-30bn-for-fragile-countries-especially-ones-in-africa/">World Bank pledges $30bn for fragile countries, especially ones in Africa</a></strong></p><p>[…] now we have flexibility in the toolkits that we have and countries now have the option if they really need the money and resources immediately. We still have around 23 regular programmes in the region and we also have the option to augment those in those countries where we’ve seen significant needs.</p><p><strong>How does the Common Framework work now? Is there a parallel between the one that was in place during the pandemic and the one in the current framework?</strong></p><p>The Common Framework is a creditor coordination mechanism amongst bilateral official creditors. So far, there are three countries that have asked for to support for debt treatment under this common framework, Chad, Zambia and Ethiopia. This framework is used when debt is clearly unsustainable. Zambia, is now discussing with the private creditors, and hopefully, there will be an agreement soon, but you know, we’ve been able to move forward with financing Zambia.</p><p><strong>READ MORE <a href="https://www.theafricareport.com/239212/fuel-price-hikes-loom-large-as-zambia-clinches-imf-deal/">Zambia: Fuel price hikes loom large as Hichilema clinches IMF deal</a></strong></p><p>With Chad, we have people waiting for final assessment by official creditors, so hopefully we’ll get good news on that in the next couple of weeks. [However] in Ethiopia, because of the political difficulty and conflict, a staff-level agreement has not been reached yet. When it does, we hope to move things forward.</p><p>I think there’s a lot of misunderstanding about the Common Framework, so I will try to explain what the issues are. In the emergency phase when the pandemic came, countries offered to suspend debt service to bilateral officials, despite official creditors, to give countries liquidity so that they can address emergency needs because our economies were being shut down. [However] that was always a temporary measure. There was recognition that most countries can go back to norma[l] once economies recover, but for some countries that would be clearly unsustainable.</p><p><strong>The IMF has said African countries should change their investment priorities, encouraging investment in resilient and green infrastructures. Is this the right moment to do so given the context of inflation and current turmoil?</strong></p><p>What we focus on is looking at the implications that climate change is bringing and how climate adaptation has to be as important in poorer regions rather than climate mitigation. Why does climate change matter?</p><p>Rainfall patterns have changed tremendously.</p><p>Some years where there’s very limited rain, or the rains come up at a really bad time, and some days where there’s excessive rain, so it’s exacerbating some of these tensions between pastoralists and settler farmers. It’s exactly what is causing big shortfalls in agricultural production.</p><p>https://www.theafricareport.com/250481/imfs-selassie-picking-on-africa-which-has-made-zero-contribution-needs-to-electrify-is-startling/</p><p></p><div data-component-name="Twitter2ToDOM" class="tweet" data-attrs="{"url":"https://twitter.com/Brad_Setser/status/1596507249278865412","full_text":"Agree with <span class=\"tweet-fake-link\">@sobel_mark</span> on this -- the IMF's assessment didn't find a need for debt reduction in Chad even at a much lower oil price. It should have been an easy deal ...\n\nZambia and Sri Lanka (outside the common framework) are the real current tests. ","username":"Brad_Setser","name":"Brad Setser","date":"Sat Nov 26 14:12:44 +0000 2022","photos":[],"quoted_tweet":{"full_text":"Few conclusions can be made about the Common Framework based on Chad. CF progress continues to come at a snail's pace. It's still a flop.\n\nZambia remains true test case. \n\nWhy would any LIC sign up for CF when 🇨🇳/private creditors footdragging &amp; risk exists of alienating 🇨🇳? https://t.co/DJyqlIB5YB","username":"sobel_mark","name":"Mark Sobel"},"retweet_count":4,"like_count":14,"expanded_url":{},"video_url":null,"belowTheFold":true}"><a class="tweet-link-top" href="https://twitter.com/Brad_Setser/status/1596507249278865412" target="_blank"><div class="tweet-header"><img class="tweet-header-avatar" src="https://substackcdn.com/image/twitter_name/w_96/Brad_Setser.jpg" alt="Twitter avatar for @Brad_Setser" loading="lazy"><div class="tweet-header-text"><span class="tweet-author-name">Brad Setser </span><span class="tweet-author-handle">@Brad_Setser</span></div></div><div class="tweet-text">Agree with <span class="tweet-fake-link">@sobel_mark</span> on this -- the IMF's assessment didn't find a need for debt reduction in Chad even at a much lower oil price. It should have been an easy deal ...
Zambia and Sri Lanka (outside the common framework) are the real current tests. </div><div class="quote-tweet"><div class="quote-tweet-header"><img class="quote-tweet-header-avatar" src="https://substackcdn.com/image/twitter_name/w_40/sobel_mark.jpg" alt="Twitter avatar for @sobel_mark" loading="lazy"><div class="quote-tweet-header-text"><span class="quote-tweet-name">Mark Sobel </span><span class="quote-tweet-username">@sobel_mark</span></div></div>Few conclusions can be made about the Common Framework based on Chad. CF progress continues to come at a snail's pace. It's still a flop.
Zambia remains true test case.
Why would any LIC sign up for CF when 🇨🇳/private creditors footdragging & risk exists of alienating 🇨🇳? https://t.co/DJyqlIB5YB</div></a><a class="tweet-link-bottom" href="https://twitter.com/Brad_Setser/status/1596507249278865412" target="_blank"><div class="tweet-footer"><span class="tweet-date">2:12 PM ∙ Nov 26, 2022</span><hr><div class="tweet-ufi"><span href="https://twitter.com/Brad_Setser/status/1596507249278865412/likes" class="likes"><span class="like-count">14</span>Likes</span><span href="https://twitter.com/Brad_Setser/status/1596507249278865412/retweets" class="retweets"><span class="rt-count">4</span>Retweets</span></div></div></a></div><p></p><div data-component-name="Twitter2ToDOM" class="tweet" data-attrs="{"url":"https://twitter.com/Brad_Setser/status/1567298120546979840?s=20&t=_rfwCf7_SMEGDPwCektKbg","full_text":"Zambia's debt restructuring matters because it cannot avoid setting a series of precedents for the treatment of Chinese claims on low income countries (and the relative treatment of Chinese claims and bonds). \n\nSo the IMF's technical analysis of payments capacity matters \n\n1/x","username":"Brad_Setser","name":"Brad Setser","date":"Tue Sep 06 23:46:05 +0000 2022","photos":[],"quoted_tweet":{},"retweet_count":64,"like_count":249,"expanded_url":{},"video_url":null,"belowTheFold":true}"><a class="tweet-link-top" href="https://twitter.com/Brad_Setser/status/1567298120546979840?s=20&t=_rfwCf7_SMEGDPwCektKbg" target="_blank"><div class="tweet-header"><img class="tweet-header-avatar" src="https://substackcdn.com/image/twitter_name/w_96/Brad_Setser.jpg" alt="Twitter avatar for @Brad_Setser" loading="lazy"><div class="tweet-header-text"><span class="tweet-author-name">Brad Setser </span><span class="tweet-author-handle">@Brad_Setser</span></div></div><div class="tweet-text">Zambia's debt restructuring matters because it cannot avoid setting a series of precedents for the treatment of Chinese claims on low income countries (and the relative treatment of Chinese claims and bonds).
So the IMF's technical analysis of payments capacity matters
1/x</div></a><a class="tweet-link-bottom" href="https://twitter.com/Brad_Setser/status/1567298120546979840?s=20&t=_rfwCf7_SMEGDPwCektKbg" target="_blank"><div class="tweet-footer"><span class="tweet-date">11:46 PM ∙ Sep 6, 2022</span><hr><div class="tweet-ufi"><span href="https://twitter.com/Brad_Setser/status/1567298120546979840?s=20&t=_rfwCf7_SMEGDPwCektKbg/likes" class="likes"><span class="like-count">249</span>Likes</span><span href="https://twitter.com/Brad_Setser/status/1567298120546979840?s=20&t=_rfwCf7_SMEGDPwCektKbg/retweets" class="retweets"><span class="rt-count">64</span>Retweets</span></div></div></a></div><div data-component-name="Twitter2ToDOM" class="tweet" data-attrs="{"url":"https://twitter.com/Brad_Setser/status/1565366357851504641?s=20&t=FGrvjNZa6E_pWSDubuQMUA","full_text":"Zambia's debt restructuring is a test for the G-20's common framework, and specifically, for China's willingness to restructure its lending to the Belt and Road countries.\n\nEven with the approval of the IMF program, it still isn't totally clear what China has agreed to do .... ","username":"Brad_Setser","name":"Brad Setser","date":"Thu Sep 01 15:49:57 +0000 2022","photos":[{"img_url":"https://pbs.substack.com/media/FblL3KnWAAAFJDO.png","link_url":"https://t.co/SxRLGprJAQ","alt_text":null}],"quoted_tweet":{},"retweet_count":8,"like_count":42,"expanded_url":{},"video_url":null,"belowTheFold":true}"><a class="tweet-link-top" href="https://twitter.com/Brad_Setser/status/1565366357851504641?s=20&t=FGrvjNZa6E_pWSDubuQMUA" target="_blank"><div class="tweet-header"><img class="tweet-header-avatar" src="https://substackcdn.com/image/twitter_name/w_96/Brad_Setser.jpg" alt="Twitter avatar for @Brad_Setser" loading="lazy"><div class="tweet-header-text"><span class="tweet-author-name">Brad Setser </span><span class="tweet-author-handle">@Brad_Setser</span></div></div><div class="tweet-text">Zambia's debt restructuring is a test for the G-20's common framework, and specifically, for China's willingness to restructure its lending to the Belt and Road countries.
Even with the approval of the IMF program, it still isn't totally clear what China has agreed to do .... </div><div class="tweet-photos-container one"><div class="tweet-photo-wrapper "><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!HZeH!,w_600,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fpbs.substack.com%2Fmedia%2FFblL3KnWAAAFJDO.png"><img class="tweet-photo" src="https://pbs.substack.com/media/FblL3KnWAAAFJDO.png" alt="Image" loading="lazy"></picture></div></div></a><a class="tweet-link-bottom" href="https://twitter.com/Brad_Setser/status/1565366357851504641?s=20&t=FGrvjNZa6E_pWSDubuQMUA" target="_blank"><div class="tweet-footer"><span class="tweet-date">3:49 PM ∙ Sep 1, 2022</span><hr><div class="tweet-ufi"><span href="https://twitter.com/Brad_Setser/status/1565366357851504641?s=20&t=FGrvjNZa6E_pWSDubuQMUA/likes" class="likes"><span class="like-count">42</span>Likes</span><span href="https://twitter.com/Brad_Setser/status/1565366357851504641?s=20&t=FGrvjNZa6E_pWSDubuQMUA/retweets" class="retweets"><span class="rt-count">8</span>Retweets</span></div></div></a></div><div data-component-name="Twitter2ToDOM" class="tweet" data-attrs="{"url":"https://twitter.com/SergiLanauIIF/status/1598321833983483904","full_text":"Foreigners continue to shun South African bonds but the fiscal deficit remains very wide. The local financial system continues to accumulate huge amounts of bonds. Good to avoid a funding crisis; bad for credit to the private sector. ","username":"SergiLanauIIF","name":"Sergi Lanau","date":"Thu Dec 01 14:23:15 +0000 2022","photos":[{"img_url":"https://pbs.substack.com/media/Fi5g6pNX0AIG7wj.png","link_url":"https://t.co/7nKu1cp1Qp","alt_text":null}],"quoted_tweet":{},"retweet_count":2,"like_count":7,"expanded_url":{},"video_url":null,"belowTheFold":true}"><a class="tweet-link-top" href="https://twitter.com/SergiLanauIIF/status/1598321833983483904" target="_blank"><div class="tweet-header"><img class="tweet-header-avatar" src="https://substackcdn.com/image/twitter_name/w_96/SergiLanauIIF.jpg" alt="Twitter avatar for @SergiLanauIIF" loading="lazy"><div class="tweet-header-text"><span class="tweet-author-name">Sergi Lanau </span><span class="tweet-author-handle">@SergiLanauIIF</span></div></div><div class="tweet-text">Foreigners continue to shun South African bonds but the fiscal deficit remains very wide. The local financial system continues to accumulate huge amounts of bonds. Good to avoid a funding crisis; bad for credit to the private sector. </div><div class="tweet-photos-container one"><div class="tweet-photo-wrapper "><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!REat!,w_600,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fpbs.substack.com%2Fmedia%2FFi5g6pNX0AIG7wj.png"><img class="tweet-photo" src="https://pbs.substack.com/media/Fi5g6pNX0AIG7wj.png" alt="Image" loading="lazy"></picture></div></div></a><a class="tweet-link-bottom" href="https://twitter.com/SergiLanauIIF/status/1598321833983483904" target="_blank"><div class="tweet-footer"><span class="tweet-date">2:23 PM ∙ Dec 1, 2022</span><hr><div class="tweet-ufi"><span href="https://twitter.com/SergiLanauIIF/status/1598321833983483904/likes" class="likes"><span class="like-count">7</span>Likes</span><span href="https://twitter.com/SergiLanauIIF/status/1598321833983483904/retweets" class="retweets"><span class="rt-count">2</span>Retweets</span></div></div></a></div><p>Please use the sharing tools found via the share button at the top or side of articles. Copying articles to share with others is a breach of <a href="https://www.ft.com">FT.com</a> <a href="https://help.ft.com/help/legal-privacy/terms-conditions/">T&Cs</a> and <a href="https://help.ft.com/help/legal-privacy/copyright/copyright-policy/">Copyright Policy</a>. Email <a href="mailto:licensing@ft.com">licensing@ft.com</a> to buy additional rights. Subscribers may share up to 10 or 20 articles per month using the gift article service. More information can be <a href="https://www.ft.com/tour">found here</a>. <br><a href="https://www.ft.com/content/bbaec458-e0b5-4499-ae62-83334d5bebaf#myft:my-news:page">https://www.ft.com/content/bbaec458-e0b5-4499-ae62-83334d5bebaf#myft:my-news:page</a></p><p><br><br>David Pilling 6 HOURS AGO 10 Print this page When Ghana’s President Nana Akufo-Addo took to the airwaves in October to assure investors that their money was safe, it was only natural for them to smell trouble ahead. That is exactly what they got. Long considered one of the most stable and best-managed countries in Africa, Ghana is about to join the list of nations that cannot repay their debts. That list is likely to get longer. Zambia has already defaulted and the IMF reckons that 19 economies in Africa alone are in debt distress. The government has been in denial. Akufo-Addo stated emphatically: “There will be no haircuts.” It was left to junior ministers to break the news that bondholders could expect a short back and sides — and to lose about 30 per cent of their tresses in the process. Ghana’s story highlights the likely fate of other emerging economies as the tide of cheap money recedes. Many got hooked on eurobond issues as capital markets opened some 15 years ago. Ghana issued its first eurobond, for $750mn, in 2007 — and has been going back to the punchbowl ever since. Now, as interest rates normalise and investor appetite for frontier risk wanes, the bowl has been removed. When US Treasury yields were below 2 per cent, Ghana could borrow at 8 per cent or less. Now the implied rate on its bonds is nearer 40 per cent, says Charles Robertson of Renaissance Capital, which means investors regard it as too risky to lend to at all. That’s tough because Ghana, and countries like it, need money more than ever. Battered by Covid and the ripple effects from the war in Ukraine, economies have stalled and many people have been pushed into poverty. Yet far from addressing these problems through spending, Ghana will have to make cuts to satisfy creditors and the IMF, from which Accra is seeking $3bn. Somehow it will have to protect the most vulnerable as it tightens fiscally. Multilateral agencies will have to take up some of the slack. Ghana has been quick to blame anyone but itself. Akufo-Addo spoke of a confluence of “malevolent forces”. A series of exogenous shocks has indeed made the world a hostile environment. After promising vaccines and financing, rich nations all but abandoned Ghana in the pandemic. Still, the government protests too much. When in February, Moody’s downgraded Ghana’s sovereign debt from B3 to CAA1, pushing it further into junk territory, Accra attacked the messenger. The finance ministry accused rating agencies of mispricing risk in “what appears to be an institutionalised bias against African economies”. It would have done better to look in the mirror. Moody’s estimated debt had reached 80 per cent of GDP and debt interest payments would swallow half of government revenue. One Moody’s executive found plans to address deteriorating finances through vague spending cuts and an unpopular levy on electronic transactions “very aspirational” — for which read “total fantasy”. Its cynicism has proved well-founded. Ghana had some promising ideas. It made school free up to high school. It has addressed energy shortages, and has some of the best health and welfare indicators in Africa. But spending has always spiralled ahead of elections; too much debt has gone on an escalating public sector wage bill. The point of borrowing should be to improve productive capacity and with it the ability to pay back loans. Ghana’s government has too often indulged in vanity projects, epitomised by plans for a colossal cathedral. Perhaps it hoped to pray it could repay its debts. Plans to clean up the mess appear no more realistic. The recent budget is described as a “Frankenstein’s mash-up” by Bright Simons of the Imani think-tank. Getting public servants to drive smaller cars, one of the proposals, is not going to cut it. Nor has the government learnt humility. It blames a 50 per cent fall in the cedi this year on “speculators” and black marketeers. It might look instead to its unfunded deficits and the whirring of the printing presses. Accra desperately needs a credible plan to get its finances back on track. That will mean hammering out a debt restructuring package with creditors, and accepting that it will be shut out of debt markets. Still, not all is lost. Ghana has solid foundations on which to build. It has one of the continent’s best-educated workforces, a reasonably diversified economy, decent infrastructure and a strong democratic record. That means the ruling party may well be punished in the 2024 elections. But markets will, in time, forgive and forget. Just ask Argentina.