Emerging Markets: Africa

ROUNDUP

 

By Antonio Guerrero

 

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Front right: Corruption fighter Goodluck Jonathan

Flushed with confidence after its peaceful referendum on a new constitution, Kenya plans to issue $390 million of infrastructure bonds, the government’s fourth such issue. The bonds will have maturities of between six and nine years, with a 6% coupon. Authorities feel the recent oversubscription of a 25-year treasury bond bodes well for demand for the new paper. The three previous infrastructure bond issues raised a total of $692 million.

 

With foreign investors and donors steering clear of Zimbabwe, the government is on a credit-seeking spree. Foreign direct investment dropped from $852 million in 2009 to a meager $105 million year-to-date. Finance minister Tendai Biti is seeking credit from South Africa and Botswana. Both initially pledged $120 million after last year’s election of Zimbabwe’s inclusive government but later withheld the funds as power-sharing deteriorated. Iran has offered a €40 million ($53 million) credit line to finance energy, banking and industrial projects. Biti cut the official 2010 GDP growth forecast to 5.4%, from a previous 7%, owing to lack of financing and investments.

 

The Nigerian government’s campaign to clean up the nation’s corruption-ridden financial sector has yielded some results, as two top stock exchange officials were removed and a fugitive former banker surrendered to authorities. President Goodluck Jonathan, meanwhile, is expected to reshuffle his cabinet to purge corruption in his administration as well as in the financial sector.

 

A much-delayed plan to launch a stock exchange in Angola has again been delayed. The bourse is now expected to begin trading operations in 2011. In 2004, just two years after the end of the country’s long civil war, the government announced plans for a Luanda Stock Exchange to be launched by 2006. The target launch date was later delayed to 2008. While the government has built the exchange’s headquarters and has created a shortlist of state-owned companies it hopes to list, for which it has commissioned audits by Ernst and Young, it has been slow to pass the required laws to allow for trading.

 

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