Afreximbank increasingly likely to take hit on loans, says JPMorgan
The chances of Afreximbank getting involved in a debt restructuring have increased, JPMorgan said on Tuesday, a development that could prompt ratings agency Fitch to lower the lender's rating to junk and force some investors to sell its bonds.
The African lender has been at the centre of a standoff over whether the loans it extended to Ghana and Zambia — two countries that recently defaulted — are in scope for restructuring or not.
Fitch downgraded Afreximbank's credit rating to one notch above junk on June 4, with a negative outlook, sending the lender's bonds lower.
The ratings agency cited high credit risks and weak risk-management policies and pegged Afreximbank's non-performing loans at 7.1% at the end of 2024.
Afreximbank says that as a multilateral lender, it has preferred creditor status, which protects its loans from restructurings in Ghana, Zambia, and Malawi.
"If the bank gets involved in a restructuring (the chances of which have increased...), Fitch could downgrade the bank further from IG (investment grade) to HY (high yield) at some point, which could lead to some forced selling of bonds," JPMorgan analyst Konstantin Rozantsev said in a research note.
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Daily Maverick
2 hours ago
- Daily Maverick
Africa's first telco data credit score aims to bring the ‘invisible' into the financial fold
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'Exclusion is part of the African narrative,' said Lee Naik, TransUnion CEO, reflecting on his own roots in Chatsworth, an Indian township in KwaZulu-Natal, where he grew up under apartheid. 'When I say I can feel what it means to be disconnected from the broader ecosystem, it's literally how I grew up,' he said. Africa has more than 350 million people who are disconnected from the financial system, and yet more than 510 million are subscribed to mobile services. 'For many Africans, for many South Africans, we feel disconnected. Having access to mobile telephony isn't the answer in itself,' Naik said. 'We all want to be heard. We all want to be seen. We all want to be known. The question is, does telco data allow us to do that?' Your phone is a financial mirror The scoring system parses numerous signals – how frequently a phone is used, phone number stability and phone swapping, to name a few – to piece together a view of financial activity. 'A mobile device is not just a device. It helps you get a view of the reflection of how a person lives,' said Waheem Amra, head of product and platform at Chenosis. If you look at someone's recharge pattern, for instance, it might give you insights into how they earn and manage their money, Fatgie Adams, TransUnion's head of credit risk solutions, said. Another metric taken into account is sub-tenure, which is how long you've had your mobile device, along with how long you've had a phone number, he explained. If you've gone through six phone numbers in a short period, it signals something different than someone who sticks with their number, he explained. 'We don't just collect this data. We aggregate it over time so it's physically sound. We transform it and structure it and pass it on to a translator.' Amra explained that the group of people this system aims to aid are not financially inactive. The problem is rather that traditional credit scoring systems can't see how they spend their money. Tackling financial exclusion According to Naik, about 16 million South Africans remain excluded from the financial system and another four million are underserved. The new scoring system aims to bring these people into view by interpreting financial behaviour previously dismissed. 'Are we adequately and accurately assessing these individuals for their creditworthiness?' Adams asked. 'Or are we merely declining them because they don't look like the borrowers of the past?' The system has implications beyond individual borrowers. Providing financial products to small businesses employing between one and five people can act as a way to address unemployment in the continent, Naik said. How does this affect you? Ease of access to credit: If you're a South African with a meagre or non-existent credit profile, this scoring system could help you borrow money. 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Every confirmation of consent is also time-stamped and audited, adding another layer of oversight to assure both consumers and lenders that the data is fair and transparent. A precedent for Africa In trialling this scoring approach with major South African lenders, the two companies found that 1.9 million previously 'invisible' people fell into view, a 35% improvement in predicting credit performance and a 20% drop in bad debt. Today, TransUnion operates in eight African markets. The goal is to expand this system to all 54 countries on the continent and onboard more telcos, Naik said. The telco data score isn't meant to replace traditional credit scoring, but to get a more complete picture of an individual, Amra said. 'We didn't just create a product, we created a new capability for the industry.' DM
IOL News
12 hours ago
- IOL News
Zero Tariffs, Infinite Trust: How China's Bold Trade Move Redefines Africa's Future
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This remarkable initiative, announced during the June 2025 Ministerial Meeting of Coordinators on the Implementation of Follow-up Actions of the Forum on China-Africa Cooperation (FOCAC), is more than just a trade policy—it is a powerful expression of trust, mutual respect, and forward-looking cooperation. Chinese President Xi Jinping's congratulatory letter to the meeting set the tone for this moment of renewed commitment. In his message, he emphasised that China and Africa are 'good friends, good partners, and good brothers,' bound by shared aspirations and common goals. He praised the success of the ten cooperation actions agreed upon during the 2024 Beijing Summit of FOCAC and reaffirmed China's pledge to accelerate the building of a China-Africa community with a shared future in the new era. President Denis Sassou Nguesso of the Republic of the Congo echoed these sentiments, affirming that the deep friendship between Africa and China is rooted in solidarity, mutual benefit, and a clear-eyed vision of long-term progress. Their messages were not ceremonial-they were statements of intent backed by concrete action. