Mines to pay royalties in dollars to shoal FX reserves...

Mining companies in Africa’s second largest copper producer Zambia, will now pay mineral royalties directly to the central bank in dollars, Finance Minister Margaret Mwanakatwe said.

There has been concern about whether the oil-exporter would be able to maintain payments on its single eurobonds due in 2029 ($336 million outstanding). However, Moody’s felt that legal issues were now less likely to result in default. Prices improved a little on the news, but this bond continues to trade in a country-specific manner.

Ghana received a credit rating upgrade in September. This followed a story of reform since the 2016 election, efforts to realise the lowest fiscal deficit in 14 years, and better communication with the markets. This was one of only two rating upgrades for the continent in 2018. Meanwhile five other African countries have been downgraded in 2018 ( Zambia, Kenya, Angola, Tunisia and Gabon).

NB This is not investment advice. This is for informational purposes.