</p><p></p><p></p><p>https://pmbejd.org.za/</p><p>https://www.theafricareport.com/252760/ghanas-worsening-economic-crisis-has-hit-an-unprecedented-situation-says-one-trader/</p><p>https://www.theafricareport.com/248574/ghana-kenya-ethiopia-on-edge-as-africa-fraught-with-default-risks/</p><p></p><h1><strong>DRC – Kenya: France’s Macron discreetly lobbies for Kenyan deployment in Goma</strong></h1><p>By <strong>Benjamin Roger, Romain Gras</strong><br>Posted on Tuesday, 22 November 2022 17:21</p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!0AUF!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fe0ccfc4f-f9f4-4e89-a369-957f8f0c6fcd_732x419.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!0AUF!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fe0ccfc4f-f9f4-4e89-a369-957f8f0c6fcd_732x419.png 424w, https://substackcdn.com/image/fetch/$s_!0AUF!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fe0ccfc4f-f9f4-4e89-a369-957f8f0c6fcd_732x419.png 848w, https://substackcdn.com/image/fetch/$s_!0AUF!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fe0ccfc4f-f9f4-4e89-a369-957f8f0c6fcd_732x419.png 1272w, https://substackcdn.com/image/fetch/$s_!0AUF!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fe0ccfc4f-f9f4-4e89-a369-957f8f0c6fcd_732x419.png 1456w" sizes="100vw"><img src="https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/e0ccfc4f-f9f4-4e89-a369-957f8f0c6fcd_732x419.png" width="732" height="419" data-attrs="{"src":"https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/e0ccfc4f-f9f4-4e89-a369-957f8f0c6fcd_732x419.png","srcNoWatermark":null,"fullscreen":null,"imageSize":null,"height":419,"width":732,"resizeWidth":null,"bytes":null,"alt":"","title":null,"type":null,"href":null,"belowTheFold":true,"topImage":false,"internalRedirect":null,"isProcessing":false,"align":null,"offset":false}" class="sizing-normal" alt="" title="" srcset="https://substackcdn.com/image/fetch/$s_!0AUF!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fe0ccfc4f-f9f4-4e89-a369-957f8f0c6fcd_732x419.png 424w, https://substackcdn.com/image/fetch/$s_!0AUF!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fe0ccfc4f-f9f4-4e89-a369-957f8f0c6fcd_732x419.png 848w, https://substackcdn.com/image/fetch/$s_!0AUF!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fe0ccfc4f-f9f4-4e89-a369-957f8f0c6fcd_732x419.png 1272w, https://substackcdn.com/image/fetch/$s_!0AUF!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fe0ccfc4f-f9f4-4e89-a369-957f8f0c6fcd_732x419.png 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><div class="pencraft pc-reset icon-container restack-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-refresh-cw"><path d="M3 12a9 9 0 0 1 9-9 9.75 9.75 0 0 1 6.74 2.74L21 8"></path><path d="M21 3v5h-5"></path><path d="M21 12a9 9 0 0 1-9 9 9.75 9.75 0 0 1-6.74-2.74L3 16"></path><path d="M8 16H3v5"></path></svg></div><div class="pencraft pc-reset icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></div></div></div></div></a><figcaption class="image-caption">Presidents William Ruto and Emmanuel Macron. © Ludovic MARIN / AFP - Simon MAINA / AFP / Montage JA</figcaption></figure></div><p><strong>As the regional force’s first Kenyan contingents arrive in Goma, France’s President Emmanuel Macron is pleading - behind the scenes - for financial support from the EU.</strong></p><p>After waffling on his involvement in the Nairobi process, which his predecessor Uhuru Kenyatta initiated, William Ruto obtained parliament’s approval on 10 November to deploy 903 soldiers in the East African Community Regional Force (EACRF).</p><p>Some <strong>200 Kenyan troops have already taken up residence</strong> in Goma, where the EACRF headquarters is located.</p><p>Following his meeting with DRC President Félix Tshisekedi during a visit to Kinshasa from 20 to 21 November, Ruto reiterated his commitment to continue the deployment. This is despite persistent doubts regarding the operation’s financing.</p><p><strong>READ MORE <a href="https://www.theafricareport.com/259540/kenyan-peacekeepers-arrive-in-drcs-volatile-east/">Kenyan peacekeepers arrive in DRC's volatile east</a></strong></p><p>According to the force’s statutes, countries are supposed to finance the intervention of their contingents themselves. The budget currently planned by the Kenyan ministry of defence is estimated to be around €37m ($38m) for the first six months.</p><p>It could exceed €50m over a year if the operation is extended. This amount is raising some concern in Kenya as the troops have already been involved for several years in Amisom, the African Union’s peacekeeping mission in Somalia. According to several European diplomatic sources, France is working behind the scenes to raise financial support for Kenya’s deployment within the regional force.</p><h3><strong>On the table at the G7, then in Brussels</strong></h3><p>Macron has spoken twice with Ruto over the phone since the latter was elected: once at the beginning of October and a second time on 1 November. During the last call, the French president, who would like Kenya to be involved in the Nairobi process, pledged to try to mobilise European financial support.</p><p>Although Ruto said such support was not necessary in the short term for the first part of the intervention, he said it would be welcomed if the operation is prolonged. The regional force’s mandate is for six months and is subject to renewal.</p><p>Africa Insight</p><p>Wake up to the essential with the Editor's picks.</p><p>Sign up</p><p>Also receive offers from The Africa Report</p><p>Also receive offers from The Africa Report's partners</p><p><strong>The issue was raised again at the G7 foreign ministers’ meeting</strong> in Münster, Germany, on 3 and 4 November. France’s foreign affairs minister, Catherine Colonna, discussed the issue with her Kenyan counterpart, Alfred Mutua, and Josep Borrell, the EU’s high representative for foreign affairs. In the wake of this, the matter was also put on the table in Brussels. The EU will thus ultimately have to decide on the feasibility of such a project because the mechanism envisaged is that of the European Peace Facility (EPF).</p><p><strong>READ MORE <a href="https://www.theafricareport.com/262130/kenya-you-are-a-puppet-of-the-west-raila-tells-president-ruto/">Kenya: 'You are a puppet of the West', Raila tells President Ruto</a></strong></p><p>The latter, which was set up in March 2021, allows for the financing of various aspects of military support to a third country, including lethal weapons. However, other EU member states will need to be convinced, as the overwhelming majority of EFF funds are currently earmarked for Ukraine and other projects are also being discussed. <strong>Kenya has not submitted any formal application to date</strong> and so the amount of this formal engagement has not yet been established. The Elysée Palace assures us that the US has also said it is willing to contribute to this deployment’s financing.</p><p>Although Kenyan troops are supposed to intervene in areas currently occupied by the M23 – which Kinshasa believes is supported by Rwanda – it is unclear what strategy the regional force will adopt to deal with the rebels. On 21 November, at a press conference, Ruto stated that the EACRF’s mission is “to ensure peace in Eastern DRC and impose peace on those who want to create instability and insecurity at all costs”.</p><p>On 16 June, in his first speech, Kenya’s General Jeff Nyagah, commander of this regional force, nevertheless maintained that the priority for now is the political process, that is, the mediation attempts in Luanda and Nairobi.</p><p>https://www.theafricareport.com/262373/drc-kenya-frances-macron-discreetly-lobbies-for-kenyan-deployment-in-goma/?utm_source=twitter.com&utm_campaign=post_articles_twitter_22_11_2022&utm_medium=social</p><p></p><p></p><div data-component-name="Twitter2ToDOM" class="tweet" data-attrs="{"url":"https://twitter.com/Brad_Setser/status/1595431640427290626?s=20&t=aSUPpPvp83qFZ_ZyzFvAlg","full_text":"Really amazing how much difficulty China has had fitting into the existing sovereign debt restructuring architecture ...\n\n1/x\n\n","username":"Brad_Setser","name":"Brad Setser","date":"Wed Nov 23 14:58:39 +0000 2022","photos":[],"quoted_tweet":{},"retweet_count":22,"like_count":75,"expanded_url":{"url":"https://www.axios.com/2022/11/19/the-zambia-debt-restructuring-precedent","image":"https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/5fa7c490-8a41-40c5-89d2-2eb5e11669b6_1366x768.jpeg","title":"Zambia’s debt restructuring is a crucial test case for other countries","description":"It’s creating a standoff between China and the multilateral development banks.","domain":"axios.com"},"video_url":null,"belowTheFold":true}"><a class="tweet-link-top" href="https://twitter.com/Brad_Setser/status/1595431640427290626?s=20&t=aSUPpPvp83qFZ_ZyzFvAlg" target="_blank"><div class="tweet-header"><img class="tweet-header-avatar" src="https://substackcdn.com/image/twitter_name/w_96/Brad_Setser.jpg" alt="Twitter avatar for @Brad_Setser" loading="lazy"><div class="tweet-header-text"><span class="tweet-author-name">Brad Setser </span><span class="tweet-author-handle">@Brad_Setser</span></div></div><div class="tweet-text">Really amazing how much difficulty China has had fitting into the existing sovereign debt restructuring architecture ...
1/x
</div><a class="expanded-link" href="https://www.axios.com/2022/11/19/the-zambia-debt-restructuring-precedent" target="_blank"><img src="https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/5fa7c490-8a41-40c5-89d2-2eb5e11669b6_1366x768.jpeg" class="expanded-link-img" loading="lazy"><div class="expanded-link-bottom"><span class="expanded-link-domain">axios.com</span><span class="expanded-link-title">Zambia’s debt restructuring is a crucial test case for other countries</span><span class="expanded-link-description">It’s creating a standoff between China and the multilateral development banks.</span></div></a></a><a class="tweet-link-bottom" href="https://twitter.com/Brad_Setser/status/1595431640427290626?s=20&t=aSUPpPvp83qFZ_ZyzFvAlg" target="_blank"><div class="tweet-footer"><span class="tweet-date">2:58 PM ∙ Nov 23, 2022</span><hr><div class="tweet-ufi"><span href="https://twitter.com/Brad_Setser/status/1595431640427290626?s=20&t=aSUPpPvp83qFZ_ZyzFvAlg/likes" class="likes"><span class="like-count">75</span>Likes</span><span href="https://twitter.com/Brad_Setser/status/1595431640427290626?s=20&t=aSUPpPvp83qFZ_ZyzFvAlg/retweets" class="retweets"><span class="rt-count">22</span>Retweets</span></div></div></a></div><p></p><p></p><p><strong>Ghana's embattled finance minister Ken Ofori-Atta has apologised to citizens for the unprecedented hardship they are enduring under his watch, but failed to accept responsibility for the economic downturn.</strong></p><p>In his trademark all-white outfit with dark framed glasses to match, the soft-spoken minister denied all the charges levelled against him. The Minority in Parliament have accused him of misusing public funds, misreporting economic data, and mismanagement, resulting in the collapse of the Ghanaian economy.</p><p><strong>READ MORE <a href="https://www.theafricareport.com/260295/ghana-akufo-addo-moves-decisively-to-sack-ofori-atta-deputy-will-it-be-enough/">Ghana: Akufo-Addo moves decisively to sack Ofori-Atta deputy. Will it be enough?</a></strong></p><p>“The truth is [that] considerable progress has been made under my tenure as minister for finance. Since 2017, we have competently managed the economy… Indeed, to appreciate where we are now, we need to look back at where we came from,” Ofori-Atta told the parliamentary committee <strong>probing the censure motion for his removal from office.</strong></p><p>It was a make-or-break moment for Ofori-Atta as some governing New Patriotic Party (NPP) lawmakers have already urged the president to fire him. As this cousin to President Nana Akufo-Addo sat through the over seven-hour grilling session, he knew the stakes were high. He did not lose sight of the fact that the majority of Ghanaians were unhappy with the state of the economy.</p><h3><strong>‘I am truly sorry’</strong></h3><p>“Today, I acknowledge our economy is facing difficulties and the people of Ghana are enduring hardships. As [the] person President Akufo-Addo has put in charge of this economy, I feel the pain personally, professionally and in my soul,” Ofori-Atta said, reading from a 33-page prepared document he later submitted to the eight-member committee as his defence.</p><p>The finance minister, who is being urged by the Majority in Parliament to step down, <strong>could face an investigation</strong>. Anas Aremeyaw Anas, an investigative journalist, has petitioned the Commission on Human Rights and Administrative Justice (CHRAJ) to look into the minister.</p><blockquote><p><em>Ken Ofori-Atta must resign. He has done his best. He needs to leave the scene to save his reputation.</em></p></blockquote><p>With the knowledge that resentment is growing, Ofori-Atta said: “I see and feel the terrible impact of rising prices of goods and services on the lives and livelihoods of ordinary Ghanaians. I feel the stress of running a business, but it is the strength and perseverance of the Ghanaian people that inspire me and my colleagues in government every morning to press on.”</p><p><strong>READ MORE <a href="https://www.theafricareport.com/253871/ghana-nana-akufo-addo-harassed-by-his-own-majority/">Ghana: Nana Akufo-Addo harassed by his own majority</a></strong></p><p>He said: “That is what gives me the strength to press on to find solutions and relief for Ghanaians to the myriad problems that our country and the rest of the world are going through, especially since March 2020.</p><p>Africa Insight</p><p>Wake up to the essential with the Editor's picks.</p><p>Sign up</p><p>Also receive offers from The Africa Report</p><p>Also receive offers from The Africa Report's partners</p><p>“Let me use this opportunity to say to the Ghanaian people what I believe with courage every finance minister around the world may want to say to their people now: I am truly sorry,” the finance minister said in a plea to save his job.</p><h3><strong>Presidential support</strong></h3><p>President Akufo-Addo is not ready to let go of his head of treasury, having sacrificed a deputy finance minister Charles Adu Boahen last week over an act of impropriety in an undercover documentary by a local investigative journalist.</p><p>Ofori-Atta seems to have <strong>the backing of some heavyweights</strong> at the office of the president despite citizens’ hue and cry. The chief of staff of the Republic of Ghana, Frema Osei-Opare, led a host of ministers to last Friday’s hearing to give the finance minister moral support.</p><p><strong>READ MORE <a href="https://www.theafricareport.com/192339/ghana-whos-who-in-finance-inister-ken-ofori-attas-inner-circle/">Ghana: Who’s who in Finance Minister Ken Ofori-Atta’s inner circle?</a></strong></p><p>Despite the emotional submission and outright denial of allegations against him, governance experts still believe Ofori-Atta has done more harm than good and needs to take a final bow.</p><p>Benjamin Otchere-Ankrah, a governance lecturer at Central University, says the minister should make way for a new face even before the committee completes its work.</p><p>“Ken Ofori-Atta must resign. He has done his best. He needs to leave the scene to save his reputation. I believe the introduction of […] fresh blood at the finance ministry will bring back the confidence in Ghanaians and investors in general,” Otchere-Ankrah tells <em>The Africa Report.