9th August 2023
Fresh Niger Sanctions
Fresh sanctions were imposed on Niger after its military leaders rebuffed a recent diplomatic mission aiming to restore constitutional order post-coup. Nigerian President Bola Tinubu enacted the sanctions through the central bank to target coup participants, signaling international pressure on the takeover. A joint delegation from West African states, the African Union, and the United Nations was denied entry by Niger's junta, escalating tensions and complicating the search for a resolution. Heads of state from the Economic Community of West African States (ECOWAS) prepare for a summit to address the standoff, considering diplomatic and military actions.
Gabon’s Debt-for-Nature
In a pioneering move for Africa, Gabon has initiated a debt-for-nature swap, purchasing $500 million of its international debt and issuing an equal-sized environmentally conscious 'blue bond' that matures in 2038. Acquiring discounted bonds, Gabon accepted around $436 million, just below its $450 million limit, with investors offering over $1.1 billion. The 'blue bond' carries a 6.097% interest rate, making it more cost-effective than the existing bonds being partially bought back, which have coupons between 6.625% and 7%. The swap, facilitated by the U.S. International Development Finance Corporation, aims to fund conservation efforts in Gabon, renowned for hosting a significant leatherback turtle population.
Nedbank Loan Concerns
Nedbank Group (NEDJ.J), one of South Africa's leading lenders, cautioned about prolonged elevated bad loans and potential failure to achieve 2025 financial goals. Despite this, the bank's shares gained 2.5% after a solid 11% profit increase in H1 and CEO Mike Brown's anticipation of reduced bad loans in the latter half. While typically well-capitalized and conservative, South Africa's top five banks face challenges due to inflation, high interest rates, power outages, and logistical bottlenecks affecting retail and small business clients. This resulted in a 57% surge in asset impairment, leading to a credit loss ratio breach of 121 basis points, threatening the bank's medium-term 2025 target.
Namibia-Japan exploration
Japan has signed an agreement with Namibia to jointly explore rare earth minerals, a key step in its plan to build resilient supply chains for minerals vital in electric vehicle (EV) battery production. The Japan Organization for Metals and Energy Security (JOGMEC) will collaborate with Namibia's state-owned Epangelo mining firm, focusing on developing a sustainable supply of cobalt and other minerals. Yasutoshi Nishimura, Japan's Minister for Economy, Trade, and Industry, is pursuing a broader African supply chain of critical minerals, reducing dependence on China's dominance in battery minerals. JOGMEC is already engaged with Namibia Critical Metals Inc. (NMI.V) in the Lofdal deposit project, known for yttrium, dysprosium, and terbium production essential for EV batteries and wind turbines.
