Oil Prices Slide Amid China's Growth Concerns; Kenya's Unrest, Ghana's Debt Restructuring, Nigeria's Cash Reserve Cut
Oil prices experienced a second consecutive decline as China's weaker-than-expected second-quarter economic growth raised concerns about demand in the world's second-largest oil consumer. Brent crude futures dropped by 1.1% to $78.96 a barrel, while U.S. West Texas Intermediate crude fell by 1.1% to $74.55 a barrel at 06:28 GMT.
KENYA: Political Unrest in Kenya Threatens Economic Stability and Growth Prospects
The recent surge of political unrest in Kenya has raised concerns about the country's economic stability and growth prospects. As citizens express frustration over the high cost of living and rampant unemployment, mass protests and civil disobedience pose significant challenges to economic recovery. Kenya’s opposition has called for a third day of demonstrations against tax hikes on July 19, after previous protests saw several of Kenya’s towns and cities witness violent and sometimes deadly stand-offs with police. The government's ability to implement crucial taxation measures and address revenue shortfalls is further impeded by ongoing court cases. With a mounting debt burden and potential reductions in development spending, the economy faces increased uncertainty and risks.
GHANA: Ghana Invites Bondholders to Exchange Debt in Effort to Meet IMF Loan Requirements
Ghana's finance ministry has announced an invitation to eligible holders to exchange $809.9 million in domestic U.S. dollar bonds for new bonds with lower interest rates and longer maturities. The move is part of Ghana's efforts to restructure its debt in order to meet the requirements of its International Monetary Fund (IMF) loan. The cocoa board (COCOBOD) has also launched a debt securities exchange program, offering holders of its short-term debt securities the opportunity to exchange them for longer-term debt securities. Ghana aims to restructure both domestic and external debt to address its economic crisis and reduce external debt interest repayments.
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NIGERIA: Central Bank Slashes Cash Reserve Requirement for Merchant Banks to Boost Liquidity
The Central Bank of Nigeria has reduced the mandatory cash reserve requirement for merchant banks by 70%, lowering the ratio from 32.5% to 10%. The move aims to enhance the banks' liquidity and their capacity to provide loans to businesses. The decision recognizes the unique business model and wholesale funding structure of merchant banks. The cash reserve ratio is the portion of customer funds that banks must deposit with the central bank. This measure is part of the government's efforts, under the leadership of Bola Tinubu, to improve access to loans, revive the economy, and stimulate growth. The new requirement will be implemented from August 1st.
ZAMBIA: Vedanta Resources to Invest $1 Billion in Zambia’s Konkola Copper Mine
Vedanta Resources, owned by Indian billionaire Anil Agarwal, has announced that it is in an "advanced stage" of finalizing agreements with the Zambian government regarding the assets of Konkola Copper Mines (KCM). KCM, in which Vedanta holds a 79.4% stake, has been under provisional liquidation for approximately four years, leading to legal disputes between the company and the Zambian government. Vedanta plans to invest $1 billion in the KCM assets to significantly increase copper production. While a deal is close, one remaining matter needs resolution before reaching a final agreement, according to Zambian Mines Minister Paul Kabuswe.