</em></p><p>“There is a lot of pressure on [Ken Ofori-Atta] and that could let him lose focus. We should not joke [about] how we are managing the economy. Why can’t Ofori-Atta resign in spite of all the criticisms?” he said.</p><p><strong>READ MORE <a href="https://www.theafricareport.com/259079/ghana-parliament-probes-finance-minister-ofori-atta-amidst-censure-notice/">Ghana: Parliament probes Finance Minister Ofori-Atta amidst censure notice</a></strong></p><p>For his part, Kwasi Yirenkyi, a financial analyst says the minister failed to account for himself before the committee, but rather used the platform to campaign for the government.</p><p>“The testimony was full of touting the achievements of the Akufo-Addo government without really addressing the allegations against him. We have heard this over and over and this is not a time to read budget statement[s] or engage in political gimmicks. I will score him below average and he must go,” Yirenkyi tells <em>The Africa Report.</em></p><h3><strong>Hope in the IMF</strong></h3><p>Ofori-Atta’s career has come under severe scrutiny at a time Ghana’s inflation is at a record high – 40.4% in October – the Ghanaian cedi has taken a downward spiral and the cost of living as well as fuel prices keep rising, mostly due to the pandemic and the crisis in Ukraine.</p><p><strong>READ MORE <a href="https://www.theafricareport.com/261778/ghana-2023-budget-presentation-delayed-by-unconcluded-imf-talks/">Ghana: 2023 budget presentation delayed by unconcluded IMF talks</a></strong></p><p>However, the investment banker is optimistic that the economy will bounce back after negotiations with the IMF are concluded. <strong>Ghana is seeking $3bn from the Fund</strong>, an amount that is expected to be incorporated in the 2023 budget statement to be read this month.</p><p>“We are nearly through with the IMF negotiations. I am confident that once we conclude our debt sustainability programme and secure a fund programme, the nation will next year see the stability and fiscal space that can spur us back on to a sustainable economic recovery and growth, which should endure considering on the investments we have made in all sectors,” Ofori-Atta said in his concluding remarks.</p><p>https://www.theafricareport.com/261783/ghana-i-am-not-guilty-but-i-am-sorry-for-the-hardship-says-finance-minister-ofori-atta/</p><p></p><p><em>By the year 2000, the government of Ghana had borrowed so much that the country was in <a href="https://www.imf.org/en/News/Articles/2015/09/14/01/49/pr0211">debt distress</a>. It then subscribed to the <a href="https://www.imf.org/en/News/Articles/2015/09/14/01/49/pr0211">Heavily Indebted Poor Countries initiative</a> of the International Monetary Fund and World Bank. Consequently, much of the country’s external debt of over US$4 billion was written off by creditors. By the time the initiative ended in 2006, Ghana’s total public debt stock was US$780 million (25% of GDP). The debt stock has since risen by 7000% to <a href="https://www.ghanaweb.com/GhanaHomePage/business/Ghana-s-public-debt-stock-now-GH-341-8-billion-as-of-September-2021-1406452">$54 billion, which is 78% of GDP</a>. The current debt to GDP ratio is 78%, while the average for developing countries is 60%. Economist, Adu Owusu Sarkodie, explains how this happened, why it’s a problem and what can be done.</em></p><h2><strong>How did Ghana get into this situation?</strong></h2><p>After the Heavily Indebted Poor Countries initiative ended in 2006, the public debt stock has largely been driven by the continuous accumulation of budget deficits (48.6%), the currency deprecation (28.2%), and off-budget borrowings (23.2%). Between 2017 and 2019, Ghana’s debt stock grew astronomically for three main reasons, beyond the normal drivers.</p><p>First was the country’s <a href="https://www.fitchratings.com/research/sovereigns/energy-sector-debt-is-key-risk-to-ghana-post-pandemic-debt-trajectory-03-03-2021">energy sector debt</a>. This is debt owed to the country’s power producers and suppliers. It has been accumulated largely by Ghana’s state-owned enterprises, that struggle to generate enough internal revenue to pay their loans. In 2021, for instance, the government has so far provided a $3 billion bailout.</p><p>Second was the financial sector <a href="https://isd.gov.gh/topstories-isdnews-authentic-government-news-at-every-corner-of-the-nation/764/">clean-up exercise</a> undertaken by the country’s central bank. Between 2017 and 2019, the Bank of Ghana revoked the licences of some banks, savings and loans, micro-financial institutions, finance houses, and investment institutions due to their insolvency and financial malpractices. The government had to raise another <a href="https://isd.gov.gh/topstories-isdnews-authentic-government-news-at-every-corner-of-the-nation/764/">$3 billion in bonds</a> to pay customers of the defunct banks and financial companies.</p><p>Thirdly, like many countries in the world, COVID-19 has had a <a href="https://www.emerald.com/insight/content/doi/10.1108/IJSE-08-2020-0582/full/html">serious impact</a> on the Ghanaian economy due to lockdowns, border closures, restrictions in movement, and the fall in crude oil prices. The economic restrictions resulted in a fall in revenue of US$2 billion, while COVID-19 expenditures increased total government expenditure by US$1.7 billion, giving a total fiscal impact of almost US$4 billion in 2020.</p><h2><strong>How bad is it?</strong></h2><p>The current rigidity in the Ghanaian budget makes it impossible for the government to do anything without borrowing. Rigidity refers to those statutory payments in the budget over which the government has no control. Just two of the statutory payments (compensation of employees and debt service) consume the total revenue and grants. In 2020, debt service alone (paying interest plus amortisation) consumed 70% of revenue. That’s close to the level of 72% before the country subscribed to the Heavily Indebted Poor Countries initiative.</p><p>Based on the estimated revenue and expenditure figures in the 2021 and 2022 budgets, the debt service burden is expected to worsen in 2021 at 82%, before improving at 45% in 2022.</p><p>For the government to be able to meet the remaining statutory expenditure and all other discretionary expenditures, it will have to borrow. If the government does not instil discipline and raise revenue domestically, or cut down some expenditure (or both) to create fiscal space, it will have to seek help in an International Monetary Fund programme.</p><p>Recently, some international credit rating agencies have downgraded Ghana’s economy, citing the country’s inability to raise enough revenue to service its debt. The signal this sends to investors is that Ghana’s sovereign bond is not profitable and its default risk is too high.</p><p>The implication of this is that the government may not be able to raise money from the international capital market. The options are to either borrow domestically and crowd out the private sector, or borrow from other countries. If this option is exhausted, it will have to seek an International Monetary Fund programme.</p><h2><strong>What has been the impact on the economy?</strong></h2><p>The impact of the huge public debt and the slowed growth of revenue is that the country has to borrow to finance its spending every time. Until the government borrows it can do virtually nothing. This has slowed down the government’s ability to implement its programmes and policies to grow and transform the economy and create jobs.</p><p>Over a 16-year period (2006-2021), the country’s economic growth was largely driven by the extractive sector. This sector is capital intensive: it uses more machines than human beings. The effect is that, though there is some economic growth, the source of growth is not from sectors of the economy that can generate employment. This is why unemployment has <a href="https://www.bloomberg.com/news/articles/2021-12-19/ghana-unemployment-rate-has-tripled-in-10-years-census-shows">increased</a> from 5% to 13%.</p><h2><strong>Are there any solutions?</strong></h2><p>Ghana finds itself in difficult position. The only way out is to raise enough revenue to finance its development. Even if the government succeeded in borrowing, it would still have to raise revenue domestically to service the debt. Therefore, there is no substitute for domestic resource mobilisation. The projected budget deficit for 2022 is $6 billion. The government will have to raise revenue through taxes (without overburdening the taxpayers) and non-tax sources.</p><p>The Institute for Fiscal Studies <a href="https://www.ifsghana.org/the-role-of-the-extractive-sector-in-ghanas-comparatively-low-public-sector-revenue-mobilization-policy-brief-no-11/">researched</a> the sources of revenue to the government in 2018 and made the following recommendations as the possible additional revenue to Ghana’s public finance annually:</p><ul><li><p>Personal income tax of the workers in the informal sector – $47 million</p></li><li><p>Property tax – $157 million</p></li><li><p>Tax exemptions – $790 million</p></li><li><p>55% share of the extractive sector – $4 billion</p></li></ul><p>According to the Ghana Statistical Service, there are about <a href="https://statsghana.gov.gh/gssmain/storage/img/infobank/2021%20PHC%20Provisional%20Results%20Press%20Release.pdf">7.7 million workers</a> in the informal sector but it is difficult to measure their incomes. There is a difficulty in taxing incomes that are unknown. That is why there seems to be a good economic justification to tax them using the <a href="https://www.uncdf.org/article/7408/ghana-electronic-levy">proposed e-levy</a>. But the levy must be designed to achieve the objective of taxing the incomes of workers in the informal sector.</p><p>In addition to raising revenue, the government must also plug all loopholes, and ensure prudent management of public finance. The Auditor-General department and Public Accounts Committee of Parliament usually identify financial irregularities in their reports.</p><p>The recent Auditor-General’s <a href="https://www.myjoyonline.com/12-85bn-irregularities-committed-by-state-institutions-in-2020-auditor-general-report/">report</a> identified about $1.8 billion worth of irregularities in public finance. When these irregularities are checked, the government will gain the confidence and support of the citizens.</p><p>If the current growth in the public debt stock continues, then the country is likely to find itself in debt distress, which might lead to seeking an International Monetary Fund bailout.</p><p>https://theconversation.com/ghanas-debt-makes-development-impossible-here-are-some-solutions-176580</p><p>Ghana is again <a href="https://www.imf.org/en/News/Articles/2022/07/13/pr22256-imf-staff-concludes-visit-to-ghana">seeking assistance</a> from the International Monetary Fund (IMF) to enable the country to meet its <a href="https://www.ons.gov.uk/economy/nationalaccounts/balanceofpayments">payments</a> to the rest of the world and restore the health of government finances. It is the second time in the <a href="https://www.imf.org/en/News/Articles/2015/09/14/01/49/pr15159">past three years</a> and <a href="https://www.imf.org/external/np/fin/tad/extarr2.aspx?memberKey1=350&date1key=2018-05-31">17th since independence</a> in 1957 that Ghana has turned to the IMF for help.</p><p>The latest foray reverses the current administration’s earlier stance that it would avoid approaching the multilateral body because of the <a href="https://www.jstor.org/stable/40270954">conditions</a> that come with its assistance. Ghana’s finance minister Ken Ofori-Atta said in <a href="https://www.ghanaweb.com/GhanaHomePage/business/IMF-still-not-an-option-Ofori-Atta-speaks-on-government-s-homegrown-recovery-plan-1537070">May 2022</a> that government was “confident in its homegrown solutions such as the e-levy in getting the economy to recover … seeking a bailout from the IMF is not an option”.</p><p>Ghana’s approaches to the IMF, which have averaged every four years over the past 65 years, tell a story of recurrent failure of government to properly build the economy to withstand internal and external shocks. Ghana’s lack of fiscal discipline, and its recent history of dependence on foreign financing – with as much as 48% of the total <a href="https://mofep.gov.gh/sites/default/files/reports/economic/2021-Annual-Public-Debt-Report.pdf">public debt</a> being held by external investors – leaves the country vulnerable to swings in investor sentiment, and accompanying portfolio investment selloffs.</p><p>The request to IMF also underscores the fact that Ghana has much deeper structural economic problems. These require a multi-stakeholder approach to resolve. Unfortunately, the pervasive and deeply entrenched nature of the country’s Fourth Republican <a href="https://www.econstor.eu/bitstream/10419/122241/1/682193240.pdf">clientelist politics</a> which manifests in a ‘<a href="https://www.graphic.com.gh/news/politics/winner-takes-all-the-bane-of-ghanaian-politics.html">winner take all</a>’ approach to <a href="https://www.jstor.org/stable/45341706">governance</a> has often distorted a much-needed national debate on what needs to be done and how it must be done. Ghana must fix the structural problems – such as its over-reliance on primary commodity exports – and live within its means. As we argue in an <a href="https://www.researchgate.net/project/The-Political-Economy-of-IMF-Programmes-and-Public-Debt-Management-Under-Ghanas-Fourth-Republic">upcoming research project</a>, there is a greater political leaning towards shorter-term goals of maintaining regime stability or forcing a change in the regime.</p><p>Ghana came out of the last <a href="https://citinewsroom.com/2019/04/ghana-officially-exits-imf-programme/">IMF programme in 2019</a> with some <a href="https://www.imf.org/en/News/Articles/2019/03/20/pr1983-ghana-imf-executive-board-completes-the-last-review-of-extended-credit-facility-for-ghana">significant</a> macroeconomic gains.</p><p>It had been forced to tap IMF assistance to deal with global and local economic shocks - the same as now. These included the spillovers of the <a href="https://www.brookings.edu/blog/the-avenue/2015/03/31/beneath-chinas-gdp-slowdown/">slowdown</a> in China, the 2014-2017 <a href="https://blogs.worldbank.org/developmenttalk/what-triggered-oil-price-plunge-2014-2016-and-why-it-failed-deliver-economic-impetus-eight-charts">commodities price slump</a>, reckless <a href="https://blogs.worldbank.org/africacan/will-procyclicality-override-ghanas-new-fiscal-responsibility-law">spending</a> in the lead up to often highly contested elections especially in 2012 and 2016, and a prolonged domestic electricity <a href="https://www.ogel.org/article.asp?key=3974">crisis</a> known locally as <em>'dumsor’</em>.</p><p>Ghana’s current external shocks are related to the <a href="https://www.imf.org/en/News/Articles/2022/07/13/pr22256-imf-staff-concludes-visit-to-ghana">COVID-19 pandemic</a> and Russia’s <a href="https://www.imf.org/en/News/Articles/2022/07/13/pr22256-imf-staff-concludes-visit-to-ghana">ongoing war</a> against Ukraine. Internally, the government has also recklessly managed its finances with excessive borrowing, resulting in a looming debt crisis. The country now <a href="https://mofep.gov.gh/sites/default/files/reports/economic/2021-Annual-Public-Debt-Report.pdf">spends</a> about a third (27%) of its expenditures in just servicing debt alone, not including principal repayments. This is often more than the <a href="https://mofep.gov.gh/sites/default/files/budget-statements/2022_Budget_Statement_v3.pdf">compensation of workers</a> on the government payroll, estimated at 26% of total expenditure in 2022.</p><h2><strong>The depth of Ghana’s mess</strong></h2><p>A review of recent economic data shows why it was inevitable that Ghana would seek IMF assistance.</p><p><a href="https://www.thebalance.com/what-is-real-gdp-how-to-calculate-it-vs-nominal-3306040">Real GDP</a> growth slowed from an average of 6.9% from 2017-2019 to 0.4% in 2020 during the pandemic but picked up to 4.7% in 2021. The <a href="https://mofep.gov.gh/sites/default/files/budget-statements/2022_Budget_Statement_v3.pdf">November 2021</a> forecast of 5.6% real growth in GDP in 2022 is likely to be lower because of rising price pressures. This is mainly driven by food and refined petroleum products due to the <a href="https://theconversation.com/ukraine-war-how-ghana-is-vulnerable-and-what-can-be-done-178528">Russia-Ukraine war</a> and global supply chain bottlenecks. Ghana’s inflation, as measured by a basket of goods and services, hit <a href="https://www.statsghana.gov.gh/gssmain/storage/img/marqueeupdater/CPI%20June%202022.pptx">29.8% in June 2022</a> - the highest level in 20 years.