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issue 590 | 20 Apr 2025

World

Emerging markets face a perfect storm

Emerging economies are bracing for what could become a new sovereign debt crisis. Debt in Sub-Saharan Africa has roughly doubled in the last decade, with interest payments squeezing out fundamental state spending. According to the International Monetary Fund (IMF) and World Bank, 13 countries are at significant risk of financial crisis, with seven countries already unable to satisfy obligations. Ghana, Zambia, and Ethiopia have defaulted or entered into restructuring (IMF). Eurobond issuance is unusual and costly, such as Kenya's recent 9.75% bond (Center for Global Development). The G20's Common Framework sought to streamline restructuring, but implementation has been delayed (Reuters). Zambia's case lasted three years. Even completed transactions, such as Chad's, provided little tangible relief. Meanwhile, aid flows are dwindling, and Chinese lending has slowed (Reuters), forcing many countries to choose between austerity and default. Public dissatisfaction is escalating, leading to increased social tensions throughout the region. Protests in Ghana and Nigeria illustrate growing dissatisfaction with austerity measures and rising inflation. The challenges hinder reform initiatives and heighten the risk of political instability, thereby necessitating a more urgent approach to debt resolution.

Source: IMF PFM Blog

World

How rising geopolitical risks weigh on asset prices

Global geopolitical risks remain elevated, raising concerns about their potential impact on economic and financial stability. Shocks such as wars, diplomatic tensions, or terrorism can disrupt cross-border trade and investment. This can hurt asset prices, affect financial institutions, and curtail lending to the private sector, weighing on economic activity and posing a threat to financial stability. Such risks are challenging for investors to price due to their unique nature, rare occurrence, and uncertain duration and scope. This can lead to sharp market reactions when geopolitical shocks materialise. As shown in a chapter of the latest Global Financial Stability Report, stock prices tend to decline significantly during major geopolitical risk events, as measured by more frequent news stories mentioning adverse geopolitical developments and associated risks. The average monthly drop is about 1 percentage point across countries, though it is a much larger 2.5 percentage points in emerging market economies.

Source: IMF Blog

World

IMO approves net-zero regulations for global shipping

The International Maritime Organization (IMO) has achieved another important step towards establishing a legally binding framework to reduce greenhouse gas (GHG) emissions from ships globally, aiming for net-zero emissions by or around 2050. The IMO Net-Zero Framework is the first in the world to combine mandatory emissions limits and GHG pricing across an entire industry sector. Approved by the Marine Environment Protection Committee during its 83rd session from 7–11 April 2025, the measures include a new fuel standard for ships and a global pricing mechanism for emissions. These measures, set to be formally adopted in October 2025 before entry into force in 2027, will become mandatory for large ocean-going ships over 5 000 gross tonnage, which emit 85% of the total CO2 emissions from international shipping. Closing the meeting, IMO Secretary-General Mr Arsenio Dominguez commended the spirit of cooperation and commitment demonstrated by member states. He stated: “The approval of draft amendments to [the International Convention for the Prevention of Pollution from Ships (MARPOL)] Annex VI mandating the IMO Net-Zero Framework represents another significant step in our collective efforts to combat climate change, to modernise shipping and demonstrates that IMO delivers on its commitments.”

Source: IMO

Africa

Shadow AI: the risks of the AI you don’t see

AI is transforming modern business, but not all usage of AI within an organisation is visible to internal governance structures, (information technology) IT, or risk management teams and could pose a risk to businesses if not actively monitored and controlled. The term "Shadow AI" refers to AI tools that are adopted by employees or business units without the knowledge or approval of an organisation’s internal governance structures or IT department. Much like shadow IT, shadow AI can emerge when employees use AI tools, such as generative AI and other AI tools, outside the confines of official policies, such as an AI governance policy or risk management policy. While these tools often enhance efficiency and productivity, they introduce significant risks to organisations if they are used without proper checks and balances. Shadow AI presents various legal, security and operational risks that can compromise an organisation’s compliance, data security and overall AI governance.

