AFRICA NEEDS GOOD PRICE
BLOOMBERG - Sub-Saharan Africa faces a potential debt crunch unless commodity prices improve and boost the pace of economic growth.
The region's median government debt level will probably exceed 50 percent of gross domestic product this year from 34 percent in 2013, while the cost of servicing the liabilities will average almost 10 percent compared with half that four years ago, the International Monetary Fund said. There are no investment-grade dollar-debt issuers in sub-Saharan Africa after Moody's Investors Service and Fitch Ratings Ltd. cut Namibia to junk this year.
Commodity returns have dropped in six of the past seven years and expectations for slower growth in China, the biggest consumer, don't bode well for African nations that depend on mining, crops and oil for the bulk of their income. The region's growth may average 2.6 percent this year, almost double 2016's level but barely above population expansion, with delays in making policy changes risking this, the IMF said in October.
"Rising debt levels present a major risk to progress in sub-Saharan Africa, especially if there is another major shock in the global commodity market and if African markets are still in a recovery stage in the economic cycle," Gaimin Nonyane, London-based economic-research head at Ecobank Transnational Inc., said by email.
Nigerian debt-sale plans will more than double its outstanding U.S.-currency bonds to about $9 billion. That will add to issuances by South Africa, Ghana, Senegal, Ivory Coast and Gabon.
Policy uncertainty in South Africa and Nigeria, the region's biggest economies, are restraining growth, with the IMF reducing their 2017 expansion forecasts to below 1 percent for the two nations.
In Kenya, the central bank said the nation can't continue its current debt build-up path if it's to remain sustainable. Authorities are also negotiating with the IMF to rollover a standby facility of $1.5 billion.
The number of sub-Saharan African countries in or at risk of debt distress almost doubled to 12 over the past four years, while Mozambique -- which defaulted this year -- is among those engaging creditors to restructure debt. Gabon, Ghana and Zambia are most susceptible to the risk of financing stress given large Eurobond maturities in the next decade, according to Moody's, which said sub-Saharan Africa sovereign downgrades outnumbered upgrades 20 to two since 2015.
"We don't envisage a debt crisis, but it's clearly a risk for a handful of countries," William Jackson, a London-based economist at Capital Economics, said by phone.
With no long track record of repaying international bonds, it will be a test for nations like Ghana, scheduled to make a principal payment of $2.75 billion through 2026, Moody's said in a report last month. Gabon owes $2.2 billion by 2025, and Zambia $3 billion from 2022 to 2027.
"If commodity prices fall, or capital inflows to emerging markets are low, then these countries will struggle to roll over these debts," Jackson said. "They may then need to pay higher interest rates or suffer from weaker currencies."
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WNA - Apart from adding capacity, utilisation of existing plants has improved markedly since 2000. In the 1990s capacity factors averaged around 60%, but they have steadily improved since and in 2010, 2011 and 2014 were above 81%. Balakovo was the best plant in 2011 with 92.5%, and again in 2014 with 85.1%.
WNA - India has a flourishing and largely indigenous nuclear power programme and expects to have 14.6 GWe nuclear capacity on line by 2024 and 63 GWe by 2032. It aims to supply 25% of electricity from nuclear power by 2050.
WNA - Mainland China has 38 nuclear power reactors in operation, about 20 under construction, and more about to start construction. The reactors under construction include some of the world's most advanced, to give a 70% increase of nuclear capacity to 58 GWe by 2020-21. Plans are for up to 150 GWe by 2030, and much more by 2050.
PLATTS - "The domestic uranium mining industry needs US government assistance to survive the foreign onslaught -- particularly from Russia and Kazakhstan -- that has undermined the US uranium industry while new players -- particularly China -- will soon make the situation worse," Energy Fuels and Ur-Energy said in a petition they jointly filed with the department.