</p><div><hr></div><p><em><strong>Read more: <a href="https://theconversation.com/ukraine-war-how-ghana-is-vulnerable-and-what-can-be-done-178528">Ukraine war: how Ghana is vulnerable, and what can be done</a></strong></em></p><div><hr></div><p>Rising prices have <a href="https://www.bog.gov.gh/mpc_press_release/mpc-press-release-may-2022/">forced</a> the Bank of Ghana to raise its policy rate by 4.5 percentage points to 19% by May 2022 in an attempt to tame inflation. Commercial banks have in turn raised the rate at which they lend to businesses and individuals. The policy rate <a href="https://www.bog.gov.gh/monetary-policy/policy-rate-trends/">last</a> hit 20% in January 2018 and drastically reduced to 13.5% until the recent hikes started in November 2021. The unintended consequence of stemming inflation is a potential stifling of economic activity through crowding out of the private sector by the government and high cost of capital.</p><p>In addition, the local currency – the cedi – had depreciated by almost 20% against the US dollar as of <a href="https://allafrica.com/stories/202207040545.html">June 2022</a>, making imports more expensive, forcing prices of goods and services upwards.</p><p>Ghana’s economic challenges have been made worse by the country’s reliance on portfolio flows. This is the foreign money that moves in and out of countries in search of the best investment returns. Unlike money that builds factories, these flows are more sensitive to a country’s short-term economic and financial developments. Given Ghana’s significant borrowings from commercial rather than multilateral development financiers, the country has become more vulnerable to the rising cost of debt. Multilateral development institutions lend for longer at more reasonable rates.</p><div><hr></div><p><em><strong>Read more: <a href="https://theconversation.com/ghanas-debt-the-pros-and-cons-of-borrowing-abroad-versus-at-home-183660">Ghana's debt: the pros and cons of borrowing abroad versus at home</a></strong></em></p><div><hr></div><p>Of Ghana’s total <a href="https://www.bog.gov.gh/wp-content/uploads/2022/05/Summary-of-Economic-Financial-Data-May-2022.pdf">public debt</a> of US$55.1 billion (78% of GDP) as of March 2022, 40.2% (US$28.3 billion) was owed to external parties. And of the external debt, about 57% was owed to commercial creditors, predominantly in <a href="https://mofep.gov.gh/sites/default/files/reports/economic/2021-Annual-Public-Debt-Report.pdf">Eurobonds</a>.</p><p>To add salt to Ghana’s economic wounds, rating agencies <a href="https://www.fitchratings.com/research/sovereigns/correction-fitch-downgrades-ghana-to-b-outlook-negative-21-01-2022">downgraded</a> the country’s sovereign risk scores earlier this year. This significantly limited the governmet’s ability to borrow on the international capital markets to finance the budget.</p><p>Ghana’s fiscal policymaking has shown a <a href="https://blogs.worldbank.org/africacan/will-procyclicality-override-ghanas-new-fiscal-responsibility-law">bias</a> towards overspending during good times, with little being saved to help when there are downturns or external shocks.</p><p>This is largely driven by commodity price cycles - oil, cocoa and gold - and fiscal excesses during election periods. Ruling parties often overspend ahead of elections to buy votes and then tighten the purse strings afterwards.</p><div><hr></div><p><em><strong>Read more: <a href="https://theconversation.com/why-ghana-is-likely-to-go-on-needing-the-imf-however-difficult-the-relationship-119094">Why Ghana is likely to go on needing the IMF -- however difficult the relationship</a></strong></em></p><div><hr></div><p>So, what should Ghana differently this time round?</p><h2><strong>Way forward</strong></h2><p>The following could be a guide to ensure that Ghana benefits from its new deal with the IMF:</p><ul><li><p>First, Ghana should use the IMF programme to negotiate some debt restructuring with commercial and multilateral creditors. The country failed to take advantage of earlier <a href="https://www.worldbank.org/en/topic/debt/brief/covid-19-debt-service-suspension-initiative">schemes</a> like the Debt Service Suspension Initiative (DSSI). Debt restructuring would create the space to spend on priorities such as food and fuel. However, the country must urgently reinstate the Fiscal Responsibility Act, 2018 - which was suspended during the pandemic - with the 5% cap on fiscal deficits in any given year. It must also publish an updated medium-term debt management <a href="https://mofep.gov.gh/sites/default/files/reports/economic/Ghana%27s-2022-2026-Approved-PFM-Strategy.pdf">plan</a> that either caps or places a moratorium on the contraction of non-concessional loans for a while.</p></li><li><p>Second, Ghana must implement fully any agreed structural reforms to put the economy on a sound footing. This includes significant cuts in the largesse and waste in government and public service delivery. The President must cut the size of his government and enforce key performance targets for key socio-economic sectors such as public finances, education, energy, and health, among others. Other reforms should include the aggressive restructuring of <a href="https://ghanafinancialmarket.org/2022/01/31/ghana-state-owned-enterprises-record-gh%C2%A25-3-bln-us843-mln-losses-in-2020/">state-owned enterprises</a> and hiring of competent hands, removing of some, and improvements in the targeting of subsidies as well as trimming the government payroll and <a href="https://www.gna.org.gh/1.21437904">flagship initiatives</a> like free secondary schooling. The government must also insist on a strong social protection element, especially for cash transfer programmes such as <a href="https://leap.mogcsp.gov.gh/">Livelihood Empowerment Against Poverty (LEAP</a>) and capitation grants for public basic schools.</p></li><li><p>Thirdly, Ghana must aggressively grow and diversify its small open economy to reduce reliance on primary commodities such as cocoa, gold and oil. These are the major export earners for the country but are subject to significant price volatility. Ghana has a great opportunity to pursue green growth policies in new industrial clusters such as the <a href="https://eiti.org/sites/default/files/2022-06/FINAL%20REPORT_Ghana%20Critical%20Minerals_CLEAN_30.05.22.pdf">critical minerals</a> value chain and renewables. These can be supported by a reinvigorated Ghana Infrastructure Investment Fund <a href="https://www.mofep.gov.gh/economic%20reports/Ghana%20Infrastructure%20Investment%20Fund%20-%20%20Investment%20Policy%20Statement/2017-04-11">(GIIF)</a> and the Minerals Income Investment Fund <a href="https://thebftonline.com/2022/06/14/miif-to-become-most-important-lever-for-devt-ceo/">(MIIF)</a>, among other players.</p></li><li><p>Lastly, Ghanaians, especially the two main parties, must stop over politicising the economic issues. Populism is clouding effective decision-making. What the current crisis reveals again is the urgent need for broad-based national development plan or framework.</p></li><li><p>https://theconversation.com/ghanas-return-to-the-imf-within-three-years-underscores-its-deeper-economic-problems-187041</p></li></ul><p><strong>The Akufo-Addo government must urgently bring stability to the Ghanaian economy as a cost of living crisis has imposed hardship across sectors, triggering widespread protests in Accra. How will the government respond?</strong></p><p>Traders at Adum in the Ashanti Region on Monday 17 October jeered at President Akufo-Addo’s convoy while on his way to inspect construction works at the Kumasi Central Market.</p><p>A week earlier they had closed their shops to protest the fast depreciation of the cedi, rising inflation and high lending rates.</p><p><strong>READ MORE <a href="https://www.theafricareport.com/167200/ghana-with-the-weak-economy-experts-say-no-respite-in-sight-for-strikes/">Ghana: Weak economy, high cost of living will drive more strikes warn experts</a></strong></p><p>This incident from a region that has stayed loyal to the New Patriotic Party (NPP) highlights the frustrations caused by Ghana’s cost of living crisis.</p><h3><strong>‘Unprecedented situation’</strong></h3><p>Across Accra’s commercial hubs – Tudu, Abossey Okai, Okaishie, Makola and Rawlings Park – traders declared a 5-day protest, locking up their shops while idling around.</p><p>The country’s largest traders’ bloc, Ghana Union of Traders Association, says the protest is to force the government to “find innovative ways to deal with the free fall of the cedi”.</p><blockquote><p><em>I have been in this market for 10 years and in the space of three months I have seen price increment rates I have never seen before</em></p></blockquote><p>“This is an unprecedented situation. I have been in this market for 10 years and in the space of three months I have seen price increment rates I have never seen before,” Ernest Kojo Asante, a confectioneries wholesaler at Okaishie in Accra, tells <em>The Africa Report.</em></p><p>For him, keeping up with price changes from his suppliers has been a headache and he <strong>blames the downward spiral of the cedi against the US dollar.</strong></p><p>Africa Insight</p><p>Wake up to the essential with the Editor's picks.</p><p>Sign up</p><p>Also receive offers from The Africa Report</p><p>Also receive offers from The Africa Report's partners</p><p>Most of his products – biscuits, toffees, and chocolates are priced in dollars and are sourced from China, Turkey, Sri Lanka, US, and UK.</p><h3><strong>Worst performing currency in the world</strong></h3><p>The cedi is trading at GH¢15 to a dollar after depreciating by 9% within a week and 52% since the beginning of the year, according to <em>Bloomberg</em>, making it the worst performing currency in the world.</p><p>“A pack of soda cracker biscuits imported from China was GH¢14 on Monday and by Thursday has risen to GH¢18 all because our suppliers bought them in dollars. As a business owner, I have no option but to increase my prices accordingly,” Asante tells <em>The Africa Report. </em></p><p><strong>READ MORE <a href="https://www.theafricareport.com/187509/ghana-faces-tough-decisions-to-prop-up-africas-worst-performing-currency/">Ghana faces tough decisions to prop up Africa’s worst-performing currency</a></strong></p><p>At his shop, at least four customers had left without making a purchase because they could not afford the new prices.</p><p>“This is a daily phenomenon,” he says, pointing to the last customer as she leaves. “It has affected my sales and profit margins because <strong>customers come in and after telling them the price, they don’t buy</strong>.”</p><p>The cost of transporting products from the Tema port to the central business district has also added to the price hikes, and for Asante there is very little he can do about the situation.</p><p>“Nobody is in business to make losses so if we are going to come here to break even or lose, there is no need to open our shops. The government must urgently take action on the situation because things have taken a pretty bad turn,” he says.</p><h3><strong>Drivers also hit hard</strong></h3><p>Besides traders are the drivers, an important group in Ghana’s mobility-driven economy.</p><p>After a series of protests earlier this year, they have resolved to hike fares by an extra 40% to make up for the rising cost of fuel.</p><p><strong>READ MORE <a href="https://www.theafricareport.com/223990/five-questions-to-help-understand-the-impact-of-soaring-fuel-costs-in-africa/">Five questions to help understand the impact of soaring fuel costs in Africa</a></strong></p><p>At the Peace Rawlings Park cooperative society station in Accra central, Joseph Jesse and his colleague drivers are engaged in a heated debate over the depreciation of the cedi.</p><p>The closure of shops in the central business district has affected their work for the day, but the situation isn’t significantly different on a regular day.</p><blockquote><p><em>[…] our situation is dire because all our profits go into purchasing fuel. We basically work to lose.</em></p></blockquote><p>He tells <em>The Africa Report</em> that passengers seem to be finding alternative means of commuting besides taxis because of the new fares.</p><p>“As drivers, our situation is dire because all our profits go into purchasing fuel. We basically work to lose. In January fuel was about GH¢6 [$0.46] per litre but now we are paying GH¢13 per litre.”</p><p><strong>READ MORE <a href="https://www.theafricareport.com/152352/__trashed-52/">Ghana: Will pressure force the government to drop taxes on fuel prices?</a></strong></p><p>“We have increased our fares twice since the beginning of the year but the consistent fuel price hikes have erased our margins,” Jesse says.</p><p>He says the challenges of drivers aren’t limited to fuel prices. The depreciation of the cedi against the US dollar means that <strong>imported vehicle parts now cost a lot more.</strong></p><p>“Even our used tires cost more. For instance a 185/60/14 tire was GH¢60 around February but now it is GH¢110. If you get two flat tires, you’ll be in trouble,” he says.</p><p>A regular combustion engine oil, which was sold at GH¢80 per gallon (4 litres) earlier this year, is now GH¢140.</p><p>“We are just wasting our efforts because we make nothing,” Jesse says, hoping that fuel prices will drop to at least GH¢9 to make their jobs worthwhile.</p><h3><strong>Bleak situation for agriculture</strong></h3><p>In the agricultural sector, the situation looks bleak, according to Edward Kareweh who farms rice, sorghum, and maize.</p><p>Kareweh, who is also the secretary of the Ghana Agricultural Workers Union, says there’s an <strong>imminent food shortage in the country</strong> due to the prevailing circumstance.</p><p>“Farmers are now forced to reduce the acreage cultivated because it has become difficult. Agriculture is now a dreaded area and unfortunately this means yield per farm will be low this year,” he tells <em>The Africa Report</em>.</p><p><strong>READ MORE <a href="https://www.theafricareport.com/46233/agriculture-is-transformational-when-you-have-a-government-playing-its-role-william-asiko/">“Agriculture is transformational if government plays its role” – Asiko</a></strong></p><p>The downward spiral of the cedi against the dollar has led to a further increase in fertiliser prices caused by the Russia-Ukraine war.</p><p>According to Kareweh, some farmers are switching from growing maize – a staple food in Ghana – to sorghum because the latter requires less fertiliser.</p><blockquote><p><em>The government must seriously intervene in the agricultural sector.</em></p></blockquote><p>The result of this is a shortage of maize and consequently maize-based products like Kenkey which is now being sold at GH¢3 per ball from GH¢2 earlier this year.</p><p><strong>Post-harvest losses may increase as well</strong> because it is now more expensive to cart perishable products from farm gates into the markets.</p><p>“The government must seriously intervene in the agricultural sector. We need so much support because the current situation is really bad,” he says.</p><h3><strong>IMF deal?</strong></h3><p>President Akufo-Addo is looking to the IMF to secure a $3bn bailout before December to keep the economy on track but pressures on him to deliver has been enormous.</p><p><strong>READ MORE <a href="https://www.theafricareport.com/245459/hurdles-ahead-for-ghanas-plan-to-borrow-3bn-from-imf/">Ghana: Ofori-Atta asks for $3bn from IMF; risks split in ruling NPP</a></strong></p><p>The IMF’s last mission to Ghana concluded initial talks with authorities last and said “the discussions will continue in the weeks ahead, with a follow-up mission to take place expeditiously”.</p><p>https://www.theafricareport.com/252760/ghanas-worsening-economic-crisis-has-hit-an-unprecedented-situation-says-one-trader/</p><p></p><p>By <strong>Sherif Tarek</strong><br>Posted on Thursday, 13 October 2022 09:57</p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!CGqt!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fec86d8a1-4ee0-4f04-a88b-f3d2f2ad13bd_732x419.jpeg" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!CGqt!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fec86d8a1-4ee0-4f04-a88b-f3d2f2ad13bd_732x419.jpeg 424w, https://substackcdn.com/image/fetch/$s_!CGqt!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fec86d8a1-4ee0-4f04-a88b-f3d2f2ad13bd_732x419.jpeg 848w, https://substackcdn.com/image/fetch/$s_!CGqt!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fec86d8a1-4ee0-4f04-a88b-f3d2f2ad13bd_732x419.jpeg 1272w, https://substackcdn.com/image/fetch/$s_!CGqt!