Source: ENS

Africa

Sixth Africa climate talks conclude with unified demand for climate justice and finance reforms

African governments, international organisations and other development partners closed the Sixth Africa Climate Talks in Kampala, Uganda, with a forceful call for the 2025 United Nations Climate Change Conference (COP30) to advance a just and inclusive global climate agenda. Uganda’s Prime Minister, Robinah Nabbanja opened the event, which took place under the theme Rethinking financing and ambition for climate action, green growth and development in Africa: a justice issue, with the aim of building African consensus ahead of the 30th climate conference in Brazil later this year. The African Development Bank (AfDB), a strong voice for climate action across the continent, joined with the African Union Commission and the United Nations Economic Commission for Africa to host the talks in partnership with the Uganda Parliamentary Forum, the Pan-Africa Climate Justice Alliance, the Global Centre on Adaptation, and the United Nations Children's Fund. The meeting closed on 8 April. Outcomes from the talks will build consensus around a common continental position at the Africa Climate Summit expected to take place in September in Ethiopia, and COP30 in November 2025 in Belem, Brazil.

Source: AfDB

East Africa

East Africa launches regional unified stock market index

The East Africa Securities Exchange Association (EASEA), an umbrella body representing securities exchanges and depositories in the region, has announced that it has launched a regional stock market index. EASEA said the launch of the East Africa Exchanges (EAE) 20 Share Index marks a significant milestone in the integration and development of the region's capital markets. “The introduction of the first regional index marks a significant milestone in the growth and deepening of East African capital markets and their economies,” said Frank Mwiti, CEO of the Nairobi Securities Exchange, in a statement issued in Nairobi, the capital of Kenya. The EAE 20 Share Index is a market capitalisation-weighted index comprising a cross-section of the top 20 publicly listed companies from multiple sectors across the Nairobi, Tanzania, Uganda and Rwanda stock exchanges. According to EASEA, the initiative introduces the first-ever regional market index designed to track the performance of East Africa's most prominent listed companies, while enhancing visibility, investor confidence and cross-border investment within the region.

Source: Xinhua

Benin

IMF reaches staff-level agreement on the sixth review of the EFF and the ECF arrangement and the third review of the RSF arrangement

An International Monetary Fund (IMF) team, led by Frederic Lambert, visited Cotonou from 1-11 April 2025, to hold discussions on the sixth review of Benin’s economic and financial programme supported by the Extended Fund Facility (EFF) and Extended Credit Facility (ECF) and the third review of the Resilience and Sustainability Facility (RSF) arrangement. At the end of the mission, Mr Lambert issued the following statement, in part: “Benin’s authorities and IMF staff have reached a staff level agreement on policies to complete the sixth review of Benin’s 42-month blended EFF/ECF-supported programme and the third review of the RSF-supported arrangement, subject to approval by IMF management and the Executive Board. Consideration by the IMF’s Executive Board is expected in June 2025. The economic transformation in Benin continues, with higher value-added goods exports and momentum in information technology. Economic activity was stronger than expected, with a growth rate of 7.5% in 2024, about one percentage point higher than the initial projection of 6.5%. Growth is expected to remain strong in the medium term.”

Source: IMF

Burundi

IMF staff completes 2025 Article IV mission to Burundi

An International Monetary Fund (IMF) team led by Alexandre Chailloux visited Burundi from 17-28 March to hold meetings with the Burundian authorities and other counterparts from the public and private sectors for the 2025 Article IV annual consultation. Discussions focused on policies to ensure macroeconomic stability, and the structural reform agenda needed to durably buttress growth, entrench debt sustainability, strengthen financial sector stability, reduce poverty and reinforce resilience to climate-related risks. The Burundian economy recorded a slight acceleration of growth in 2024 but continues to face challenges. GDP growth reached 3.5% in 2024, against 3.3% in 2023. Yet, Burundi’s well-identified potential and growth prospects are undermined by macroeconomic instability as well as structural weaknesses. High inflation, pressures on the parallel exchange rate, limited foreign exchange reserves, and protracted fuel shortages continue to weigh on economic activity. Growth is expected to decline in 2025 but will recover gradually in the medium term. Limited foreign reserves lead to further fuel restrictions and key imports compression, constraining growth in 2025. Production goods imports are lower, inhibiting secondary and tertiary activities.

Source: IMF

Ethiopia

GERD 98.66% complete, six units operational, review shows

The Grand Ethiopian Renaissance Dam (GERD) has reached 98.66% completion, with six of its generating units currently operational, according to a progress update presented during the federal government’s nine-month performance review for the 2017 E.C. fiscal year. Prime Minister Abiy Ahmed officially launched the review session recently, which opened with a macroeconomic presentation highlighting key national achievements across economic, infrastructural, and social development sectors. The update on GERD underscored the project’s continued advancement as one of Ethiopia’s flagship infrastructure investments. Officials noted that the dam is now nearing full completion and plays a critical role in boosting the country’s electricity generation capacity and regional power exports.

