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Rand Merchant Bank (RMB): African Risk is not Fairly Priced – Governments Should Take Advantage (By Miranda Abraham)

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Rand Merchant Bank

African banks and investors are desperate for assets and are very comfortable assessing and understanding sub investment grade African risk

JOHANNESBURG, South Africa, October 31, 2023/APO Group/ — 

By Miranda Abraham, Head of Loan Syndications at RMB in London (www.RMB.co.za)

Yield-chasing investors have poured money into the continent but an emerging, recent challenge for Africa is that in a now higher interest rate environment, investors don’t need to come to Africa to find higher returns.

Even US treasuries are now yielding far more attractive yields than just a month ago: 3-month government bonds offer 5.32% and while 2-year bonds offer a yield above 5%. Yields have risen in part in response to Fitch’s recent downgrade of the US from AAA to AA+, echoing S&P’s move in 2011.

African bond issuers, spooked by the high-interest rate environment and refusing to issue bonds above the psychological barrier of double-digit yields for Sub-Saharan African bonds, continue to wait it out on the sidelines.

But with interest rates continuing to climb, the wait-and-see strategy is no longer looking like a sensible approach. Issuers are running out of cash and the more stable and resilient syndicated loan market – with its heavily relationship-driven pricing, is increasingly proving to be an alluring alternative to the bond market.

African governments should therefore bring forward planned borrowing before the capital shifts away, as it is already starting to do, and the cost of borrowing rises further still.

The syndicated loan market is dominated by relationship banks, who will consciously and willingly price a loan at very low yields, in order to secure a lead mandate and lock in the ancillary opportunities and revenues that come with being a core relationship bank. 

Banks do this knowing that they will also be able to persuade other relationship banks to join the deal as well. This is why syndicated loans always tend to price at a subsidized level when compared to bonds – where investors are more agnostic and definitely less loyal – focusing instead on the relative value of opportunities across the market.

However, while bond prices have skyrocketed, the loan market has hardly moved in terms of pricing. Yes, base rates are higher, resulting in higher all-in costs for borrowers, but on an all-in basis, when compared to bonds, issuing a syndicated loan is definitely the cheaper option for borrowers.

But why have African issuers managed to price debt at such attractive levels for so long?

There are three main reasons:

In order to attract their investment into Africa, pricing on these credit enhanced deals has to be highly attractive

  • Finite supply: There is a limited supply of investable assets in Africa and those banks with an African focus are eager to support their key clients and to get exposure to the African market, which is seen as having strong growth potential. 
  • Difficulties in assessing risk: It can be difficult to assess the credit risk of African borrowers. This is because there is less historical data available, and the political, legal and regulatory environment is often complex. Joining a syndicated loan or bond that has been oversubscribed and so carries the stamp of endorsement from the market can be an attractive solution to this challenge.
  • Those issuers that are active in the loan market tend to bring with them an array of other ancillary opportunities (e.g. IPO, Eurobond, and Advisory mandates), in a region where businesses that are succeeding are usually experiencing high growth.

So finite supply leads to fierce competition for these prestigious African clients and the fact that these credits are complex and difficult to understand exacerbates the problem. 

As a result of these factors, African risk is often not being priced fairly. South Africa is a good example of how African risk can be underpriced. Despite losing its investment grade rating in 2017, South African corporates and State-Owned Enterprises (SOEs) continue to price their debt like they are in Western Europe. This is because there is a limited pool of opportunities for those banks that prefer to lend in ZAR to invest in.  

Relationship pricing works for the banks because they are able to use the revenues from ancillary business to subsidize their commitment to the loan, but for regular investors (who are typically looking on an asset play basis) they can end up being short-changed. This means that investors may be taking on more risk than they realise, for a relatively low return.

However, instead of adjusting pricing upwards, the imbalance is being addressed another way – by adjusting risk.

Reducing the risk keeps pricing low and so address issuers concerns around paying double-digit yields.

Risk mitigation tools (in the form of ECA wraps, DFI guarantees or insurance wraps) are being embedded into loans and so while pricing remains low, investors improve their returns through adjusting the risk.

These type of credit risk mitigated deals, result in investment grade ratings, but with a substantial African premium. In the EUR 1bn Bank of Industry deal, BOI/AFC pays a yield of about 200bps versus an average yield of 75ps for an A3 rated credit in Europe. It is the only way for many international and European banks – who typically shy away from low BB or single B African risk – to fill their African buckets. 