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fec86d8a1-4ee0-4f04-a88b-f3d2f2ad13bd_732x419.jpeg 1456w" sizes="100vw"><img src="https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/ec86d8a1-4ee0-4f04-a88b-f3d2f2ad13bd_732x419.jpeg" width="732" height="419" data-attrs="{"src":"https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/ec86d8a1-4ee0-4f04-a88b-f3d2f2ad13bd_732x419.jpeg","srcNoWatermark":null,"fullscreen":null,"imageSize":null,"height":419,"width":732,"resizeWidth":null,"bytes":null,"alt":"Ghana's President Nana Akufo-Addo","title":null,"type":null,"href":null,"belowTheFold":true,"topImage":false,"internalRedirect":null,"isProcessing":false,"align":null,"offset":false}" class="sizing-normal" alt="Ghana's President Nana Akufo-Addo" title="Ghana's President Nana Akufo-Addo" srcset="https://substackcdn.com/image/fetch/$s_!CGqt!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fec86d8a1-4ee0-4f04-a88b-f3d2f2ad13bd_732x419.jpeg 424w, https://substackcdn.com/image/fetch/$s_!CGqt!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fec86d8a1-4ee0-4f04-a88b-f3d2f2ad13bd_732x419.jpeg 848w, https://substackcdn.com/image/fetch/$s_!CGqt!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fec86d8a1-4ee0-4f04-a88b-f3d2f2ad13bd_732x419.jpeg 1272w, https://substackcdn.com/image/fetch/$s_!CGqt!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fec86d8a1-4ee0-4f04-a88b-f3d2f2ad13bd_732x419.jpeg 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><div class="pencraft pc-reset icon-container restack-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-refresh-cw"><path d="M3 12a9 9 0 0 1 9-9 9.75 9.75 0 0 1 6.74 2.74L21 8"></path><path d="M21 3v5h-5"></path><path d="M21 12a9 9 0 0 1-9 9 9.75 9.75 0 0 1-6.74-2.74L3 16"></path><path d="M8 16H3v5"></path></svg></div><div class="pencraft pc-reset icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></div></div></div></div></a><figcaption class="image-caption">Ghana's President Nana Akufo-Addo in Brest, France February 11, 2022. Ludovic Marin/Pool via REUTERS</figcaption></figure></div><p><strong>The months-long Ukraine war and other global headwinds have left Africa’s largest economies struggling with relentless fiscal pressures and default risks, with soaring yields on the continent barely reversing an exodus of non-resident investors to developed nations.</strong></p><p>“The backdrop of aggressive monetary policy tightening by central banks of advanced economies including the Fed (US Federal Reserve) together with growing risk-off sentiment amid concerns about a global recession is certainly unfavourable for African sovereign dollar bonds,” Virág Fórizs, Africa economist at the London-based Capital Economics, tells <em>The Africa Report</em>.</p><p><strong>READ MORE <a href="https://www.theafricareport.com/247999/debt-stress-climate-change-inflation-will-african-countries-weather-the-economic-storm/">Debt stress, climate change, inflation...Will African countries weather the economic storm?</a></strong></p><p>“In much of Sub-Saharan Africa, we expect Eurobond yields to rise further over the coming months. In <strong>Ghana and Kenya</strong> in particular, mounting investor concerns about balance of payments problems and public debt woes have weighed on sovereign dollar bonds in addition to the unfavourable global backdrop. Default risks are also high in <strong>Ethiopia</strong>, especially following the latest flare-up in the country’s internal conflict.”</p><p>To rein in a rampant inflation, Ghana and Kenya opted to hike interest rates to their highest levels in years, reaching 24.5% and 8.25% respectively. However, the ensuing higher borrowing cost did little to support their debt markets.</p><p>In September, Ghana’s 2026 eurobonds declined 2.5% to 59.30 cents on the US dollar, a record low according to <em>Bloomberg</em>, as the yield soared to 27.58%. Meanwhile, Kenya cancelled a KSh115bn ($982m) Eurobond sale last June after yields doubled to 12%.</p><p><strong>READ MORE <a href="https://www.theafricareport.com/247409/opec-production-cuts-may-add-additional-stress-to-african-oil-importers/">OPEC+ production cuts may add additional stress to African oil importers</a></strong></p><p>With the Russian-Ukraine war still ongoing and fuelling inflationary pressures on the US Fed to maintain monetary tightening through the first quarter of 2023, African nations’ financing needs are expected to be increasingly difficult to meet over the next months.</p><h3><strong>Ghana next in defaulting line?</strong></h3><p>While drought-stricken Kenya and war-plagued Ethiopia are in the danger zone, Ghana is earmarked to be Africa’s second defaulter after Zambia, which defaulted on its debts in November 2020, says Thea Fourie, Head of Sub-Saharan Africa Insights and Analysis, Economics & Country risk at IHS Markit.</p><p><strong>READ MORE <a href="https://www.theafricareport.com/245521/nigeria-ghana-senegal-indias-export-restrictions-complicate-rice-supply/">Nigeria, Ghana, Senegal: India's export restrictions complicate rice supply</a></strong></p><p>“We’ve seen a lot of bad news coming out of Ghana, we’ve seen large credit agencies downgrading Ghana the past few weeks; Fitch [Ratings] was the latest” after Moody’s and Standard and Poor’s, she tells <em>The Africa Report</em>.</p><p>Africa Insight</p><p>Wake up to the essential with the Editor's picks.</p><p>Sign up</p><p>Also receive offers from The Africa Report</p><p>Also receive offers from The Africa Report's partners</p><p>Before recovering from the grave ramifications of the pandemic, Ghana’s fiscal health took a further turn for the worse on the back of the Russia-Ukraine war. The gold-rich nation’s cedi has depreciated around 40% this year, and its total public debt reached 77% of GDP last May.</p><p><strong>READ MORE <a href="https://www.theafricareport.com/243878/ghana-crackdown-on-black-market-may-not-halt-cedis-fall/">Ghana: Crackdown on black market may not halt cedi’s fall</a></strong></p><p>The external debt of the West African country constituted <strong>40% of GDP</strong> as of May, which Fórizs brands a “sizeable” load on its coffers.</p><h3><strong>Ballooning debts all over Africa</strong></h3><p>To a lesser extent, international and domestic factors have intensified simmering financial pressures on <strong>Nigeria</strong>, including its fuel subsidy that is expected to amount to $9.6bn this year, says Fourie, who is based in South Africa’s Centurion.</p><p>“This is a country that still has quite sufficient foreign reserve holdings, but things in Nigeria are really unravelling,” she says. “This high subsidy burden that they have for fuel is really putting a lot of strain on the fiscal finances,” not to mention its declining oil output that recently plunged below the 1mn-bpd mark amid recurring vandals and depleted infrastructure, Fourie adds.</p><p><strong>READ MORE <a href="https://www.theafricareport.com/240170/nigeria-may-trail-behind-africas-new-top-oil-exporter-angola/">Nigeria may trail behind Africa’s new top oil exporter Angola</a></strong></p><p>Other African nations rated in the ‘CCC’ category, including <strong>Congo, Mozambique, and Tunisia</strong>, face a “real possibility” of default, says Jan Friederich, head of Middle East and Africa sovereign ratings at Fitch.</p><p>“The Republic of Congo, which we recently upgraded to CCC+ as it benefits considerably from the surge in oil prices, still struggles from very high oil dependence and weak debt management,” he tells <em>The Africa Report</em>. “Mozambique, like Congo, has a track record of a recent default.”</p><h3><strong>Domestic banks may be at risk</strong></h3><p>With non-resident investors unlikely to make a comeback any time soon, heavily indebted nations in Africa have been ramping up domestic borrowing to fill their financing gaps. Last June, Kenya decided to borrow from local commercial banks after cancelling its Eurobond issuance.</p><p><strong>READ MORE <a href="https://www.theafricareport.com/247233/kenyas-budget-headache-as-domestic-borrowing-hits-a-snag/">Kenya’s budget headache as domestic borrowing hits a snag</a></strong></p><p>“Banks in Africa can meet the increasing demand from government securities issuance as they are very liquid,” Mahin Dissanayake, senior director and head of African bank ratings at Fitch, <em>tells The Africa Report</em>.</p><blockquote><p><em>As sovereign debt sustainability risks rise in Africa, there is the increased risk that local currency government securities can be part of a broader sovereign debt restructuring.</em></p></blockquote><p>“They have large customer deposit bases and annual deposit growth is generally healthy. These customer deposits are low cost and stable and need to be deployed in assets, and typically end up in government securities.</p><p>“As a proportion of total assets, African banks’ (excluding South Africa) loan books are relatively small – typically below 50% of total assets. So there is the capacity for banks to hold more government securities.”</p><p>However, debt restructuring schemes might prove perilous for African banks that could end up incurring losses on behalf of their governments.</p><p>“As sovereign debt sustainability risks rise in Africa, there is the increased risk that local currency government securities can be part of a broader sovereign debt restructuring,” Dissanayake says. “In this worst case scenario, if banks were made to book large losses on their local currency government securities, this increases solvency risks for banks and ultimately lead to their failure.”</p><h3><strong>Ghana’s precarious banking sector</strong></h3><p>Seeking to secure a $3bn IMF deal before the end of the current year, Ghana is tipped to embark on debt restructuring, which might have bittersweet results.</p><p><strong>READ MORE <a href="https://www.theafricareport.com/245287/can-ghana-secure-an-imf-deal-in-three-months/">Can Ghana secure an IMF deal in three months?</a></strong></p><p>“While restructuring domestic debt could lower Ghana’s overall debt service bill, it would hurt the economy,” says Fórizs. “The banking sector holds <strong>half of the country’s domestic debt</strong> and would be hit by such a restructuring. Their balance sheets would shrink, causing credit conditions to tighten.</p><p>“We doubt that policymakers in Ghana would really want to inflict such pain on the economy and, instead, will probably try to push debt haircuts onto external creditors,” adds the Capital Economics analyst.</p><p>The fact that Ghana is rated ‘CC’ means its banks hold securities in a low-rated sovereign, which increases their overall risk profile, points out Fitch’s Dissanayake.</p><p>“A restructuring of Ghana’s local currency sovereign debt (depending on the materiality of losses booked) could significantly affect the banks’ solvency,” he says. “This will be compounded by heightened market risks and the effect of weak operating conditions on private-sector credit quality.”</p><h3><strong>Benchmark: Zambia</strong></h3><p>Last August, the IMF approved a $1.3bn, three-year facility to Zambia, which is poised to restructure its debts soon.</p><p>How the Fund’s programme and debt restructuring plays out in the southern African country will indicate the trajectories of Ghana and Kenya, which signed a $2.34bn IMF agreement in April 2021, should they kick off similar schemes, according to IHS Markit’s Fourie.</p><p>“You could have a bit of a positive sentiment on the back of those … agreements coming into play,” she says. “I would use Zambia as a benchmark on how this can progress. If you look at what’s been happening in Zambia, the kwacha exchange rate [is] actually doing very well on the back of this IMF support programme and the prospect of debt restructuring.</p><p><strong>READ MORE <a href="https://www.theafricareport.com/226572/lessons-from-zambias-debt-restructuring/">Lessons from Zambia’s debt restructuring</a></strong></p><p>“But if you look at the 10-year yield, for instance, I have not seen a significant improvement … they’re still reflecting the current weak debt fundamentals. So I think that will probably be the same trajectory for Ghana and Kenya.”</p><p>Zambia, whose debt reached 133% of GDP at the end of last year, is pushing for debt relief, saying this month that a present value reduction of $6.3bn, comprising 49% of its external debt, is required by 2027 to fulfil the IMF targets, according to Reuters.</p><p>“Until it’s finalised and there’s a clear roadmap for investors ahead; what the debt trajectory is going to look like post G20 Common Framework for restructuring debt probably you could see debts coming down,” Fourie says.</p><p>https://www.theafricareport.com/252760/ghanas-worsening-economic-crisis-has-hit-an-unprecedented-situation-says-one-trader/</p><p></p><p></p><p></p><p>On any given weekend in South Africa there’s the smell of shisa nyama -- the Zulu term for traditional barbecues -- wafting across cities, townships and rural locations.</p><p>But the cost of the typical fare that makes up a shisa nyama is rising faster than official inflation, highlighting the stark reality that low-income earners are suffering the most in South Africa — one of the world’s most unequal nations.</p><p>Bloomberg’s new Shisa Nyama Index shows the average price of a backyard barbecue in the likes of Soweto, a Black township on the outskirts of Johannesburg, jumped 11% from a year ago. That compares with a 7.6% year-on-year increase in <a href="https://www.bloomberg.com/news/terminal/RJZQEOT0G1KZ">consumer prices</a> in October, as measured by Statistics South Africa. </p><p>Crunching data from the <a href="https://pmbejd.org.za/">Pietermaritzburg Economic Justice and Dignity </a>group, the index tracks the prices of some of the key ingredients in a shisa nyama — corn meal, onions, carrots, tomatoes, curry powder, salt, frozen chicken portions, beef and wors — a type of sausage made from a variety of ground meat offcuts.</p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!-prx!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F3bb966d9-a61d-468b-923b-2619a3df83f7_600x300.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!-prx!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F3bb966d9-a61d-468b-923b-2619a3df83f7_600x300.png 424w, https://substackcdn.com/image/fetch/$s_!-prx!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F3bb966d9-a61d-468b-923b-2619a3df83f7_600x300.png 848w, https://substackcdn.com/image/fetch/$s_!-prx!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F3bb966d9-a61d-468b-923b-2619a3df83f7_600x300.png 1272w, https://substackcdn.com/image/fetch/$s_!-prx!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F3bb966d9-a61d-468b-923b-2619a3df83f7_600x300.png 1456w" sizes="100vw"><img src="https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/3bb966d9-a61d-468b-923b-2619a3df83f7_600x300.png" width="600" height="300" data-attrs="{"src":"https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/3bb966d9-a61d-468b-923b-2619a3df83f7_600x300.png","srcNoWatermark":null,"fullscreen":null,"imageSize":null,"height":300,"width":600,"resizeWidth":null,"bytes":null,"alt":"relates to Backyard Beef Barbecue Costs Soar, Hurting South Africa’s Poor","title":null,"type":null,"href":null,"belowTheFold":true,"topImage":false,"internalRedirect":null,"isProcessing":false,"align":null,"offset":false}" class="sizing-normal" alt="relates to Backyard Beef Barbecue Costs Soar, Hurting South Africa’s Poor" title="relates to Backyard Beef Barbecue Costs Soar, Hurting South Africa’s Poor" srcset="https://substackcdn.com/image/fetch/$s_!-prx!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F3bb966d9-a61d-468b-923b-2619a3df83f7_600x300.png 424w, https://substackcdn.com/image/fetch/$s_!-prx!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F3bb966d9-a61d-468b-923b-2619a3df83f7_600x300.png 848w, https://substackcdn.com/image/fetch/$s_!-prx!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F3bb966d9-a61d-468b-923b-2619a3df83f7_600x300.png 1272w, https://substackcdn.com/image/fetch/$s_!-prx!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F3bb966d9-a61d-468b-923b-2619a3df83f7_600x300.png 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><div class="pencraft pc-reset icon-container restack-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-refresh-cw"><path d="M3 12a9 9 0 0 1 9-9 9.75 9.75 0 0 1 6.74 2.74L21 8"></path><path d="M21 3v5h-5"></path><path d="M21 12a9 9 0 0 1-9 9 9.75 9.75 0 0 1-6.74-2.74L3 16"></path><path d="M8 16H3v5"></path></svg></div><div class="pencraft pc-reset icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></div></div></div></div></a><figcaption class="image-caption">Bloomberg</figcaption></figure></div><p>To compile its <a href="https://pmbejd.org.za/wp-content/uploads/2022/11/October-2022-Household-Affordability-Index-PMBEJD_31102022.pdf">survey</a>, the PMBEJD’s data collectors track food prices on the shelves of 44 supermarkets and 30 butcheries that target the low-income market in the greater areas of Johannesburg, Durban, Cape Town, Pietermaritzburg and the northwestern town of Springbok.