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Reuters
29-05-2025
- Business
- Reuters
Afreximbank tells investors Ghana 'up to date' on loans, risking creditors' ire
LONDON, May 29 (Reuters) - Afreximbank has signalled that Ghana has kept up loan repayments to it, two sources told Reuters, potentially setting Accra on a collision course with its other lenders that have already agreed to take losses to help the country recover from default. The African lender, the sources said, told investors on a May 15 call that Ghana and Malawi - which is also undergoing a debt restructuring - were "up to date" with their loan facilities, suggesting neither country had run up arrears. While Ghana's restructuring of $13 billion worth of international bonds and debts to official creditors concluded last year, it must also restructure its commercial debt before it can fully emerge from default. Afreximbank says it is a multilateral institution which, like the IMF and the World Bank, is exempt from taking losses when countries default. But sources told Reuters last month that the Paris Club group of official lenders has made it clear that Ghana, and also Zambia which similarly agreed a deal with its primary creditors last year, must restructure their debts to Afreximbank and the Eastern and Southern African Trade and Development Bank (TDB). Ghana said in a statement on Thursday that it remained in arrears with all external creditors eligible for restructuring and that no creditor had been treated preferentially. The government told Bloomberg last week that it would restructure the Afreximbank loans. Afreximbank declined to comment beyond a May 21 statement saying it was not participating in debt restructurings with member countries. Ghana defaulted in 2022, spurring the worst economic crisis in a generation against the backdrop of the COVID pandemic, Russia's invasion of Ukraine and higher global interest rates. The gold, cocoa and oil-producing nation owes Afreximbank at least $750 million, which, if counted as commercial debt, would make up almost a quarter of the country's near $4 billion of such loans, according to think tank ODI Global. It is unclear when Ghana and Malawi were due to make payments to Afreximbank. The timing is particularly pertinent for Ghana after it included a clause in international bonds issued late last year, opens new tab as part of its debt rework stipulating it cannot treat commercial creditors better than its bondholders. "Zambia, Ghana and Malawi are caught in the middle between different creditors," said Chris Humphrey, a senior research associate with ODI, adding that "they're being forced to make a difficult decision". Malawi and Zambia did not immediately respond to requests for comment. Zambia has also told other media that it would restructure Afreximbank debt. Afreximbank, with a $42 billion balance sheet and shareholders including governments and private investors, is an important lender to the continent, particularly as concessional finance and aid funding shrink. If Afreximbank's loans are deemed eligible for restructuring, its credit rating could be affected, in turn pushing up its own borrowing costs, its investors said. Fitch rates the lender 'BBB' and Moody's 'Baa1'. Afreximbank said in its first-quarter report that for its $27.8 billion loan book, its non-performing loans ratio was 2.44%, without identifying individual clients. Fitch warned last year that an NPL ratio above 6% was among factors that could lead to a negative rating action or downgrade. While some of its lending is at rates above those that are widely considered concessional terms, some point to Afreximbank's willingness to step in as a lender of last resort at times of strife for countries such as Ghana. Accra paid as much as 9.55% to the lender for parts of its loan arranged in 2022, shortly before it tumbled into default.
Yahoo
26-05-2025
- Business
- Yahoo
China shifts from developing world's banker to debt collector, says Lowy Institute
SYDNEY (Reuters) -The world's poorest countries are due to make record debt repayments to China in 2025 on loans extended a decade earlier at the peak of Beijing's Belt and Road Initiative, a report by the Sydney-based Lowy Institute think tank said on Monday. Under the initiative launched by Chinese President Xi Jinping in 2013, Beijing lent billions of dollars to build infrastructure to connect Asia, Europe and Africa, as it also sought to build trade and influence. Of $35 billion in debt repayments due to be made to China by developing countries in 2025, $22 billion is set to be paid by 75 of the world's poorest and most vulnerable countries, putting at risk health and education spending, the report said. "For the rest of this decade, China will be more debt collector than banker to the developing world," said Riley Duke, the report's author. In 54 developing countries, debt payments to China will exceed the combined payments owed to the Paris Club of Western bilateral lenders, the report said. "As Beijing shifts into the role of debt collector, Western governments remain internally focused, with aid declining and multilateral support waning," the report said, warning of the risk of development setbacks and instability.
