DeniAfrica

Vanguard news reports:

In a letter to the Senate President dated May 24, 2006, President Obasanjo said his administration was following up its recent action in paying off the country’s debts to the Paris Club by settling the outstanding debts to the London Club of creditors. Debts owed to the Paris Club are obligations to some foreign creditor nations, while the London Club of creditors is a grouping of institutional and private sector commercial debts. The London Club debts are made up of Promissory Notes, Par Bonds and associated Oil Warrants. President Obasanjo said these categories of debts were traded in the international market.

The IPS reports that Securitized Remittances have played a role in mainitaining stability for financial institutions within Latin America:

“Securitising remittances,” as the process is called, was first executed by Mexican banks during the 1994-95 peso crisis, and has since become an increasingly attractive way for financial institutions in Latin America to remain operable, particularly in times of economic and political uncertainty. Globally, between 1994 and 2000, El Salvador, Mexico and Turkey raised a total of 2.3 billion dollars through remittance-backed bonds. Since 2000, Brazil, El Salvador, Kazakhstan, Mexico, Peru and Turkey raised more than 10 billion dollars, largely backed by future remittances.

In a related development Banco Sol is exploring methods of funneling remittance flows to the burgeoning microcredit sector:

Microfinance International, led by Atsumasa Tochisako, a former Latin America official with Tokyo-Mitsubishi bank…announced a tie-up with Banco Sol and a money-transfer company, with the idea of channelling remittances to microcredit. It has also signed deals with HSBC and others to explore possibilities in Mexico and central America. Mr Tochisako raised his first $6m from wealthy Japanese investors but is now aiming for institutional funding.

Inter Press Service News Agency states that:

A new report by the self-auditing arm of the World Bank has painted a grim picture of the results of a decade-long plan by the Bank and the International Monetary Fund (IMF) to give the world’s poorest nations debt relief.
The report by the Washington-based Independent Evaluation Group (IEG) says that in half the countries that received debt relief under the programme known as the Highly Indebted Poor Countries (HIPC) initiative, debt has in fact climbed back up to where it was before the debt relief plan.
So far, the HIPC initiative has eased 19 billion dollars of debt in 18 countries, halving their debt ratios. However, the IEG found that in 11 of the 13 countries the report studies, and which graduated from the programme that qualifies them to start receiving debt forgiveness, called the completion-point, external debt has actually risen.

A paper by Fekru Debebe states that

Privatization is an idea whose time has come and it should be an integral part of the new thinking in the design of development strategy for Africa. It is a viable instrument for introducing change and modifying future development strategies. It is a powerful economic force for unleashing the entrepreneurial talent which has been thriving in the informal sector. It is this aspect of privatization that is important to the long-term prospects for African economic development. The African entrepreneur must be an integral part of the future development strategies.

via AfricaUnchained

IPEG reports on the securitization of Microfinance:

BlueOrchard Finance SA, a Swiss investment-management boutique, has teamed up with Morgan Stanley to turn these loans — called microfinance — into bonds, using the capital markets to provide small business in the developing world with long-term financing. continue reading…

Frederick’s Kwoba’s DENI presentation at the The Ministerial Conference of the Least Developed Countries on “Enhancing the Development Impact of REMITTANCES” stated that :

The thrust of this conference suggests that we are searching, indeed looking, to go to the next level. Africans in the Diaspora have resolved to go to the next level as level as well – engage in Large Scale Investment opportunities for purposes of poverty reduction. So why haven’t we done it? The honest answer is that if we could, we would have done so already.ADB/World Bank/UNDP: For us to move to the next level of large-scale investments, we need a formal structure as well as credible institutions like ADB/World Bank/UNDP to stand with us. We are not looking for money from ADB/World Bank/UNDP. All we need is ADB/World Bank/UNDP to stand by us as a confidence booster to encourage Africans to pool their resources for large-scale investments.
DENI: Direct Expatriate Nationals Investment: We have developed a program called DENI that was designed to bring Africans together to pool their resources for large-scale investments in their home country. This will be done country-by-country, meaning Beninese will have their own DENI Program for Benin, Ghanaians will have their own DENI Program for Ghana, Malians will have their own DENI Program for Mali, Nigerians will have their own DENI Program for Nigeria and so on down the line until we get to Zimbabweans with their own DENI Program for Zimbabwe.

The Punch Newspaper reports

The Bureau of Public Enterprises has shortlisted six companies for the negotiated sale of 51 per cent of government’s equity in the Nigerian Telecommunications Limited… Following two botched attempts to sell the country’s first national carrier, the BPE on May 4, 2006 dropped the option of competitive bidding and adopted a negotiated sale approach for the privatisation…“We have a list of preferred and reserve companies. There are some on the preferred list and also some on the reserve list. The companies will go and do due diligence on the telecommunications firm. We are looking forward to concluding this transaction before the end of June 2006.”

African Financial Markets reports:

The privatization of the Power Holding Company of Nigeria (PHCN) formerly National Electric Power Authority (NEPA), might have gone into limbo as it was learnt that a powerful cabal consisting of top government officials in the Ministry of Power and Steel and collaborators in the company were frustrating its sale to the private sector. NEPA, now PHCN, arguably received more funds from the President Olusegun Obasanjo administration, since its inception in May 1999, than any single government enterprise, yet power supply has remained abysmal, in what has come be seen as, a conspiracy between government officials and generator dealers. However, officials of the Bureau of Public Enterprises (BPE) said the allegation of cabals frustrating the sale of what remained of former NEPA as they claimed to be waiting for the Corporate Structural Advisers, to be appointed by the World Bank, before going ahead. For more than two years, the BPE had set several targets for the transfer of the nations electricity sector private operators to give the comatose sector a new lease of life, particularly with the steady reduction in power generation in the last one year.

Reuters reports on Cameroons debt cancellation:

“Cameroon has made sufficient progress and taken the necessary steps to reach its completion under the Enhanced Heavily Indebted Poor Countries (HIPC) initiative,” the IMF and World Bank said in a joint statement.”To reach the completion point, Cameroon met a number of triggers involving macroeconomic stability, commitment to a poverty reduction strategy, investment in social services as well as progress in privatization and reform of the forestry and transport sectors,” they said, adding that the country also took steps to tackle corruption and improve transparency. In addition, Cameroon’s graduation from the HIPC initiative also makes it eligible for a further $1.13 billion debt write-off from the three lenders under the more recent and separate Multilateral Debt Relief Initiative (MDRI), agreed by the Group of Eight major industrialized countries in June 2005.”

via GhanaWeb:

Standard and Poors’ outlook adjudges the country’s sovereign credit outlook to be stable. This is based on an expectation of continued prudent economic policies that foster stability and growth.
The report indicates that the rating could improve if progress is made on structural reform particularly privatization and broadening of the narrow base of the economy.
According to standard and poor, a reduction in the current account deficit and evidence that the financial of deficits is not undermining debt sustainability would also augur well for the ratings.
According to a business week report, “Conversely, any indication that the greater fiscal flexibility afforded by debt forgiveness is being misdirected or that Ghana is embarking on policies that endanger relations with donors would undermine ratings prospects”.