</p><p>Sponsored Content</p><p><strong><a href="https://sponsored.bloomberg.com/article/Workday/How-Finance-Leaders-Are-Navigating-Dramatic-Change">Why Finance and IT Must Partner to Drive Added Business Value</a></strong></p><p><strong><a href="https://sponsored.bloomberg.com/article/Workday/How-Finance-Leaders-Are-Navigating-Dramatic-Change">Workday</a></strong></p><p>The index is a window on the impact of inflation on South Africa’s most vulnerable consumers, with even just the cost of onions rising faster than the price of fuel. The eye-watering vegetable’s price rose 23% month-on-month and has climbed 78% in a year. Over the 12 months, the cost of diesel increased 53%. </p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!U8Lx!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fb47ddf82-d8b1-46e3-abaf-f6dc0b086874_600x780.jpeg" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!U8Lx!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fb47ddf82-d8b1-46e3-abaf-f6dc0b086874_600x780.jpeg 424w, https://substackcdn.com/image/fetch/$s_!U8Lx!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fb47ddf82-d8b1-46e3-abaf-f6dc0b086874_600x780.jpeg 848w, https://substackcdn.com/image/fetch/$s_!U8Lx!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fb47ddf82-d8b1-46e3-abaf-f6dc0b086874_600x780.jpeg 1272w, https://substackcdn.com/image/fetch/$s_!U8Lx!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fb47ddf82-d8b1-46e3-abaf-f6dc0b086874_600x780.jpeg 1456w" sizes="100vw"><img src="https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/b47ddf82-d8b1-46e3-abaf-f6dc0b086874_600x780.jpeg" width="600" height="780" data-attrs="{"src":"https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/b47ddf82-d8b1-46e3-abaf-f6dc0b086874_600x780.jpeg","srcNoWatermark":null,"fullscreen":null,"imageSize":null,"height":780,"width":600,"resizeWidth":null,"bytes":null,"alt":"relates to Backyard Beef Barbecue Costs Soar, Hurting South Africa’s Poor","title":null,"type":null,"href":null,"belowTheFold":true,"topImage":false,"internalRedirect":null,"isProcessing":false,"align":null,"offset":false}" class="sizing-normal" alt="relates to Backyard Beef Barbecue Costs Soar, Hurting South Africa’s Poor" title="relates to Backyard Beef Barbecue Costs Soar, Hurting South Africa’s Poor" srcset="https://substackcdn.com/image/fetch/$s_!U8Lx!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fb47ddf82-d8b1-46e3-abaf-f6dc0b086874_600x780.jpeg 424w, https://substackcdn.com/image/fetch/$s_!U8Lx!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fb47ddf82-d8b1-46e3-abaf-f6dc0b086874_600x780.jpeg 848w, https://substackcdn.com/image/fetch/$s_!U8Lx!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fb47ddf82-d8b1-46e3-abaf-f6dc0b086874_600x780.jpeg 1272w, https://substackcdn.com/image/fetch/$s_!U8Lx!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fb47ddf82-d8b1-46e3-abaf-f6dc0b086874_600x780.jpeg 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><div class="pencraft pc-reset icon-container restack-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-refresh-cw"><path d="M3 12a9 9 0 0 1 9-9 9.75 9.75 0 0 1 6.74 2.74L21 8"></path><path d="M21 3v5h-5"></path><path d="M21 12a9 9 0 0 1-9 9 9.75 9.75 0 0 1-6.74-2.74L3 16"></path><path d="M8 16H3v5"></path></svg></div><div class="pencraft pc-reset icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></div></div></div></div></a><figcaption class="image-caption">Papa Ron’s Shisa Nyama restaurant in the Woodstock area of Cape Town, South Africa.Photographer: Renee Bonorchis/Bloomberg</figcaption></figure></div><p>“For 10 kilograms of onions I now pay 120 rand ($7), where it used to be between 39 and 50 rand and I don’t know why, it’s not like they’re coming from Russia,” said Oyama Ndaliso, who owns <a href="https://paparonsshisanyama.com/">Papa Ron’s Shisa Nyama</a> in Woodstock, a low-income suburb in Cape Town. “In the store, I now have to have two sizes of stews for sale because people can’t afford as much, so they’re going for smaller portions.”</p><p>The surge in South African living costs is exacerbating public anger over record power cuts, rampant unemployment and poverty. It raises the risk of a repeat of deadly riots that erupted in two provinces last year and claimed 354 lives.</p><p>“Inflation always has the biggest impact on the poor,” said Frank Blackmore, lead economist at KPMG. “The reason for that is they don’t have options in terms of delaying expenditure. Most of the income that’s earned by the poor is required for immediate consumption. That is one contributor to what could be an unrest sort of situation at some point.”</p><p>The total cost of buying all of the supplies in bulk to prepare a shisa nyama for friends and family has risen 24% to 1,756 rand, from 1,414 rand in January 2021. While that number may seem cheap after a currency conversion, it’s best compared to South Africa’s national minimum wage, which would have had a general worker earning 3,895.92 rand in October, according to the PMBEJD survey.</p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!e-6Y!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F3db0f39a-6885-48da-8718-3b8241a3df8f_600x300.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!e-6Y!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F3db0f39a-6885-48da-8718-3b8241a3df8f_600x300.png 424w, https://substackcdn.com/image/fetch/$s_!e-6Y!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F3db0f39a-6885-48da-8718-3b8241a3df8f_600x300.png 848w, https://substackcdn.com/image/fetch/$s_!e-6Y!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F3db0f39a-6885-48da-8718-3b8241a3df8f_600x300.png 1272w, https://substackcdn.com/image/fetch/$s_!e-6Y!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F3db0f39a-6885-48da-8718-3b8241a3df8f_600x300.png 1456w" sizes="100vw"><img src="https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/3db0f39a-6885-48da-8718-3b8241a3df8f_600x300.png" width="600" height="300" data-attrs="{"src":"https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/3db0f39a-6885-48da-8718-3b8241a3df8f_600x300.png","srcNoWatermark":null,"fullscreen":null,"imageSize":null,"height":300,"width":600,"resizeWidth":null,"bytes":null,"alt":"relates to Backyard Beef Barbecue Costs Soar, Hurting South Africa’s Poor","title":null,"type":null,"href":null,"belowTheFold":true,"topImage":false,"internalRedirect":null,"isProcessing":false,"align":null,"offset":false}" class="sizing-normal" alt="relates to Backyard Beef Barbecue Costs Soar, Hurting South Africa’s Poor" title="relates to Backyard Beef Barbecue Costs Soar, Hurting South Africa’s Poor" srcset="https://substackcdn.com/image/fetch/$s_!e-6Y!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F3db0f39a-6885-48da-8718-3b8241a3df8f_600x300.png 424w, https://substackcdn.com/image/fetch/$s_!e-6Y!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F3db0f39a-6885-48da-8718-3b8241a3df8f_600x300.png 848w, https://substackcdn.com/image/fetch/$s_!e-6Y!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F3db0f39a-6885-48da-8718-3b8241a3df8f_600x300.png 1272w, https://substackcdn.com/image/fetch/$s_!e-6Y!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F3db0f39a-6885-48da-8718-3b8241a3df8f_600x300.png 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><div class="pencraft pc-reset icon-container restack-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-refresh-cw"><path d="M3 12a9 9 0 0 1 9-9 9.75 9.75 0 0 1 6.74 2.74L21 8"></path><path d="M21 3v5h-5"></path><path d="M21 12a9 9 0 0 1-9 9 9.75 9.75 0 0 1-6.74-2.74L3 16"></path><path d="M8 16H3v5"></path></svg></div><div class="pencraft pc-reset icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></div></div></div></div></a><figcaption class="image-caption">Bloomberg</figcaption></figure></div><p>To adapt and cling on to customers, retailers like South Africa’s Pick n Pay Stores Ltd. plan to more than double the pace of low-cost food and clothing-store openings in the next year. It’s the same sort of strategy as Shoprite Holdings Ltd., Africa’s largest and typically low-cost supermarket chain, which has been investing in local stores to battle increased competition.</p><p>Ndaliso, who started his shisa nyama outlet during the worst of the coronavirus pandemic and is now starting to break even, has had to innovate and find new markets to survive.</p><p>“Fortunately we got signed up to Uber Eats,” he said. “Shisa nyama is very in demand and people on holiday here are ordering from their hotels. Covid did well for me because I had no choice. I was retrenched, so I took all my money and opened this restaurant. That was brave -- it was my last money.”</p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!CVQM!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fe5b87d34-e302-49c8-a7a4-e08046e71b2f_600x399.jpeg" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!CVQM!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fe5b87d34-e302-49c8-a7a4-e08046e71b2f_600x399.jpeg 424w, https://substackcdn.com/image/fetch/$s_!CVQM!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fe5b87d34-e302-49c8-a7a4-e08046e71b2f_600x399.jpeg 848w, https://substackcdn.com/image/fetch/$s_!CVQM!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fe5b87d34-e302-49c8-a7a4-e08046e71b2f_600x399.jpeg 1272w, https://substackcdn.com/image/fetch/$s_!CVQM!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fe5b87d34-e302-49c8-a7a4-e08046e71b2f_600x399.jpeg 1456w" sizes="100vw"><img src="https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/e5b87d34-e302-49c8-a7a4-e08046e71b2f_600x399.jpeg" width="600" height="399" data-attrs="{"src":"https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/e5b87d34-e302-49c8-a7a4-e08046e71b2f_600x399.jpeg","srcNoWatermark":null,"fullscreen":null,"imageSize":null,"height":399,"width":600,"resizeWidth":null,"bytes":null,"alt":"relates to Backyard Beef Barbecue Costs Soar, Hurting South Africa’s Poor","title":null,"type":null,"href":null,"belowTheFold":true,"topImage":false,"internalRedirect":null,"isProcessing":false,"align":null,"offset":false}" class="sizing-normal" alt="relates to Backyard Beef Barbecue Costs Soar, Hurting South Africa’s Poor" title="relates to Backyard Beef Barbecue Costs Soar, Hurting South Africa’s Poor" srcset="https://substackcdn.com/image/fetch/$s_!CVQM!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fe5b87d34-e302-49c8-a7a4-e08046e71b2f_600x399.jpeg 424w, https://substackcdn.com/image/fetch/$s_!CVQM!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fe5b87d34-e302-49c8-a7a4-e08046e71b2f_600x399.jpeg 848w, https://substackcdn.com/image/fetch/$s_!CVQM!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fe5b87d34-e302-49c8-a7a4-e08046e71b2f_600x399.jpeg 1272w, https://substackcdn.com/image/fetch/$s_!CVQM!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fe5b87d34-e302-49c8-a7a4-e08046e71b2f_600x399.jpeg 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><div class="pencraft pc-reset icon-container restack-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-refresh-cw"><path d="M3 12a9 9 0 0 1 9-9 9.75 9.75 0 0 1 6.74 2.74L21 8"></path><path d="M21 3v5h-5"></path><path d="M21 12a9 9 0 0 1-9 9 9.75 9.75 0 0 1-6.74-2.74L3 16"></path><path d="M8 16H3v5"></path></svg></div><div class="pencraft pc-reset icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></div></div></div></div></a><figcaption class="image-caption">Betty DavigoPhotographer: Renee Bonorchis/Bloomberg</figcaption></figure></div><p>Betty Davigo, 42, works in the John Vul’iGate African Food Restaurant in <a href="https://en.wikipedia.org/wiki/Imizamo_Yethu">Imizamo Yethu</a>, an informal settlement in Hout Bay, south of Cape Town’s city center. Everything is more expensive and the restaurant has far fewer customers than it did just a few months ago, Davigo said. As a consumer, she’s also struggling and said she’s buying less for her house, having had to cut out so-called luxuries like peanut butter.</p><p>Sponsored Content</p><p><strong><a href="https://sponsored.bloomberg.com/article/targeting-net-zero-you-need-to-start-with-product-design">Targeting Net Zero? Not Without Sustainable Product Design</a></strong></p><p><strong><a href="https://sponsored.bloomberg.com/article/targeting-net-zero-you-need-to-start-with-product-design">Capgemini</a></strong></p><p>The biggest monthly increase after onions was in the price of cooking oil, which climbed 45%. Other items that rose more than 10% month-on-month included corn meal, samp (made from ground corn kernels) and spinach.</p><p>https://www.bloomberg.com/news/articles/2022-11-25/south-africa-shisa-nyama-ingredient-costs-rise-as-inflation-hurts-poor?sref=wOrDP8KX</p><p>https://www.bloomberg.com/news/articles/2022-11-25/gold-miners-ordered-to-sell-20-of-refined-bullion-to-ghana?sref=wOrDP8KX</p><p></p><p>https://www.bloomberg.com/news/articles/2022-08-26/why-ghana-went-from-hero-to-zero-for-investors-quicktake?sref=wOrDP8KX</p><h1>Why Ghana Went From Hero to Zero for Investors</h1><p>By</p><p><a href="https://www.bloomberg.com/authors/AQhfZy4g8GM/ekow-dontoh">Ekow Dontoh</a></p><p>August 26, 2022 at 12:00 AM EDT<em>Updated onNovember 25, 2022 at 6:12 AM EST</em></p><p>From</p><h2>Listen to this article</h2><p>5:00</p><h2>Share this article</h2><p>Follow the authors</p><p><a href="https://www.twitter.com/Ekowmoses">@Ekowmoses</a></p><p>+ Get alerts forEkow Dontoh</p><h2>In this article</h2><p><a href="https://www.bloomberg.com/quote/CL1:COM">CL1</a></p><p><strong><a href="https://www.bloomberg.com/quote/CL1:COM">WTI Crude</a></strong></p><p><a href="https://www.bloomberg.com/quote/CL1:COM">77.62</a></p><p><a href="https://www.bloomberg.com/quote/CL1:COM">USD/bbl.</a></p><p><a href="https://www.bloomberg.com/quote/CL1:COM">-0.32-0.41%</a></p><p><a href="https://www.bloomberg.com/quote/GC1:COM">GC1</a></p><p><strong><a href="https://www.bloomberg.com/quote/GC1:COM">Gold</a></strong></p><p><a href="https://www.bloomberg.com/quote/GC1:COM">1,765.90</a></p><p><a href="https://www.bloomberg.com/quote/GC1:COM">USD/t oz.</a></p><p><a href="https://www.bloomberg.com/quote/GC1:COM">+5.50+0.31%</a></p><p>Ghana is learning the hard way why oil can be a blessing and a curse. The onset of commercial crude production helped turn the West African nation into one of the continent’s top investment destinations, but also prompted successive governments to borrow to the hilt. Skittish investors <a href="https://www.bloomberg.com/news/articles/2022-08-18/history-shows-ghana-cedi-s-fall-may-extend-even-after-rate-hike">offloaded</a> Ghana’s bonds and currency, the cedi, amid doubts over its ability to settle its debts. The concern proved to be well-founded: In late November, the government said international bond holders would be asked to <a href="https://www.bloomberg.com/news/articles/2022-11-24/ghana-proposes-losses-for-eurobond-holders-in-debt-restructure">accept losses</a> of as much as 30% on their principal loans and forgo some interest as it tries to secure a $3 billion loan from the International Monetary Fund. </p><h3>1. Why was Ghana so popular among investors?</h3><p>The first sub-Saharan African nation to gain independence after colonial rule, Ghana has been a bastion of stability in a region plagued by civil unrest and coups. Peaceful <a href="https://www.bloomberg.com/news/articles/2021-03-04/ghana-supreme-court-upholds-nana-akufo-addo-s-election-win-kluum3ik">elections</a> have been held regularly since the 1990s, power has changed hands between rival parties and presidents, and there is an independent judiciary and a vibrant parliament. The world’s second-biggest grower of cocoa and Africa’s No. 2 gold producer, Ghana began exporting oil in late 2010. The following year, gross domestic product leaped by almost 14%. The economy has expanded every year since then, albeit at a more modest pace, with the government’s embrace of a free-market system helping to lure foreign capital and financing. </p><h3>2. So what went wrong?</h3><p>The government abandoned fiscal discipline and opened the spending taps in anticipation of an <a href="https://www.bloomberg.com/news/articles/2017-07-13/ghana-oil-boon-insufficient-to-plug-budget-hole-as-prices-drop">oil windfall</a>. But energy revenue wasn’t enough to cover a succession of expensive flagship projects, and it borrowed more to plug the gap. Overspending was particularly rife in election years. President Nana Akufo-Addo’s administration has scrapped fees for senior high school students. In 2021, the government spent $1 billion on refinancing loans owed by private power producers, a move that was intended to reduce the state’s electricity bills. A plan to strengthen a banking industry weakened by bad loans has cost more than 25 billion cedis ($1.7 billion), and an estimated 8 billion cedis more is needed to complete the process. Covid-19 dealt a further blow to the state’s already <a href="https://www.bloomberg.com/news/articles/2022-08-30/ghana-missed-out-on-2-9-billion-in-2021-over-irregularities">stretched finances</a>. After selling eurobonds for each of the previous nine years, Ghana was shut out of international capital markets in 2022 as investors lost faith in its ability to service its loans. The government shunned an initiative that would have enabled it to suspend interest payments and vowed not to ask for further support from the IMF, before changing its tune in July 2022. </p><h3>3. What precipitated the debt restructuring?