Africa in Business: loan program and cocoa farmers
Published on: Thursday 06 April 2023
STORY: Here are five stories that made business headlines in sub-Saharan Africa this week.1. Countries in the West African Economic and Monetary Union are struggling to raise funds on the regional capital market. That's according to financial market sources. Investors are demanding higher interest rates as liquidity tightened. Ivory Coast failed to issue local currency debt in March, while Senegal, Mali, Niger and Burkina Faso have cancelled or postponed issuing bonds in recent weeks.The source told Reuters that the failure to raise much-needed funds from the regional market may force states to look for alternative, cheaper financing sources such as the International Monetary Fund to avoid budget shortfalls. 2. Ivory Coast has done just that. The International Monetary Fund has agreed to lend the country about $3.5 billion. The loan program will help preserve the West African country's fiscal and debt sustainability and support reforms to promote more private-sector-led growth, according to the IMF. 3. Nigeria's Senate has approved China Development Bank to fund a new rail project. The country's Kaduna-to-Kano rail project cost $973 million. This came after another Chinese lender withdrew from the project in 2020. 4. Global carriers warned that concerns over blocked airline funds in Africa and elsewhere could lead to interruptions in air services, if there is no progress in talks to unfreeze money owed. The international Air Transport Association said in a briefing about $1.6 billion of funds are being withheld in various African countries due to currency shortages or other problems. 5. And finally, back in Ivory Coast, a flagship program launched in 2019 that promised a living wage to cocoa growers has left many worse off. More than a dozen Ivorian farmers said they were paid well below a price set by the government. It was itself lower than the price promised when the scheme was launched. Industry experts blamed the situation on surpluses that have kept cocoa cheap globally, as well as on chocolate companies, global commodity buyers and intermediaries in the field seeking to protect margins. They cited inherent flaws in the government program, including a lack of supply management.
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