Africa Briefs

SA needs to build confidence in power sector

South Africa needs to invest more to rebuild confidence in its ability to supply power, its energy minister said yesterday, after its state-run power firm was forced to implement some of the worst blackouts in years.

"Deteriorating Eskom plant performance driven by old generation infrastructure confirms that we are now in need of more investment in new generation capacity," Jeff Radebe said at a conference in Johannesburg, adding president Cyril Ramaphosa's efforts to entice investment could otherwise be undermined.

Years of mismanagement and governance problems at Eskom have left the company, which supplies 90% of South Africa's power, saddled with debt and ailing power plants, a situation Radebe described as "untenable". – Nampa/Reuters

Nigeria's election delay triggers stock-market sell-off

A delay in Nigeria's presidential elections set off the biggest decline in the country's stock market in six months on Monday and also put pressure on its bonds and currency.

Nigeria's electoral commission postponed the vote hours before polls were due to open on Saturday, citing the logistical complexities of holding an election in a large country with a population of 180 million.

Lagos's main stock market finished down 1.6%, after a last-minute recovery. At one point, it had fallen more than 2.5%, its biggest slump since September and a turnaround from the three-month high it reached last week.

Currency traders reacted by pushing one-year non-deliverable naira forwards to 401 per US dollar from 397. The naira remains partly controlled by the central bank and was stable at 306.80 per US dollar on the spot market.

Investors had started to pick up shares to position for a post-election rally, assuming that the election would pass without violence or other problems. That boosted US dollar liquidity on the currency market.

The government's US dollar-denominated bonds sold off, too, and as yields rose, analysts wondered what kind of impact that would have on a naira-denominated debt auction later in the week. – Nampa/Reuters

Kenya's domestic debt refinancing risks rise

Kenya's government faces increased refinancing or roll over risks as more domestic bonds mature within the next year than in the past year, the ministry of finance said.

The International Monetary Fund bumped up the East African nation's debt distress risk to moderate from low last October, citing rising external commercial borrowing and growing interest payments on public debt.

The maturing of domestic debt is due to shorten, with 43% of the debt maturing in less than a year, up from 38% the previous year, the treasury said in a debt management strategy document seen by Reuters on Monday after being sent to parliament by the treasury on Thursday.

Market conditions had not been "supportive" of the government's aim of lengthening the maturity profile of the debt through issuance of longer-dated bonds in the 2017/18 (July-June) financial year, the ministry said.

The 2019 local debt maturities account for US$10.37 billion out of the total outstanding local debt of US$24.21 billion, the ministry said in the document. – Nampa/Reuters