</h3><p>The latest in global politicsGet insight from reporters around the world in the Balance of Power newsletter.Sign up to this newsletter</p><p>State debt ballooned to 467.4 billion cedis at the end of September, representing 75.9% of GDP, up from 68.3% five years earlier. When it could no longer tap international markets, the government resorted to taking out domestic loans, paying annual interest rates of almost 30%. The central bank stepped in to provide the government with funding after it risked defaulting on the local debt, but it plans to limit further support to stay within its legal lending threshold. Lawmakers want Finance Minister Ken Ofori-Atta to take the fall for the economic crisis and have called for his dismissal. </p><h3>4. How have investors responded to the meltdown?</h3><p>There’s been an exodus from the currency and <a href="https://www.bloomberg.com/news/terminal/RF0FEBT1UM0Y">bond markets</a>. The cedi’s decline of more than 57% between January and late November 2022 made it the world’s <a href="https://www.bloomberg.com/news/articles/2022-10-20/ghana-s-cedi-extends-world-beating-loss-on-debt-talk-worries">worst performer</a>. The premium investors demand to hold the country’s dollar bonds rather than US Treasuries exceeds 3,000 basis points, well above the 1,000 level that signals distress. Fitch Ratings downgraded its assessment of Ghanaian credit to four levels below investment grade in September, the third cut in 2022.</p><h3>5. What are the authorities doing to address the situation?</h3><p>In late October, Akufo-Addo <a href="https://www.bloomberg.com/news/articles/2022-10-30/ghana-leader-rules-out-debt-haircuts-in-move-to-stem-cedi-slide">dismissed speculation</a> that an IMF funding deal could translate into losses for any of Ghana’s creditors, but his administration changed course a month later and said it would enter into restructuring negotiations. In addition to the planned debt haircut, the government was also pushing for a suspension of interest payments on foreign bonds for three years, according to Deputy Minister of Finance John Kumah. Domestic debt investors would be asked to exchange existing securities for new ones that may offer a zero coupon in the first year, 5% in the second and 10% in the third. The president has pledged to restore financial discipline by reducing total public debt to 55% of gross domestic product by 2028 and peg external debt-servicing costs to no more than 18% of annual revenue by that year. The Bank of Ghana <a href="https://www.bloomberg.com/news/articles/2022-10-06/ghana-hikes-rates-again-to-curb-fastest-inflation-in-two-decades">raised its key lending rate</a> by 10 percentage points to 24.5% in the first 10 months of 2022 to support the currency and help tame runaway inflation. Ghana’s vice president, Mahamudu Bawumia, announced that the government is considering using gold to buy oil products to stem demand for foreign exchange and support the cedi. </p><h3>The Reference Shelf</h3><ul><li><p>A QuickTake on the <a href="https://www.bloomberg.com/news/articles/2022-02-04/why-poor-nations-now-face-a-pandemic-debt-crunch-quicktake">debt crunch</a> confronting poor nations.</p></li><li><p>Bloomberg Opinion’s David Fickling <a href="https://www.bloomberg.com/opinion/articles/2021-04-07/nigeria-s-oil-curse-could-become-an-opportunity-for-renewable-power">writes</a> about how Nigeria’s oil curse could become an opportunity.</p></li><li><p>Bloomberg stories on Ghana’s <a href="https://www.bloomberg.com/news/articles/2022-11-24/ghana-proposes-losses-for-eurobond-holders-in-debt-restructure">restructuring plans</a> and the central bank’s <a href="https://www.bloomberg.com/news/articles/2022-10-06/ghana-hikes-rates-again-to-curb-fastest-inflation-in-two-decades">response</a> to surging inflation.</p></li><li><p>The IMF’s <a href="https://www.imf.org/en/Countries/GHA">home page</a> on Ghana.</p></li></ul><h1>Gold Miners Ordered to Sell 20% of Refined Bullion to Ghana</h1><ul><li><p>Ghana will buy gold from companies in domestic currency</p></li><li><p>Cedi dropped 57% this year, making it world’s worst performer</p></li></ul><p>By</p><p><a href="https://www.bloomberg.com/authors/AQhfZy4g8GM/ekow-dontoh">Ekow Dontoh</a></p><p>November 25, 2022 at 6:31 AM EST<em>Updated onNovember 25, 2022 at 11:10 AM EST</em></p><h2>Share this article</h2><p>Follow the authors</p><p><a href="https://www.twitter.com/Ekowmoses">@Ekowmoses</a></p><p>+ Get alerts forEkow Dontoh</p><h2>In this article</h2><p><a href="https://www.bloomberg.com/quote/GC1:COM">GC1</a></p><p><strong><a href="https://www.bloomberg.com/quote/GC1:COM">Gold</a></strong></p><p><a href="https://www.bloomberg.com/quote/GC1:COM">1,766.20</a></p><p><a href="https://www.bloomberg.com/quote/GC1:COM">USD/t oz.</a></p><p><a href="https://www.bloomberg.com/quote/GC1:COM">+5.80+0.33%</a></p><p><a href="https://www.bloomberg.com/quote/1936085D:US">1936085D</a></p><p><strong><a href="https://www.bloomberg.com/quote/1936085D:US">MARKETING CO/THE</a></strong></p><p><a href="https://www.bloomberg.com/quote/1936085D:US">Private Company</a></p><p><a href="https://www.bloomberg.com/quote/ANG:SJ">ANG</a></p><p><strong><a href="https://www.bloomberg.com/quote/ANG:SJ">ANGLOGOLD ASHANT</a></strong></p><p><a href="https://www.bloomberg.com/quote/ANG:SJ">31,750.00</a></p><p><a href="https://www.bloomberg.com/quote/ANG:SJ">ZAr</a></p><p><a href="https://www.bloomberg.com/quote/ANG:SJ">-463.00-1.44%</a></p><p><a href="https://www.bloomberg.com/quote/GFI:SJ">GFI</a></p><p><strong><a href="https://www.bloomberg.com/quote/GFI:SJ">GOLD FIELDS LTD</a></strong></p><p><a href="https://www.bloomberg.com/quote/GFI:SJ">18,779.00</a></p><p><a href="https://www.bloomberg.com/quote/GFI:SJ">ZAr</a></p><p><a href="https://www.bloomberg.com/quote/GFI:SJ">-106.00-0.56%</a></p><p><a href="https://www.bloomberg.com/quote/NEM:US">NEM</a></p><p><strong><a href="https://www.bloomberg.com/quote/NEM:US">NEWMONT CORP</a></strong></p><p><a href="https://www.bloomberg.com/quote/NEM:US">46.17</a></p><p><a href="https://www.bloomberg.com/quote/NEM:US">USD</a></p><p><a href="https://www.bloomberg.com/quote/NEM:US">-0.09-0.18%</a></p><p>Open</p><p>Ghana, Africa’s second-largest gold producer, ordered large mining companies to sell 20% of the metal they refine to the nation’s central bank, as the government embarks on a plan to barter bullion for fuel.</p><p>The directive will be effective Jan. 1, Minister for Lands and Natural Resources Samuel Jinapor said in a notice posted on Vice President Mahamudu Bawumia’s Facebook page. The government also ordered small-scale miners to sell their gold to the state-owned <a href="https://www.pmmc.gov.gh/">Precious Minerals Marketing Co.</a> Bawumia said on Thursday the government was planning to use bullion to buy fuel.</p><p>From bartering gold to a plan to ask international bondholders to accept losses on the principal, Ghana’s government is scrambling to find ways to stem a slide in the cedi and make way for a bailout by the International Monetary Fund. The West African nation has been <a href="https://www.bog.gov.gh/wp-content/uploads/2021/06/Launch-of-BOG-Gold-Purchase-Programme-Governors-Remarks.pdf">buying</a> gold from mining companies since last year. The latest move ramps up the purchases.</p><p>Rising demand for imports has seen the cedi plunge 57% this year, making it the world’s worst-performing currency.</p><p>Buying from small-scale miners “alone is enough to help us meet our need for $400 million for petroleum imports per month,” said Kabiru Mahama, an economic adviser to Bawumia.</p><p>READ MORE:</p><ul><li><p><a href="https://www.bloomberg.com/news/articles/2022-11-25/ghana-needs-bondholders-more-than-ever-as-debt-crisis-deepens">Ghana Needs Fidelity, Goldman More Than Ever as Crisis Brews </a></p></li><li><p><a href="https://www.bloomberg.com/news/articles/2022-11-24/ghana-plans-debt-exchange-as-review-shows-high-risk-of-distress">High Risk of Distress Spurs Ghana to Consider Debt Exchange Plan</a></p></li><li><p><a href="https://www.bloomberg.com/news/articles/2022-08-26/why-ghana-went-from-hero-to-zero-for-investors-quicktake">Why Ghana Went From Hero to Zero for Investors: QuickTake</a></p></li></ul><p>The <a href="https://www.bloomberg.com/quote/0390649D:GN">Bank of Ghana</a> and the government’s marketing arm will buy the gold from companies including <a href="https://www.bloomberg.com/quote/NEM:US">Newmont Corp.</a>, <a href="https://www.bloomberg.com/quote/ANG:SJ">AngloGold Ashanti Ltd.</a>, <a href="https://www.bloomberg.com/quote/GFI:SJ">Gold Fields Ltd.</a> in “cedis at spot price with no discounts,” according to the notice.</p><p>“We’ve not yet received the formal directive, but look forward to studying it and engaging with the government once we do,” Stewart Bailey, a spokesman for AngloGold said via email. </p><p>Gold Fields said it will sell 15,000 ounces of the metal to the central bank this year and is in discussions with authorities for 2023.</p><p><em>— With assistance by Felix Njini</em></p><p></p><p>https://www.bloomberg.com/news/articles/2022-11-25/nigeria-debt-service-load-to-soar-as-local-borrowing-costs-spike?srnd=economics-v2&sref=wOrDP8KX</p><h1>Nigeria Debt Service Load to Soar as Local Borrowing Costs Spike</h1><ul><li><p>Nation borrows at highest cost since 2017 as liquidity dries</p></li><li><p>Central bank’s monetary tightening thins bonds subscription</p></li></ul><p>By</p><p><a href="https://www.bloomberg.com/authors/AQbUYhMo7ig/emele-onu">Emele Onu</a> and</p><p><a href="https://www.bloomberg.com/authors/ATfzPr2iuUM/ruth-olurounbi">Ruth Olurounbi</a></p><p>November 25, 2022 at 7:59 AM EST</p><h2>Listen to this article</h2><p>2:52</p><h2>Share this article</h2><p>Follow the authors</p><p><a href="https://www.twitter.com/Emeleonu">@Emeleonu</a></p><p>+ Get alerts forEmele Onu</p><p><a href="https://www.twitter.com/Olurounbi">@Olurounbi</a></p><p>+ Get alerts forRuth Olurounbi</p><p>Nigerian government borrowing costs on local bonds have jumped to a five-year high, adding pressure to a debt service burden that consumes more than two-thirds of revenue in Africa’s biggest economy. </p><p>Average yields for local-currency denominated sovereign bonds have risen to 14.84% as of Thursday from 11.79% in May, the month the central bank started hiking its benchmark interest rate to curb accelerating inflation that hit a 17-year high in October. </p><p>The <a href="https://www.bloomberg.com/quote/172978Z:LX">Central Bank of Nigeria</a> has lifted rates by 500 basis points since May to 16.5%, boosting interest rates on government paper. The government this week sold 199 billion naira ($500 million) worth of 364-day bills at a yield of 14.84%, the highest since February 2019. While the bills were oversubscribed, the debt office only alloted about half the amount it planned to sell, pushing back on the higher yields demanded by investors. </p><p>While interest rates have jumped they still lag inflation at 21.1%, a discrepancy the central bank says it plans to correct by raising rates until the gap is closed. The risk of having negative real interest rates is that it discourages investment in the domestic market, said Hassan Mahmud, director in the monetary policy department at the central bank.</p><p>“We need to sanitize the market so that government can also in the future have a domestic source where it can raise the funds,” he said. </p><p><a href="https://www.bloomberg.com/news/articles/2022-11-23/nigeria-to-raise-benchmark-rate-until-gap-with-inflation-closes">Nigeria to Raise Benchmark Rate Until Gap With Inflation Closes</a></p><p>Bids at government debt auctions are already faltering due to the lower-than-inflation yields on offer. The subscription rate for a 14.5% bond due in 2029 was 9.8% of the 75 billion naira debt offered in October, the lowest since December 2018. </p><p>The weak appetite for short-tenured debt forced the Debt Management Office to make more allotments in the longer-dated 15 to 20-year issuances, where investors sought more than the government was willing to sell -- but at higher yields. The DMO sold the bond due in 2037 at 16.2%, the highest yield since August 2017. That raises the pressure on the government’s debt service costs even further. </p><p>As of August, debt service consumed 84% of revenues and the <a href="https://www.bloomberg.com/quote/8176888Z:US">World Bank</a> projects it could rise to 169% of income by 2025 if the government fails to implement fiscal reforms. </p><p>The central bank is concerned about how inflation is shrinking disposable income but doesn’t plan to ease policy until it sees inflation declining to around 12%-15%, Mahmud said. “So long as inflation is going up, the real value of income is also eroded,” he said. </p><p>The West African nation has ruled out selling bonds on international debt markets this year after it <a href="https://www.bloomberg.com/news/articles/2022-06-04/nigeria-shelves-950-million-eurobond-sale-on-pricing-concern">shelved</a> a proposal to raise about $950 million in May, citing unfavorable market conditions after Russia’s invasion on Ukraine.</p><p>“I think this would be an opportunity for also the government to find other alternative channels of raising funds,” Mahmud said. </p><p>https://www.bloomberg.com/news/articles/2022-11-25/ghana-needs-bondholders-more-than-ever-as-debt-crisis-deepens?srnd=economics-v2&sref=wOrDP8KX</p><h1>Ghana Needs Bondholders More Than Ever as Debt Crisis Deepens</h1><ul><li><p>Nation may ask investors to accept losses on eurobonds</p></li><li><p>Debt-sustainability program is needed to unlock IMF bailout</p></li></ul><p>By</p><p><a href="https://www.bloomberg.com/authors/AQhfZy4g8GM/ekow-dontoh">Ekow Dontoh</a>,</p><p><a href="https://www.bloomberg.com/authors/AQHtGywzVME/moses-mozart-dzawu">Moses Mozart Dzawu</a>, and</p><p><a href="https://www.bloomberg.com/authors/AQPf5q037NY/selcuk-gokoluk">Selcuk Gokoluk</a></p><p>November 25, 2022 at 7:47 AM EST<em>Updated onNovember 25, 2022 at 8:55 AM EST</em></p><h2>Listen to this article</h2><p>3:54</p><h2>Share this article</h2><p>Follow the authors</p><p><a href="https://www.twitter.com/Ekowmoses">@Ekowmoses</a></p><p>+ Get alerts forEkow Dontoh</p><p><a href="https://www.twitter.com/mmdzawu">@mmdzawu</a></p><p>+ Get alerts forMoses Mozart Dzawu</p><p><a href="https://www.twitter.com/selcukgokoluk">@selcukgokoluk</a></p><p>+ Get alerts forSelcuk Gokoluk</p><h2>In this article</h2><p><a href="https://www.bloomberg.com/quote/GS:US">GS</a></p><p><strong><a href="https://www.bloomberg.com/quote/GS:US">GOLDMAN SACHS GP</a></strong></p><p><a href="https://www.bloomberg.com/quote/GS:US">389.37</a></p><p><a href="https://www.bloomberg.com/quote/GS:US">USD</a></p><p><a href="https://www.bloomberg.com/quote/GS:US">+3.12+0.81%</a></p><p><a href="https://www.bloomberg.com/quote/1131L:US">1131L</a></p><p><strong><a href="https://www.bloomberg.com/quote/1131L:US">HOGAN LOVELLS US LLP</a></strong></p><p><a href="https://www.bloomberg.com/quote/1131L:US">Private Company</a></p><p><a href="https://www.bloomberg.com/quote/LAZ:US">LAZ</a></p><p><strong><a href="https://www.bloomberg.com/quote/LAZ:US">LAZARD LTD-CL A</a></strong></p><p><a href="https://www.bloomberg.com/quote/LAZ:US">36.80</a></p><p><a href="https://www.bloomberg.com/quote/LAZ:US">USD</a></p><p><a href="https://www.bloomberg.com/quote/LAZ:US">-0.15-0.39%</a></p><p><a href="https://www.bloomberg.com/quote/1847214D:FP">1847214D</a></p><p><strong><a href="https://www.bloomberg.com/quote/1847214D:FP">GLOBAL SOVEREIGN ADVISORY</a></strong></p><p><a href="https://www.bloomberg.com/quote/1847214D:FP">Private Company</a></p><p>Open</p><p>Ghana has the world’s worst-performing currency, inflation at 40% and its debt is junk. As it struggles to get to grips with a rapidly deteriorating situation, it’s now asking bondholders to accept losses on their investment.</p><p>The government aims to start talks with investors before the end of the month. It’s hired Lazard Ltd., Global Sovereign Advisory and Hogan Lovells US LLP as advisers, Reuters reported earlier this month. Some bondholders have tapped Rothschild & Co and Orrick, Herrington & Sutcliffe LLP as advisers, the Wall Street Journal reported.</p><p>Fidelity Institutional Asset Management, Goldman Sachs Group Inc and Pimco top the list of publicly-announced holdings of Ghana’s dollar-denominated bonds, which lost half of their value this year, according to data compiled by Bloomberg.