Source: Fana Broadcasting Corporate

Ghana

IMF reaches staff-level agreement on the fourth review of the ECF with Ghana

An International Monetary Fund (IMF) staff team, led by Mr Stéphane Roudet, Mission Chief for Ghana, held meetings in Accra from 2-15 April 2025, to discuss progress on the authorities’ policy and reform priorities in the context of the fourth review of Ghana’s three-year programme under the Extended Credit Facility (ECF). The arrangement was approved by the IMF Executive Board for a total amount of SDR2.242-billion (about USD3-billion) on 17 May 2023. At the end of the mission, Mr Roudet issued the following statement, in part: “IMF staff and the Ghanaian authorities have reached a staff-level agreement on the fourth review of Ghana’s economic programme under the [ECF] arrangement. This staff-level agreement is subject to executive board consideration. Upon completion of the executive board review, Ghana would have access to SDR267.5-million (about USD370-million), bringing the total IMF financial support disbursed under the arrangement, since May 2023, to SDR1 708-million (about USD2 355-million).”

Source: IMF

Guinea-Bissau

IMF staff completes mission to Guinea-Bissau

A staff team from the International Monetary Fund (IMF) led by Niko Hobdari visited Bissau from 2-10 April 2025, to hold discussions on the 2025 Article IV consultation and on the economic policies to support the completion the of the eighth review of the Extended Credit Facility (ECF) arrangement. The initial arrangement was approved by the IMF Executive Board for a total amount of SDR28.4-million (about USD37.8-million) on 30 January 2023. The IMF Executive Board granted an augmentation of access of 40% of quota (SDR11.36-million) on 29 November 2023. At the conclusion of the mission, Mr Hobdari issued the following statement, in part: “The IMF staff team had constructive and productive discussions with the Guinea-Bissau authorities, who reaffirmed their strong commitment to the ECF programme objectives. Guinea-Bissau’s economy remains resilient, despite a moderation of growth in 2024 to 4.7% from 5.2% in 2023, in part reflecting weaker cashew exports and weather shocks to agricultural production. More favourable terms of trade are expected in 2025, which should improve the external position and support economic growth. The budget deficit this year is expected to fall to 3% of GDP, in line with the ECF programme target. While the economic outlook remains favourable, it is subject to significant domestic and external risks.”

Source: IMF

Kenya

Tullow agrees heads of terms for sale of Kenyan assets for USD120-million

Tullow Oil plc (Tullow) has announced that its wholly-owned subsidiary, Tullow Overseas Holdings BV, has signed a heads of terms agreement with Gulf Energy Ltd to sell Tullow Kenya BV, which holds Tullow’s entire working interests in Kenya, for a total consideration of at least USD120-million (the Transaction). The consideration will be split into a USD40-million payment due on completion, USD40-million payable at the earlier of Field Development Plan (FDP) approval or 30 June 2026, and USD40-million payable over five years from the third quarter of 2028 onwards. In addition, Tullow will be entitled to royalty payments subject to certain conditions. Tullow also retains a back-in right for a 30% participation in potential future development phases at no cost. The Transaction is accretive to both equity and leverage and further accelerates Tullow’s deleveraging process. This Transaction will constitute a significant transaction for the purposes of UKLR 7 of the UK Listing Rules (as came into effect on 29 July 2024). Further announcements will be made in due course upon full form transaction documentation being entered into by the parties.

Source: Tullow

Kenya

Walking the talk on climate action: Kenya’s Green Finance Taxonomy

On 4 April 2025, the Central Bank of Kenya issued the first edition of the Kenya Green Finance Taxonomy (the KGFT) and Climate Risk Disclosure Framework for the banking sector. A draft of the KGFT was published for public commentary on 12 April 2024. Please see our previous report on the publication of the draft KGFT here. The first edition of the KGFT was initially developed for the banking sector as an entry point to the broader financial sector. It applies to commercial banks and mortgage finance companies licensed under the Banking Act (chapter 488 of the Laws of Kenya) for application on a voluntary basis for a period of 18 months from the date of issuance. Thereafter, implementation will be mandatory. It is eventually expected to expand to the wider financial sector in subsequent editions. A green taxonomy is a classification system that provides clarity on which investments are environmentally sustainable and, by extension, those that are not. It defines a minimum set of assets, projects, activities, and sectors that are eligible to be defined as “green” or “climate-aligned” in line with international best practices and Kenya’s national priorities.