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Next Stay Close ✕ A Win-Win Solution for Africa's Economic Aspirations The zero-tariff policy is especially significant because it comes at a time when African nations are striving to boost industrial capacity, diversify exports, and secure greater integration into global markets. Removing tariffs on all African exports to China opens an enormous door of opportunity for value-added products, manufactured goods, and agricultural items to reach one of the world's largest and most dynamic consumer bases. As noted in the recent China Daily piece, African leaders increasingly see China as a preferred and reliable development partner. This policy confirms why: it places no political conditions, imposes no pressure, and offers real, market-driven solutions to real development needs. China's approach is empowering. Rather than offering short-term aid, it is building sustainable economic linkages. Countries such as Kenya, Nigeria, Ethiopia, South Africa, and Senegal, which are developing robust manufacturing sectors, will now find it easier to export competitively to China. But perhaps even more crucially, least-developed countries across the continent stand to benefit the most, as their exports gain immediate and unrestricted access. The Changsha Declaration: A Shared Voice for the Global South This bold trade step was matched diplomatically by the release of the China-Africa Changsha Declaration on Upholding Solidarity and Cooperation of the Global South. Signed by representatives from all 53 African nations, the African Union, and China, the declaration reaffirms the commitment to multilateralism and cooperation in an increasingly fragmented world. The declaration calls for a stronger collective voice in international affairs, and explicitly states opposition to unilateralism, protectionism, and economic bullying. It aligns perfectly with the zero-tariff decision-not as an isolated gesture, but as part of a broader effort to support inclusive globalization where developing nations play a central role. By supporting each other's core interests and respecting each other's development paths, China and Africa are demonstrating what modern diplomacy and fair trade can look like when rooted in equality. A Track Record of Delivery and Trust This is not the first time China has placed Africa at the centre of its global strategy. For 16 consecutive years, China has been Africa's largest trading partner. From the Belt and Road Initiative (BRI) to massive infrastructure projects, industrial parks, and clean energy investment, China's presence has been transformative across the continent. The zero-tariff initiative builds on these foundations. It gives African producers, farmers, and manufacturers the confidence to invest, expand, and compete. It also complements China's long-standing commitment to capacity-building, including thousands of scholarships, technical exchanges, and digital technology partnerships. This is not just trade-it is economic empowerment. At the June 11, 2025, press conference, Foreign Ministry Spokesperson Lin Jian reaffirmed that China will continue to strengthen economic cooperation with Africa, prioritise the implementation of FOCAC outcomes, and ensure that African voices are heard in global affairs. He stated that China is ready to work with African friends to "deepen practical cooperation and deliver more tangible results to the African people." That promise is already being kept. A Friendship That Sets a Global Example What sets this China-Africa partnership apart is its consistency. It is not driven by short-term headlines or geopolitical competition-it is built on long-term alignment and mutual respect. China sees Africa not just as a market or resource base, but as a strategic partner and friend. There is an authenticity to the relationship that resonates with African nations. China does not dictate political systems or demand policy changes. Instead, it listens, collaborates, and builds. That is why, time and again, African leaders praise China's development model and diplomatic approach. And the public feels it too. African perceptions of China remain overwhelmingly positive, driven by real-life impacts-new roads, better hospitals, growing exports, and increased educational access. This kind of people-centered development is where diplomacy meets everyday life. Looking Ahead: Prosperity Through Partnership As we look to the future, the zero-tariff initiative is a gateway to deeper economic integration, industrialization, and mutual prosperity. It sends a clear message: China believes in Africa's potential, and is backing that belief with action. By eliminating barriers and encouraging African exports, China is proving that global trade can be fair, inclusive, and truly win-win. In an era defined by challenges, the China-Africa relationship is a beacon of what cooperation should look like-visionary, respectful, and full of promise. * Michael Andisile Mayalo is an independent commentator and writer ** The views expressed do not necessarily reflect the views of IOL, Independent Media or The African.
TimesLIVE
13 hours ago
- TimesLIVE
Afreximbank increasingly likely to take hit on loans, says JPMorgan
The chances of Afreximbank getting involved in a debt restructuring have increased, JPMorgan said on Tuesday, a development that could prompt ratings agency Fitch to lower the lender's rating to junk and force some investors to sell its bonds. The African lender has been at the centre of a standoff over whether the loans it extended to Ghana and Zambia — two countries that recently defaulted — are in scope for restructuring or not. Fitch downgraded Afreximbank's credit rating to one notch above junk on June 4, with a negative outlook, sending the lender's bonds lower. The ratings agency cited high credit risks and weak risk-management policies and pegged Afreximbank's non-performing loans at 7.1% at the end of 2024. Afreximbank says that as a multilateral lender, it has preferred creditor status, which protects its loans from restructurings in Ghana, Zambia, and Malawi. "If the bank gets involved in a restructuring (the chances of which have increased...), Fitch could downgrade the bank further from IG (investment grade) to HY (high yield) at some point, which could lead to some forced selling of bonds," JPMorgan analyst Konstantin Rozantsev said in a research note.
