South Africa records budget deficit of $704mln in March

South Africa recorded a budget deficit of R13.11bn ($704m) in March 2025.
This is compared with a surplus of R3.36bn in the same month last year, National Treasury data showed on Wednesday, 7 May 2025.
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Sfundo Parakozov

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Zawya

4 days ago

• Zawya

Kenya banks on Panda bond to fund SGR to Malaba

Kenya has kicked off the process of issuing its first Panda bond as it seeks to plug financing gaps ahead of extending its standard gauge railway (SGR) from Naivasha to Malaba at the border with Uganda – a project heavily reliant on Chinese support. A Panda bond is a sovereign facility issued in the Chinese domestic market and denominated in Yuan Renminbi (RMB), targeting Chinese investors and institutions. Kenya mulls issuing it on the Shanghai Stock Exchange, seeing it as a useful path to fetch new monies for big-ticket projects. National Treasury and Economic Planning Cabinet Secretary John Mbadi says the plan is to diversify Kenya's external financing sources.'We are in the process of actualising, raising more funds through Sukuk and even the Panda bond,' Mr Mbadi told journalists after presenting the 2025/26 budget statement to Parliament on Thursday, referring to sovereign bonds issued in Arab and Chinese markets respectively.'We're diversifying. We're even going to the UAE for other bonds. We don't want to confine ourselves to specific bonds like it has been previously, because there would be serious risk in the event of certain turbulence in those particular markets.'While Mr Mbadi did not disclose the exact purpose of the Panda bond proceeds, sources familiar with the matter say the Yuan-denominated facility is specifically aimed at bridging the funding shortfall for the SGR extension project, seeking to raise at least $1.5 billion. This week, Musalia Mudavadi, Prime Cabinet Secretary and Foreign and Diaspora Affairs Cabinet Secretary, said Kenya was banking on Chinese support to ensure the bond is floated at the start of the next fiscal year.'Panda bond discussions have started and Kenya looks forward to the support of China,' he said after meeting with Chinese counterpart Wang Yi in Changsha, the capital of Hunan province in southern china. China has long stopped issuing concessional loans to African countries but hasbeen gradually opening up to public-private partnerships, grants and permitting foreign governments to fetch funds via sovereign bonds. Kenya had initially agreed with China to co-finance the project, each contributing 30 percent of the required funds, with a consortium of private investors expected to cover the rest. But Nairobi has since expressed difficulty in raising its share and requested additional Chinese support. During President William Ruto's state visit to Beijing in April, the two countries signed a deal to jointly finance the 475-kilometre rail from Naivasha to Malaba, where it is expected to link with Uganda's own SGR extending to Kampala. I also underscored the importance of concluding discussions on financial cooperation before the end of June 2025 as a critical step forward,' Mr Mudavadi said in a dispatch after a meeting with Wang Yi on Tuesday. Lack of a rail link between Kenya and Uganda has meant that most cargo from the Mombasa port is transported by road to Uganda, Rwanda, Burundi, South Sudan and the Democratic Republic of Congo. This overreliance on road transport increases both time and cost. But financing constraints in both Kenya and Uganda have long delayed efforts to complete the Naivasha–Kampala railway connection, pushing both governments to court new financiers for their respective sections. China was the key financier of the first two SGR phases—from Mombasa to Nairobi, and then from Nairobi to the Naivasha dry port—through loans from the China Export-Import (Exim) Bank. The 729-kilometre stretch was built by the China Road and Bridge Corporation, a state-owned firm, at a total cost of about $5 billion. China pulled out of the Malaba extension after Naivasha, citing concerns over its commercial viability and Kenya's rising debt, which raised the risk of loan default — including on Chinese credit. After years of seeking alternative financing, Kenya returned to Beijing, leading to the April agreement in which China will finance only up to 30 percent of the costs, a sharp drop from the 90 percent it had provided for the earlier phases. The Panda bond is expected to cover part of Kenya's reduced contribution. The Treasury has also increased the railway transport budget by Ksh12.8 billion ($99 million) to Ksh38 billion ($293 million) in the 2025/26 fiscal year, up from Ksh25.2 billion ($195 million) in the current year, signalling renewed investment in the sector. If successful, Kenya would become only the second African country after Egypt to access the Chinese capital market through a Panda bond. Cairo raised $480 million via such a bond in October 2023. With concessional funding drying up — following the expiry of an International Monetary Fund (IMF) programme in March — bonds issued in China, Japan, or the UAE appear more attractive, especially as Eurobond yields remain high. As of March, Kenya's total public debt stood at $87.8 billion about 71 percent of GDP, placing the country at high risk of debt distress. International lenders have urged Nairobi to slow down on borrowing, especially for large infrastructure projects. © Copyright 2022 Nation Media Group. All Rights Reserved. Provided by SyndiGate Media Inc. (

Zawya

11-06-2025

• Zawya

Standing Committee on Appropriations Calls for Urgency in Dealing with Municipal Debt to Eskom

The Standing Committee on Appropriations has urged Eskom to collaborate closely with the National Treasury and the Department of Cooperative Governance and Traditional Affairs to ensure that there is full municipal cooperation in the implementation of the Distribution Agency Agreement (DAA) programme. The power utility briefed the committee today regarding the Eskom Debt Relief Bill. The committee expressed deep concern over Eskom's increasing debt levels and that the power utility continues its trajectory towards unsustainable indebtedness. The Chairperson of the committee, Mr Mmusi Maimane said: 'When we examine the various pieces of legislation under consideration by this committee, it is undeniable that Eskom remains a pivotal component. The state of Eskom's liquidity, along with serious concerns raised by municipalities around debt servicing are critical factors, especially in light of the appropriations made to Eskom.' Mr Maimane said he feared that Eskom will be heavily indebted despite being in receipt of the Eskom Debt Relief Bill. The committee further said the lack of urgency in addressing underperforming and financially distressed municipalities, many of which are unable to service their debts to Eskom, is a major contributor to Eskom's debt burden. The committee also highlighted that Eskom was not doing enough to curb the 'ghost tokens' in the pre-paid electricity segment and the failure to address it has contributed to significant revenue losses. Furthermore, the committee recommended that the power utility needs to ensure that it deals decisively with acts of sabotage carried out by its own employees. The committee cautioned that that the power utility needs to begin exploring ways to harness its own energy sources and not rely on independent power producers as this process can easily be influenced by political forces. The committee called on Eskom to urgently implement decisive reforms to address inefficiencies, improve governance, enhance revenue collection, and safeguard its infrastructure. The committee will tomorrow, 11 June receive a briefing from the City of Johannesburg and the City of Mangaung Metropolitan Municipalities on the 2025 Division of Revenue Bill. Distributed by APO Group on behalf of Republic of South Africa: The Parliament.

Zawya

30-05-2025

• Zawya

Mozambique central bank cuts main interest rate to 11%

Mozambique's central bank cut its main interest rate to 11.00% from 11.75% in a decision announced on Friday. The Bank of Mozambique has now lowered its main lending rate for nine policy meetings in a row. The Southern African country's annual inflation rate slowed to 3.99% in April from 4.77% in March, reversing a trend where inflation had been on the rise since October's disputed election. (Reporting by Custodio Cossa; Writing by Sfundo Parakozov; Editing by Alison Williams and Joe Bavier)