Economy

DR CONGO (Capital Markets in Africa) — S&P Global Ratings held Democratic Republic of Congo’s long-term foreign-currency debt rating at CCC+ and lowered its outlook to stable from positive amid the fallout from the coronavirus pandemic. Emergency foreign assistance should help balance out the worst effects of the virus on Congo’s economy, which could rebound if copper and cobalt demand and production increase as expected, the ratings agency said Friday on its website. “DRC’s economic…

JOHANNESBURG (Capital Markets in Africa) —  Even before the pandemic struck, South Africa was in a parlous state. Jacob Zuma’s disastrous nine-year rule left a toxic legacy of endemic graft, soaring government debt, and evaporating investor confidence. President Cyril Ramaphosa has made only stuttering progress since he succeeded Zuma in 2018, replacing some inept and corrupt officials, but has struggled to ignite economic growth or tackle rampant unemployment.  The arrival of Covid-19 has compounded South…

LAGOS (Capital Markets in Africa) – Standard Chartered Bank indicated that Sub-Saharan African(SSA) countries will benefit from debt-service relief from China under the G-20 Debt Service Suspension Initiative. It expected the agreement to suspend the repayment of bilateral loans for low-income economies until the end of 2020. It considered that Angola, Zambia, Uganda, and Kenya will benefit the most from the suspension of debt payments to China, as they owe a large position of their…

JOHANNESBURG (Capital Markets in Africa) — South Africa’s near-term economic outlook is highly dependent on the development of the coronavirus pandemic and the extent of restrictions on business activity to limit the spread, the Reserve Bank said. The government implemented a strict lockdown to curb the virus on March 27. For five weeks, almost all activity, except essential services, were shuttered and most citizens were only allowed to leave their homes only to buy food,…

NAIROBI (Capital Markets in Africa) — Kenya’s economy will contract for the first time in almost three decades, according to the International Monetary Fund. The lender now sees gross domestic product shrinking by 0.3% in 2020, compared with an April projection of 1% growth, according to a regional economic outlook update published Monday. That will be the first annual contraction since 1993. The economy will expand 4% next year, the IMF said, down from 6.1% projected two…

LAGOS (Capital Markets in Africa) — Africa’s largest economy had a week of good and bad news as the oil price rebounded to the highest level in two months, while the negative impact of the coronavirus pandemic on consumers and business activity became clearer. Crude prices have doubled since hitting a two-decade low in April, climbing past $40 a barrel after OPEC+ cuts started taking excess supplies from the market. With oil bringing in 90%…

LAGOS (Capital Markets in Africa) — For advanced economies dealing with economic disruptions from the coronavirus pandemic, the response of choice has been massive stimulus packages. Africa is doing without them. While central banks and governments in North America, Asia and Europe have offered trillions of dollars to prop up businesses hit by lockdowns and provide a safety net for the swelling ranks of the unemployed, a lack of liquidity restricts African governments from providing…