Straits Times
26-05-2025
- Business
- Straits Times
China shifts from developing world's banker to debt collector, says Lowy Institute
SYDNEY - The world's poorest countries are due to make record debt repayments to China in 2025 on loans extended a decade earlier at the peak of Beijing's Belt and Road Initiative, a report by the Sydney-based Lowy Institute think tank said on Monday. Under the initiative launched by Chinese President Xi Jinping in 2013, Beijing lent billions of dollars to build infrastructure to connect Asia, Europe and Africa, as it also sought to build trade and influence. Of $35 billion in debt repayments due to be made to China by developing countries in 2025, $22 billion is set to be paid by 75 of the world's poorest and most vulnerable countries, putting at risk health and education spending, the report said. "For the rest of this decade, China will be more debt collector than banker to the developing world," said Riley Duke, the report's author. In 54 developing countries, debt payments to China will exceed the combined payments owed to the Paris Club of Western bilateral lenders, the report said. "As Beijing shifts into the role of debt collector, Western governments remain internally focused, with aid declining and multilateral support waning," the report said, warning of the risk of development setbacks and instability. REUTERS Join ST's Telegram channel and get the latest breaking news delivered to you.
Shafaq News
18-05-2025
- Business
- Shafaq News
Iraq's debt "very safe" below 33% of GDP
Shafaq News/ Iraq's total public debt remains below 33% of the country's gross domestic product (GDP), securing a low-risk standing in global credit rankings, an Iraqi official confirmed Friday. Speaking to Shafaq News, Mazhar Mohammed Saleh, financial adviser to the prime minister, noted that Iraq wiped out nearly $100 billion in legacy foreign debt through the 2004 Paris Club agreement, most linked to pre-1990 conflicts under the former regime. The remaining debt was restructured over two decades, with the final installment—a $2.7 billion bond—due for full repayment by 2028. During the war against ISIS, Iraq borrowed about $12 billion to support its national budget. The majority of these loans, especially those from the International Monetary Fund, have been repaid. In the coming four years, Iraq must repay $9 billion in external debt. A similar amount, mainly from international development funds, is dedicated to rebuilding areas liberated from conflict. External debt currently represents roughly 8% of GDP, which Saleh described as 'very safe.' Domestic public debt totals 85 trillion Iraqi dinars (around $65 billion), with half held in the Central Bank of Iraq's investment portfolio and the remainder mostly with state-owned banks or issued as bonds and treasury bills. Saleh attributed this accumulation to three significant downturns in oil revenues over recent years. Internal debt, however, makes up about 25% of GDP. Combined with external obligations, Iraq's total public debt stays below 33%—well under the widely accepted 60% threshold for sustainable debt levels. Saleh also highlighted an unresolved $40 billion in debt dating to the Iran-Iraq war that remains unsettled despite the 2004 Paris Club deal. These 'odious debts,' owed to eight countries, are expected to be written off by at least 80% under the agreement, pending verification.
Bloomberg
23-04-2025
- Business
- Bloomberg
AfDB Says Zimbabwe Seeks $2.6 Billion in Bridge Finance to Overhaul Debt
The African Development Bank said Zimbabwe has proposed seeking $2.6 billion in bridge finance to help it clear arrears owed to international financial institutions as it attempts to break a debt impasse dating back to 1999. The southern African nation owes about 60% of its $21 billion debt pile to external creditors including the World Bank, Paris Club, European Investment Bank and the AfDB. The debt has kept Zimbabwe locked out of global capital markets since it first defaulted on payments a quarter of a century ago.
