The writer is Ghana’s minister for finance and outgoing chairman of the Development Committee of the IMF and World Bank 

Ghana confirmed its first two Covid-19 cases on March 12, imports from Norway and Turkey. Africa has since recorded more than 1.5m cases and counting, though in terms of infections and deaths, we have fared better than most regions. Perhaps this is because of our youthful population, the natural social distancing of outdoor living and experience with infectious disease management — helped by good leadership.

Our economies, however, have not been spared. Across the continent, governments are facing falling revenues, rising expenditures, increasing debt distress, and significant reversals in development indicators. In an omen of what is to come, Zambia now appears headed for the continent’s first pandemic-related private debt default. The human costs are tremendous. Up to 39m people are expected to slip below the poverty line.

The past six months have brought laudable interventions from multilateral institutions and the G20 countries. The G20 moved quickly to establish a debt service suspension initiative, which has secured deferrals of some $5.3bn in debt service payments. The IMF has approved more than $25bn in emergency funding to Africa, and the World Bank fast track Covid-19 programme is providing $160bn.

As we approach the World Bank and IMF fall meetings this week, much more needs to be done. The IMF’s lending capacity should be doubled to $2.5tn. European countries have some $260bn in special drawing rights for which they have little use and could easily lend on to African countries. The US is opposing the issuance of new SDRs altogether.

Meanwhile, China is negotiating with Africa on a country-by-country rather than continental basis, which is blocking progress. That makes western creditors reluctant to offer concessions for fear that released resources will simply

Adds detail, context

JOHANNESBURG, Oct 8 (Reuters)Struggling state-owned agricultural lender Land Bank has asked South Africa for an extra 10 billion rand ($603 million) of government support over the next few years.

Land Bank, which has already had a 3 billion rand state cash injection in the 2020/21 fiscal year, has been in talks with creditors since it defaulted on its debt in April.

“We have proposed R7 billion in 2021/22, and R1 billion per annum for the following three financial years for development,” Land Bank told Reuters in an emailed response to questions.

Land Bank is also planning an asset reduction programme, it said in a presentation to parliament this week.

State firms have been a long-term drain on the finances of Africa’s most industrialised economy, requiring bailouts at a time of weak economic growth which have helped to tip its sovereign credit rating into “junk” status.

South Africa’s National Treasury said last month that the Post Office, public broadcaster SABC and state-controlled airport operator ACSA were seeking a combined 10 billion rand in bailouts.

Meanwhile, South African Airways is under a form of bankruptcy protection and may be granted further bailouts at a mid-term budget due this month.

($1 = 16.5904 rand)

(Reporting by Alexander Winning Editing by Nqobile Dludla and Alexander Smith)

(([email protected]; +27 10 346 1076))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Source Article

(Bloomberg) — South Africa’s government is unlikely to force retirement funds to plow money into specific companies or projects, an industry body of fund managers and insurers said.



a view of a city: A construction worker looks out towards the Central Business District (CBD) on the city skyline from inside The Leonardo, the Legacy Group’s mixed-use property development, currently Africa’s tallest building, in the Sandton district of Johannesburg, South Africa, on Tuesday, Sept. 17, 2019. Emerging markets will again be looking to central banks to provide the next leg-up in a rally that’s making it the best September so far for stocks and currencies since 2013.


© Bloomberg
A construction worker looks out towards the Central Business District (CBD) on the city skyline from inside The Leonardo, the Legacy Group’s mixed-use property development, currently Africa’s tallest building, in the Sandton district of Johannesburg, South Africa, on Tuesday, Sept. 17, 2019. Emerging markets will again be looking to central banks to provide the next leg-up in a rally that’s making it the best September so far for stocks and currencies since 2013.

Of the economic plans under discussion to revive South Africa’s economy, none are calling for prescribed assets to be used as a solution, the Association for Savings and Investments South Africa Chief Executive Officer Leon Campher said in an emailed statement.

Loading...

Load Error

The African National Congress has said previously it would investigate forcing retirement funds to help fund social development, but the idea has been strongly opposed by investors. Since then, the National Treasury has shunned proposals to instruct pension funds on where to invest. Asisa’s members have urged the government to instead provide the industry with bankable projects.

“Retirement funds would consider investing in well-structured viable infrastructure projects,” Campher said. “This should not be confused with pumping money into state-owned enterprises.”

South African Ruling Alliance Pushes For Prescribed Assets

While the government may still be considering ways to expand a regulation in the Pension Fund Act to ease barriers to infrastructure investment, this does not amount to prescription and is also not necessary, Campher said.

“Asisa is of the view that the current Regulation 28 provisions do not prevent increased investment in infrastructure,” he said.

For more articles like this, please visit us at bloomberg.com

No business can ever say with certainty whether or not it will be safe from the threat of political violence or terrorism (PVT). Even seemingly innocuous businesses can unexpectedly find themselves on the receiving end of violent protests.

Cameron Cupido, CEO, Reinsurance Solutions Intermediary Services

Political violence

This was certainly the case in September 2020 when Clicks became the target of protest action. A racist advert on the chain’s website sparked violent protests by Economic Freedom Front (EFF) members that ultimately saw seven branches damaged and more than 400 stores closed.

As a health and beauty retailer, Clicks was an unlikely candidate for political violence. However, this incident highlighted just how quickly events can escalate, affecting even those entities deemed ‘safe’ from such violence.

A business doesn’t even have to be the intended target of protest or terrorist action for it to suffer loss or damage as a result of these events. Just look at the service delivery protests in South Africa, Mozambique and Zimbabwe in recent years. Physical damages, stock losses and business interruption in these cases amounted to millions. When citizens go on the rampage, no business is safe. This underscores the importance of PVT cover for all businesses, no matter their perceived risk.

Terrorism

While service delivery marches, wage strikes and politically-fuelled protests have become commonplace in Southern Africa, terrorism has been less of a threat. In fact, Southern Africa is regarded by experts as the least terrorism-affected geographical region in Africa.

Despite this assertion, terrorist activity has been steadily increasing in the northern reaches of Mozambique since 2017 in a violent extremist insurgency that has claimed more than 1,400 lives. This year, including during September 2020, these events have escalated dramatically. Concerns have been raised about this activity spilling over into neighbouring South Africa, especially if



a person standing in front of a sign


© Provided by Quartz


The economic impact of Covid-19 is starting to show up in private equity activity and deals in Africa.

With the continent’s largest economies on the brink of recession and investors looking to be more capital efficient while the effects of the pandemic unfold, private equity activity is slowing down across Africa in comparison to recent years.

In the first half of the year the value of private equity deals on the continent is on pace for a 63% drop compared to last year, says a report from the African Private Equity and Venture Capital Association (AVCA). The value of the 81 private equity deals reported stood at just $700 million.

Loading...

Load Error

There’s a similar lag in the amount of funding raised by private equity players as well with $1.1 billion raised in the first half of the year, counting interim and final closes. If similar levels are maintained through the rest of the year, private equity fundraising on the continent will also record its lowest total in six years. In a similar vein, private equity exits have also slowed down with only 13 recorded in the first half of 2020.

Perhaps capturing the growing concern around the underfunded African health systems brought into sharp relief by the pandemic, health care sector, took nearly a quarter of all private equity deals done by value. The sector was led by Mediterrania Capital Partners and others’ investment in MetaMed, the largest platform of diagnostic imaging centers in Egypt, Jordan and Saudi Arabia.

But the most active sectors were financials, information technology and consumer discretionary, which attracted 49% of deals by volume.

Regionally, North Africa received the largest share of private equity deals by volume and value across the continent followed by West Africa.

The slowdown in PE activity