</p><p>As part of any restructuring, Ghana will probably have to agree to tough measures to get its finances in order. But that’s a price it will have to pay to get a deal through and move it a step closer to a crucial bailout. It’s been in negotiations with the International Monetary Fund since September about a $3 billion program after being shut out of international debt markets.</p><p><a href="https://www.bloomberg.com/news/articles/2022-11-24/ghana-proposes-losses-for-eurobond-holders-in-debt-restructure">Ghana Eurobonds Steady as Country Proposes Debt Restructure</a></p><p>“A harsh restructuring can only be accepted if there’s also a credible and strict fiscal adjustment,” said Carlos de Sousa, a portfolio manager at Vontobel Asset Management in Zurich, which holds Ghana debt. “If the government proposes a harsh restructuring but a soft fiscal adjustment that will be perceived as putting the burden on creditors.”</p><div class="captioned-image-container"><figure><a class="image-link image2" target="_blank" href="https://substackcdn.com/image/fetch/$s_!O5ux!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F0702c253-e1e1-4eae-a89b-e31674c605c0_414x232.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!O5ux!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F0702c253-e1e1-4eae-a89b-e31674c605c0_414x232.png 424w, https://substackcdn.com/image/fetch/$s_!O5ux!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F0702c253-e1e1-4eae-a89b-e31674c605c0_414x232.png 848w, https://substackcdn.com/image/fetch/$s_!O5ux!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F0702c253-e1e1-4eae-a89b-e31674c605c0_414x232.png 1272w, https://substackcdn.com/image/fetch/$s_!O5ux!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F0702c253-e1e1-4eae-a89b-e31674c605c0_414x232.png 1456w" sizes="100vw"><img src="https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/0702c253-e1e1-4eae-a89b-e31674c605c0_414x232.png" width="414" height="232" data-attrs="{"src":"https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/0702c253-e1e1-4eae-a89b-e31674c605c0_414x232.png","srcNoWatermark":null,"fullscreen":null,"imageSize":null,"height":232,"width":414,"resizeWidth":null,"bytes":null,"alt":"Ghana's sovereign spread is well above distressed level","title":null,"type":null,"href":null,"belowTheFold":true,"topImage":false,"internalRedirect":null,"isProcessing":false,"align":null,"offset":false}" class="sizing-normal" alt="Ghana's sovereign spread is well above distressed level" title="Ghana's sovereign spread is well above distressed level" srcset="https://substackcdn.com/image/fetch/$s_!O5ux!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F0702c253-e1e1-4eae-a89b-e31674c605c0_414x232.png 424w, https://substackcdn.com/image/fetch/$s_!O5ux!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F0702c253-e1e1-4eae-a89b-e31674c605c0_414x232.png 848w, https://substackcdn.com/image/fetch/$s_!O5ux!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F0702c253-e1e1-4eae-a89b-e31674c605c0_414x232.png 1272w, https://substackcdn.com/image/fetch/$s_!O5ux!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F0702c253-e1e1-4eae-a89b-e31674c605c0_414x232.png 1456w" sizes="100vw" loading="lazy"></picture><div></div></div></a><figcaption class="image-caption"> </figcaption></figure></div><p>Boston-based Fidelity holds $94.5 million of Ghana’s dollar bonds, followed by Goldman Sachs Group Inc. at $72.2 million and Pimco with $68.5 million, according to data compiled by Bloomberg. A London-based spokeswoman for Pimco declined to comment. Fidelity and Goldman Sachs did not immediately return emails seeking comments.</p><p>While there are specific reasons behind Ghana’s collapse, it’s also another warning from the world of emerging markets, where economies are struggling to recover from the pandemic, or facing pressure on debt payments because of the strong US dollar.</p><p>Ghana’s cedi is down almost 60% this year, the worst performance of any currency. Other big losers include the Sri Lankan rupee, Argentina’s peso and Turkish lira, all of which are facing balance-of-payments problems.</p><p><a href="https://www.bloomberg.com/news/articles/2022-08-26/why-ghana-went-from-hero-to-zero-for-investors-quicktake">Why Ghana Went From Hero to Zero for Investors: QuickTake</a></p><p>One issue for Ghana’s government is credibility, as the decision to seek a haircut on foreign bonds comes just weeks after President Nana Akufo-Addo said the bailout talks wouldn’t result in losses for holders of external debt.</p><p>The country’s debt trades at a yield of 3,115 basis points over US Treasuries, the highest among African nations after Zambia, which has already defaulted. The average yield on Ghana’s debt hit a record high of 38.6% at the end of October from less than 11% at the end of last year. </p><p>The IMF estimates Ghana’s debt-to-GDP to surge to 90.7% this year from 31.3% in 2011. The country must repay $3.5 billion in loans and bonds next year, according to data compiled by Bloomberg. </p><p>The bonds were steady on Friday, with the yield on 2032 dollar securities falling 68 basis points to 30.29%, according to Bloomberg generic pricing. That suggests investors weren’t unprepared for a <a href="https://www.bloomberg.com/news/articles/2022-11-24/ghana-proposes-losses-for-eurobond-holders-in-debt-restructure">restructuring announcement</a>.</p><h3>‘Dose of Realism’</h3><p>Money Distilled: What market moves mean for your moneyGet John Stepek's daily newsletterSign up to this newsletter</p><p>“I think the markets may end up welcoming this dose of realism from Accra – especially as it will help bring the IMF on board,” Charlie Robertson, global chief economist at Renaissance Capital, said in an email. “It built up debt due to excessively large deficits -- budget and current account -- for many years, and avoiding this would have required stringent austerity in 2021 and an IMF deal then.”</p><p><a href="https://www.bloomberg.com/news/articles/2022-11-25/gold-miners-ordered-to-sell-20-of-refined-bullion-to-ghana">Gold Miners Ordered to Sell 20% of Refined Bullion to Ghana</a></p><p>In a bid to calm any investor nerves, Deputy Finance Minister John Kumah indicated the government won’t try to force anything on them.</p><p>“We know our bondholders, it’s not like it’s a big market out there,” he told Joy Fm radio in Accra on Thursday. “So it’s a matter of just constructing discussion and seeing how best we can all come to a position that protects either side and save the economy.”</p><p></p><p>coastal megalopolis </p><p>https://www.theguardian.com/world/2022/oct/27/megalopolis-how-coastal-west-africa-will-shape-the-coming-century?CMP=share_btn_tw</p><p>https://www.bii.co.uk/african-climate-conversation</p><p></p><p>ghana </p><p>https://theconversation.com/ghanas-economic-crisis-expert-insights-into-how-things-got-so-bad-and-what-the-fixes-are-193153?utm_medium=Social&utm_source=Twitter#Echobox=1668176618-1</p><h1><strong>https://www.cgdev.org/blog/public-private-infrastructure-finance-sub-saharan-africa-no-sign-upward-trends</strong></h1><h1><strong>https://www.cgdev.org/blog/public-private-infrastructure-finance-sub-saharan-africa-no-sign-upward-trends</strong></h1><h1><strong>Urbanization as a Global Historical Process: Theory and Evidence from sub-Saharan Africa</strong></h1><p><a href="https://onlinelibrary.wiley.com/action/doSearch?ContribAuthorRaw=Fox%2C+Sean">Sean Fox</a></p><p>https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1728-4457.2012.00493.x</p><p>Urbanization has traditionally been understood as a byproduct of economic development, but this explanatory framework fails to account for the phenomenon of “urbanization without growth” observed in sub-Saharan Africa throughout the 1980s and 1990s. In light of this apparent anomaly, I argue that urbanization is better understood as a global historical process driven by population dynamics associated with technological and institutional innovations that have substantially improved disease control and food security in urban settlements across the globe. These innovations first emerged in Europe in the eighteenth and nineteenth centuries and were subsequently diffused through colonialism, trade, and international development assistance. A range of qualitative and quantitative evidence is presented to demonstrate that this historically grounded theory of urbanization offers a more convincing explanation for the stylized facts of Africa's urban transition—and hence the process of world urbanization more broadly—than the traditional economic account.</p><p>Sean Fox Population and Development Review 2012 https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1728-4457.2012.00493.x</p><p></p><p>A promising step was announced last year in Scotland at COP26, the annual UN climate talks, when South Africa received an $8.5bn package to <a href="https://www.economist.com/middle-east-and-africa/2022/01/22/south-africa-the-worlds-coal-junkie-tries-to-quit">accelerate its energy transition</a>. It is high time to extend that kind of support to the rest of the continent. Nigeria has four times South Africa’s population and yet uses just one-eighth as much electricity. COP27 will be held in Egypt in November. Now is the ideal time to reset global policy so as to bolster Africa’s plans for producing clean energy. Wealthy countries have contributed the most to climate change, and they cannot demand more stringent actions than they will commit to themselves.</p><p>First, developed nations should commit to funding in full Africa’s energy transition. This is both a moral imperative and an environmental necessity. We estimate that Nigeria requires $400bn of new investment above business-as-usual spending to meet its net-zero pledge. A green energy package, akin to South Africa’s, should offer at least $10bn per year over the next two decades. Investments would cover not only new renewable generation projects, but also transmission infrastructure, smart grids, data management systems, storage capacity, electric vehicles, clean cooking, and the costs of integrating new distributed energy systems.</p><p>Second, there must be a hiatus on blanket bans for fossil-fuel financing in developing countries. Coal investment is already dead in most of Africa and any future oil investment will come from private sources. But financing rules on natural gas will greatly affect our development and our energy transition to net zero. Though solar will provide most of our power in the future, we still need natural gas for baseload power and balance. We insist that liquefied petroleum gas (LPG) be included as a clean cooking alternative to save the lives of our women and girls and to protect our own natural environment. Europe says it needs a decade more of gas investment to meet its 2050 climate targets. Africa—with our greater challenges—should have at least two more decades in order to meet our climate targets.</p><p>The world cannot tackle collective challenges if poor nations are treated as second class, or their aspirations are ignored. After enduring colonialism, decades of unfair economic practices and covid-19 vaccine apartheid, we cannot accept regressive climate policy as another injustice. Tackling the dual crises of poverty and climate change can only succeed if all countries play their fair part–and all of humanity is lifted up together.</p><p>https://www.economist.com/by-invitation/2022/05/14/yemi-osinbajo-on-the-hypocrisy-of-rich-countries-climate-policies</p><p>Please use the sharing tools found via the share button at the top or side of articles. Copying articles to share with others is a breach of <a href="https://www.ft.com">FT.com</a> <a href="https://help.ft.com/help/legal-privacy/terms-conditions/">T&Cs</a> and <a href="https://help.ft.com/help/legal-privacy/copyright/copyright-policy/">Copyright Policy</a>. Email <a href="mailto:licensing@ft.com">licensing@ft.com</a> to buy additional rights. Subscribers may share up to 10 or 20 articles per month using the gift article service. More information can be <a href="https://www.ft.com/tour">found here</a>. <br><a href="https://www.ft.com/content/bc086fd8-12c5-4a15-afc2-734be4443aac#myft:my-news:page">https://www.ft.com/content/bc086fd8-12c5-4a15-afc2-734be4443aac#myft:my-news:page</a><br><br>David Pilling 8 HOURS AGO 13 Print this page One measure of the trust that a nation’s people have for the state is the amount of tax they are willing to pay. However grudgingly, under an unwritten social contract people agree to part with a share of their income in the belief that the state will spend it more or less wisely. The public goods provided range from schools, hospitals and roads to police, national defence and the running of the government itself. Everyone benefits from improved services, a better educated and healthier population, safer streets and protected borders. On this measure, trust in Nigeria’s state is at rock bottom. According to the IMF, the country collected 6.3 per cent of gross domestic product in tax in 2020, the lowest proportion in the world, and far below the bare minimum the World Bank says is necessary for a functioning state. Though there have been halfhearted efforts to raise the tax base, the story remains unchanged: Nigerians pay very little tax and expect very little in return. In this, the state does not disappoint. Of the country’s 210mn people, some 90mn have no access to electricity. About 20mn of Nigeria’s children are out of school. With no social safety net, some 40 per cent of Nigerians live in absolute poverty, defined as earning less than $1.90 a day. Nigeria has a semi-decent road network, at least between big cities such as Lagos, Ibadan, Port Harcourt, Abuja, Kano and Kaduna. But security is so poor that many people are too afraid to use it. Nigeria’s security forces, mostly underpaid and under-equipped, are in a war of attrition against gangs of bandits, separatists, extortionists, kidnappers and terrorists. The state of insecurity suggests they are losing. It is easy to see how Nigeria got here. For half a century, it has been pumping oil in quantities large enough to pay for a small elite, but not large enough to raise everyone’s living standards significantly. According to calculations by Stefan Dercon, an Oxford professor, in 2010, when oil prices were riding high, Nigeria made $54bn from oil and gas, of which $38bn ended up in federal government hands. That equates to only $340 per capita against $1,206 in Algeria, $2,965 in Gabon and a hefty $7,477 in Saudi Arabia. In those circumstances, the name of the game becomes getting hold of oil rent. With almost no money left over to fund public services, those who can afford it simply opt out. They generate their own energy. They send their kids to private school at home (or preferably abroad). They go to private hospitals. Even Muhammadu Buhari, president since 2015, spent much of his first four-year term in London seeking medical care that was presumably not available at home. With nothing to gain in return, it is hardly surprising that those who can afford to pay taxes are reluctant to do so. The consequences are corrosive. The rule becomes everyone for themselves. At its extreme, this turns citizens and organisations into extortionists — the mirror image of the extortionary state. One of Nigeria’s growth industries is kidnapping. In the year to June 2022, according to SBM Intelligence, a security consultancy, 3,420 people were abducted, with a further 564 killed in incidents associated with abduction. Families see little point in contacting police and many negotiate directly with kidnappers, paying in total hundreds of millions of naira in ransom. Oil theft is another extortionary racket. This month, the Nigerian National Petroleum Company estimated that 400,000 barrels of oil were being stolen every day. Nigeria has an Opec quota of 1.8mn barrels but is only able to meet about 1.13mn, the lowest in 50 years. In the Delta states where most onshore oil is pumped, the government regularly pays off the extortionists who blow up pipelines or employs them as poachers turned gamekeepers. State refineries have not worked properly for years. But there has been a proliferation of illegal refineries processing stolen oil. In April, more than 100 people were killed when one blew up. Next year, Nigeria will get a new president and a new legislature after elections in February and March. In Abuja and Lagos, the chatter is of little else. Yet unless the next government can rewrite the social contract between the state and its citizens, it doesn’t much matter who wins. If a state cannot make its presence felt through even mildly effective tax and spending, it will not only be weak, but part of the extortionist problem. Unless the Nigerian state can somehow change course, it is hard to see how the centre can hold.</p>No children (leaf entity)