🔅 IMF & World Bank Meeting: Africa's Debt Distress
Plus: Kenya's Mass Graves and Cult Leader, Burkina Faso: 60 Civilians Killed, Former Burundi PM Arrested, And much more... ☕
Photo of the day: Lake Abbe, Djibouti
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Global Markets: Credit Suisse's Bank Run | Credit Suisse, the Swiss banking giant, revealed the scale of the bank run that led to its state-backed rescue in March: A whopping 61.2 billion Swiss francs left the bank in the first three months of the year. That’s enough money to buy an entire country, but apparently not enough to keep Credit Suisse afloat. The wealth management division’s assets dropped almost 29%, and the bank’s losses amounted to 7.3 billion Swiss francs in 2022—its worst year since the financial crisis of 2008. It’s not hard to see why people pulled their money out: Credit Suisse had been loss-making for years, was facing money laundering charges, and got caught up in the market turmoil that followed the collapse of two Silicon Valley banks in March. To stop the bleeding, Swiss authorities put together a 200 billion francs rescue package, and UBS agreed to take over Credit Suisse.
*Data accurate as of the close of markets across the continent
ECONOMY
IMF & World Bank Meeting: Africa's Debt Distress
It's no secret that the pandemic has hit developing nations harder than most.
As central bankers, finance ministers and political leaders convene for the World Bank Group and International Monetary Fund (IMF) Spring Meetings, they’ll be discussing a record number of countries facing debt distress.
What’s causing the debt crisis?
It’s a perfect storm of rising inflation, escalating borrowing costs, and a strong dollar.
This has made it more expensive to repay loans and raise money, which has pushed several nations into default.
Which countries are at the highest risk?
Ghana is facing its worst economic crisis in a generation, and is trying to secure a $3 billion agreement with the IMF.
Malawi is grappling with foreign exchange shortages, and Zambia is the first African nation to actually default.
The other countries at high risk, according to the IMF, are Burundi, Cameroon, Central African Republic, Chad, Comoros, Djibouti, Ethiopia, and the Gambia.
The Republic of Congo is already in debt distress.
Any solutions?
Ghana has already secured a deal to write down its domestic debt, and is currently in debt talks with international bondholders.
Malawi is trying to restructure its debt in order to secure more funding from the IMF, while Zambia is looking to the G20's Common Framework initiative to streamline its debt restructurings.
The IMF is also trying to come up with solutions to help these nations, and the World Bank Group and International Monetary Fund (IMF) spring meeting will hopefully bring them one step closer to providing much-needed relief.
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OTHER HEADLINES
Across the Continent
🇰🇪 Kenyan Police Discover Mass Graves, Arrest Cult Leader | Kenyan police have discovered 58 bodies—50 of them in mass graves—in an 800-acre area of the Shakahola forest at the coast. It's thought that these bodies belong to members of a cult led by Paul Mackenzie, who believed they would ascend to heaven if they starved themselves. The cult leader has been arrested and 14 other cult members are in police custody. President William Ruto has labelled Mackenzie a "terrible criminal," and he has instructed relevant agencies to investigate the root cause of what happened and to tackle "people who want to use religion to advance weird, unacceptable ideology in the Republic of Kenya."
🇧🇫 Burkina Faso: 60 Civilians Killed | A reported 60 civilians were killed by attackers wearing Burkinabe military uniforms late last week. An investigation has been launched into the attack on the village of Karma, which took place near the border with Mali. This area has been suffering from Islamist groups affiliated with al Qaeda and Islamic State, and Human Rights Watch has reported a surge in attacks on civilians by armed groups in the last few years. In April, an attack on the army and volunteer forces left 40 dead and 33 injured. The violence in the region has been going on since 2012, and has already displaced over 2.5 million people.
🇧🇮 Former Burundi PM Arrested | Former Prime Minister Alain Guillaume Bunyoni of Burundi has been arrested, according to a statement from the country's justice ministry. Bunyoni was Prime Minister from June 2020 to September 2022, when he was sacked after the president accused unnamed people of planning a coup against him. The justice ministry statement did not specify where he was being held or the charges he would be facing. It did, however, confirm that Bunyoni had been arrested in Burundi's capital Bujumbura on Friday. Bunyoni had been a close ally of former president Pierre Nkurunziza, who died in office in 2020. The US had sanctioned Bunyoni in 2015 over his alleged role in violating human rights during violence sparked by Nkurunziza’s decision to seek a third term in office.
FOOD FOR THOUGHT
Proverb of the Day
“Advice is like a stranger; if he’s welcome he stays for the night; if not, he leaves the same day.”
— Malagasy Proverb.