Source: ENS

Madagascar

IMF reaches staff-level agreement on the second reviews of the ECF and the RSF arrangements

An International Monetary Fund (IMF) team, led by Constant Lonkeng, visited Antananarivo from 2–14 April 2025 to hold discussions on the second reviews of Madagascar’s economic programme under the Extended Credit Facility (ECF) and the Resilience and Sustainability Facility (RSF) arrangements, approved by the IMF Executive Board in June 2024. At the end of the mission, Mr Lonkeng issued the following statement, in part: “IMF staff and Malagasy authorities have reached a staff-level agreement on policies to complete the second reviews of Madagascar’s three-year ECF and RSF. Pending completion of some actions and subject to approval by the IMF Executive Board, Madagascar will receive a disbursement of SDR36.66-million (about USD51-million) under the ECF arrangement and SDR40.73-million (about USD57-million) under the RSF arrangement.”

Source: IMF

Madagascar / Tanzania

AXIAN Telecom receives USD100-million investment from EIB Global for mobile broadband network expansion in Madagascar and Tanzania

The European Investment Bank (EIB Global) has announced a financing package of USD100-million to AXIAN Telecom to support the expansion of its mobile broadband network infrastructure across Madagascar and Tanzania. The project will expand 4G mobile broadband network infrastructure across the two countries as well as continuing the introduction of 5G coverage. This new Global Gateway investment, backed by a budgetary guarantee of the European Commission, will enhance access to high-speed communications, accelerate inclusive digitalisation, and drive sustainable development across the two countries. This investment will help reduce geographic inequality of telecommunications access in Africa and emerging markets. AXIAN Telecom is a leading pan-African telecommunications company with a strong market position in its core areas of operation. AXIAN Telecom currently serves over 44 million subscribers and is present in nine sub-Saharan African countries with its key mobile and fixed operations being in Tanzania, Madagascar, Senegal, Togo and Comoros. USD60-million of the financing will benefit Tanzania and USD40-million will go to Madagascar. AXIAN Telecom operates under the Yas brand in both countries.

Source: EIB Global

Mauritius

IMF staff completes 2025 Article IV mission to Mauritius

An International Monetary Fund (IMF) mission led by Mariana Colacelli visited Mauritius from 31 March to 11 April 2025 to conduct the 2025 Article IV consultation. At the conclusion of the visit, Ms Colacelli issued the following statement, in part: “Real GDP grew by a robust 4.7% in 2024, driven by services, construction, and tourism. The growth outlook is favourable, supported by the services sector. However, real GDP growth is projected to soften to 3.0% in 2025 due to weakening external demand, easing tourism activity, and the severe drought. Headline inflation is projected to remain contained in 2025. Inflation eased in 2024 to 3.6% from 7.0% in 2023. Inflation was 2.5% in March, remaining within the Bank of Mauritius’ target range of 2-5%, driven by declining international food and energy prices, and lower fuel excise duties. The external current account deficit is estimated to have widened in 2024 while foreign reserves increased to USD8.4-billion at end-2024.”

Source: IMF

Nigeria

AfCFTA: Nigeria waives duties on 90% of goods traded in Africa

Reinforcing Nigeria’s commitment to regional trade expansion, President Bola Tinubu has signed the Economic Community of West African States (ECOWAS) Schedule of Tariff Offers, establishing zero duties on 90% of goods traded within Africa. This will enhance Nigeria’s market competitiveness and expand trade opportunities across Africa, as Nigerian goods are competitively positioned in the African market. It will also ensure greater business access and profitability. At the African Continental Free Trade Area (AfCFTA) Council of Ministers meeting in Kinshasa, Democratic Republic of the Congo, the president officially signed and submitted the ECOWAS Tariff Offer, strengthening the country’s role in shaping the future of African trade and unlocking new opportunities for businesses and exporters. At the meeting, Nigeria also gazetted its AfCFTA Provisional Schedule of Tariff Concessions, becoming the 23rd AfCFTA state party to comply. This will further enhance transparency while ensuring that businesses, organisations and citizens are informed of new regulations coming into force and mark a key step towards the full implementation of the AfCFTA Agreement. For traders, this provides clarity and certainty, confirming that Nigeria will grant preferential tariff treatment to all eligible goods upon importation, in line with its commitments under the AfCFTA Agreement.

