A rally in Africa’s dollar bonds is stumbling as long-term US plans to boost crude from Venezuela dim the appeal of debt from oil exporters on the continent.
While a complete overhaul of Venezuela’s oil industry would likely take years, crude prices are already down almost 20% in the past year. Photographer: Gaby Oraa/Bloomberg
African credit markets may disappoint investors hoping for a repeat of last year’s stellar returns, according to hedge fund Enko Capital Management LLP, which is seeking out trades to cushion against setbacks in the continent’s top performing assets.
Pockets of distress remain in Africa, with Senegal’s yield spread versus Treasuries standing at over 1,000 basis points.
Zambia’s kwacha faces risks in the coming weeks that may snap a year-end rally that has extended into 2026 and made it the world’s best-performing currency.
Citigroup Inc. sees an increased risk of currency devaluations in Africa this year after a relatively stable 2025, as low oil prices pressure economies such as Angola, Algeria and Gabon.
Ethiopia’s sole eurobond rallied almost 3 cents on the dollar after the government reached an agreement in principle with bondholders on a restructuring that would impose a relatively modest 15% haircut on the $1 billion note it defaulted on two years ago.
Pedestrians walk on a newly built walkway in Addis Ababa, Ethiopia.
Ethiopia says it reached an agreement in principle with bondholders over the restructure of a $1 billion bond on which it defaulted in 2023, and sees progress in efforts to revamp the debt this year.
Pedestrians near Merkato open-air marketplace in Addis Ababa, Ethiopia, on Thursday, Jan. 9, 2025. Ethiopia is opening a stock exchange after a five-decade gap, in its latest step to lure investors to a nation that’s struggling to control regional strife as it recovers from a civil war. Photographer: Amanuel Sileshi/Bloomberg
Zambia’s kwacha traded near the highest in more than two years, as a government order to curb the use of foreign currencies in domestic transactions prompted traders to sell the greenback.
A street currency dealer counts US dollars and Zambian kwacha banknotes in Lusaka, Zambia. Photographer: Luke Dray/Bloomberg
Gold’s rally and a buildup in foreign-exchange reserves have helped Zimbabwe’s bullion-backed currency pare most of its decline against the dollar this year.
Zambia’s kwacha rose, joining a rally in the currencies of other African metal producers, as a surge in the price of copper promises to boost export earnings.
Bundles of copper at the New Kapiri Mposhi train station, in Zambia. Photographer: Zinyange Auntony/Bloomberg
African governments will turn to unconventional ways to meet financing costs expected to reach almost $83 billion next year, the highest level since 2021, according to BMI.
More African countries are likely to issue foreign-currency debt in currencies other than the dollar and euro, BMI said.
Indexes for emerging-market assets declined as concerns persisted around AI-related stocks, and traders stepped back from boosting wagers on more Federal Reserve rate cuts following the latest US jobs data.
Indexes for emerging-market assets declined as concerns persisted around AI-related stocks, and traders stepped back from boosting wagers on more Federal Reserve rate cuts following the latest US jobs data.
Ivory Coast’s dollar-denominated bonds rose after Fitch Ratings Inc. upgraded the country’s debt, leaving it now just two levels below investment grade at all three major rating companies.
Farmers drop off their cocoa bean harvest a community buying center in Daloa, Ivory Coast, on Thursday, Oct. 26, 2023. Cocoa prices are at an all-time high as production in West Africa declines. Now an EU regulation meant to stop deforestation threatens to push prices even higher.
Mozambique bonds were among top performers in emerging markets after the country’s president said he expects to secure a new International Monetary Fund funding program early next year.
A surge in the Democratic Republic of Congo’s foreign-currency holdings and a shift in central-bank policy have fueled an almost 29% rally in the franc this year, making it Africa’s best-performing currency against the dollar alongside the cedi.
Currency notes wrapped in a currency trader’s cabin at a market in Kinshasa, Democratic Republic of Congo.
A surge in the Democratic Republic of Congo’s foreign-currency holdings and a shift in central-bank policy have fueled an almost 29% rally in the franc this year, making it Africa’s best-performing currency against the dollar alongside the cedi.
Currency notes wrapped in a currency trader’s cabin at a market in Kinshasa, Democratic Republic of Congo.
Zimbabwe doesn’t intend to completely wean itself off utilizing the US dollar, even as it moves toward adopting the ZiG as its primary currency by 2030.
A twenty ZiG banknote at a market in Harare, Zimbabwe.
Zimbabwe will introduce a new royalty structure for gold miners as the mineral-rich southern African nation seeks to cash in on a surge in the price of the metal.
The central business district of Harare. Photographer: Cynthia R Matonhodze/Bloomberg
Zambia’s dollar bonds rose after S&P Global Ratings ended its default rating for Southern African country, five years after it became the continent’s first pandemic-era sovereign defaulter.
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