Source: The Guardian

Nigeria

Nigeria’s Cross River State second to commence construction of its Special Agro-Industrial Processing Zone

Nigeria’s Cross River State became the second to mark construction of a Special Agro-Industrial Processing Zone (SAPZ) after the country’s Vice President Kashim Shettima and African Development Bank (AfDB) President Dr Akinwumi Adesina broke ground at the project site on Thursday 10 April. The SAPZ aims to tackle food insecurity, enhance local production, and position Nigeria as a food export leader by leveraging Cross River’s ports and research assets to boost global trade, reduce food imports, and drive prosperity through the agro-industrialisation of crops like cocoa and cassava. The groundbreaking in Cross River follows that of Kaduna which took place a few days earlier. Six other states - Kano, Kwara, Imo, Ogun, Oyo, and the Federal Capital Territory – are included in Phase 1 of the USD538-million SAPZ programme, with plans to expand to the remaining 28 states this year pending the AfDB’s Executive Board approval for Phase 2 funding.

Source: AfDB

Uganda

Protection of financial sector consumers takes a knock

Not for the first time, the Bank of Uganda Financial Consumer Protection Guidelines have been disregarded by the court, leaving a borrower exposed. The Bank of Uganda Financial Consumer Protection Guidelines 2011 set standards for banks dealing with their customers, ensure fair treatment of customers, increase transparency and provide for consumer complaints. However, the Guidelines have not been published as law by the Bank of Uganda despite its power to do so. The name “guidelines” is also disconcerting in the cold, hard world of banker-customer relations. It suggests nice-to-haves and not the befitting firm obligations! In fairness, the Bank of Uganda has issued several guidelines to banks, usually in the form of circulars, my favourite of which is the 2008 guidelines on the Four Eyes Principle. These circulars are usually in relation to the Bank of Uganda and the banks. The reaction of the courts to these guidelines has evolved from benign acceptance to outright rejection!

Source: ENS

Uganda / Rwanda

TotalEnergies expands renewables portfolio with Uganda, Rwanda deals

The lead investor in Uganda’s oil sector, TotalEnergies announced that it has closed the acquisition of Norwegian energy firm SN Power, giving the French giant a 28.3% stake in the Bujagali hydroelectric plant, as well as interests in two projects under development in Rwanda and Malawi. The acquisition of SN Power will enable TotalEnergies to implement its multi-energy strategy in Uganda, where the company has been actively involved in oil and gas exploration and production in the Albertine region, along with downstream operations. Bujagali is a 250 MW hydropower plant that currently provides about 25% of Uganda’s peak electricity demand. In 2016, SN Power acquired a portion of the stake held by American firm Sithe Global Power Llc in the project. On 28 February, Norwegian company Scatec – formerly majority owner of SN Power – completed the USD167-million sale of its 51% interest in the Africa-focused hydropower developer to TotalEnergies. Norwegian Investment Fund for Developing Countries and British International Investment are minority shareholders in SN Power. This deal, along with two other acquisitions in Europe and North America, has been in progress since July of last year.

Source: The EastAfrican

Zambia / Tanzania

Connecting people, empowering communities: Zambia-Tanzania interconnector launched to strengthen regional energy security and climate resilience

The Government of Zambia, the World Bank, the European Union (EU), and the United Kingdom (UK) launched the Zambia-Tanzania Power Interconnector project. The project launch marks a milestone in strengthening regional energy trade, improving the resilience of Zambia’s electricity sector, and supporting inclusive green growth across eastern and southern Africa. The Interconnector will enable the exchange of electricity between the Southern African and Eastern African Power Pools through a 620-km high-voltage transmission line from Pensulo in Zambia to Nakonde at the Tanzanian border. It will significantly expand Zambia’s ability to import and export electricity, helping to mitigate the impact of recurring droughts on the country’s hydro-based power system. The Zambia-Tanzania Interconnector is co-financed by the World Bank with a grant of approximately EUR220-million, the EU contributing EUR30-million, and the UK Government through the Foreign, Commonwealth & Development Office with EUR18-million. The project will be implemented by ZESCO, with institutional support to the Ministry of Energy and the Office for Promoting Private Power Investment.

Source: EU External Action