These investors have a whole world of investment opportunities available to them, from AAA through to single B risk, usually across the globe, so they can pick and choose their deals.  Consequently, in order to attract their investment into Africa, pricing on these credit enhanced deals has to be highly attractive relative to other similarly opportunities globally.

However for those emerging market investors or African banks focused on Africa, their return hurdle requirements mean that the credit enhanced deals do not work for them. 

Instead, they are obliged to find African opportunities that represent real, uncovered African risk.  However, the market paralysis created by a difficult credit environment, combined with the fact that a large proportion of those deals that do come to market include some form of credit enhancement, means that the pool of deals offering pure, uncovered African risk is now much smaller.

And this is where supply and demand dynamics take over. 

African banks and investors are desperate for assets and are very comfortable assessing and understanding sub investment grade African risk. However this dynamic of fewer deals but strong investor demand has led to plentiful pent up liquidity down the credit curve.

Ironically, once African investors get over the hurdle of higher return requirements (often driven by higher cost of funding) there is such relief that pricing works from a returns perspective, that they can then end up effectively under-pricing the actual credit risk. So we end up with BB- loans paying only 450bps versus BB average bond yields of 12%.

Investors in Africa are a finite pool who know and understand African risk. They deserve to be fairly compensated for the risk they take.  

Distributed by APO Group on behalf of Rand Merchant Bank.

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Congo Is Turning Reserves into Bankable Projects – and the Investment Window Is Opening

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Etu Energias

Eni-led LNG expansion and ongoing deepwater investment are pushing the Republic of Congo’s energy sector toward more bankable projects ahead of the Congo Energy & Investment Forum 2027

BRAZZAVILLE, Congo (Republic of the), June 23, 2026/APO Group/ –With LNG exports set to triple to 3 mtpa, upstream oil production targeting 500,000 bpd and a renewed push on local content, the Republic of Congo is positioning itself as one of Central Africa’s most investable hydrocarbon markets. Under the leadership of the newly-appointed Minister of Hydrocarbons, Stev Simplice Onanga, the country is prioritizing industry growth by balancing local content with reserve replacement and project advancement.

 

What sets Congo apart is not the scale of its reserves, but the pace at which those reserves are being turned into commercially viable projects. From Eni’s LNG expansion and TotalEnergies’ deepwater developments to brownfield optimization by Trident Energy and output growth at Ammat Global Resources, capital is flowing into projects with clearer monetization pathways and nearer-term returns.

Ahead of the Congo Energy & Investment Forum (CEIF) 2027 – the country’s leading platform for energy investment and partnerships – the story is shifting away from frontier potential toward bankable projects already under development.

Policy Reform Is De-Risking Investment

Congo’s investment case is being reshaped by the alignment of resource base, regulatory reform and project delivery. Established oil production, expanding LNG capacity and fiscal adjustments are gradually reducing above-ground risk.

Recent reforms led by the Ministry of Hydrocarbons and Société Nationale des Pétroles du Congo have added structure to the sector. The Gas Code, introduced in October 2025, formalizes fiscal terms for gas commercialization, while the Gas Master Plan prioritizes flaring reduction and gas-to-power deployment, targeting 1,500 MW by 2030.

A new upstream licensing round is also under consideration, aimed at attracting fresh capital into both mature and frontier acreage. Together, these measures are improving visibility across upstream, midstream and downstream segments, with recent project activity reinforcing the shift.

The Projects Driving the Next Cycle

Deepwater oil remains central to Congo’s production outlook, with operators progressing both new developments and brownfield optimization. TotalEnergies is advancing work at the Moho licence following the April 2026 Moho G discovery, backed by a $500–$600 million infill drilling program targeting about 40,000 bpd in incremental output.

Local independent Ammat Global Resources is targeting 70% production growth from its Loango and Zatchi fields, where reactivated wells and upgraded platforms have already lifted output by 75%. Perenco continues steady gains, adding roughly 6,000 bpd through its 2025–2026 drilling program.

Trident Energy, after acquiring an 85% working interest in the Nkossa and Nsoko II assets in 2025, is focused on extending field life through subsea optimization and redevelopment work.

While oil continues to anchor revenues, gas is rapidly emerging as Congo’s fastest-growing segment. Eni’s Congo LNG project delivered its first cargo from Phase 2 in February 2026, following the startup of the Nguya FLNG unit in December 2025. Together with Tango FLNG, capacity has risen from 0.6 mtpa to 3 mtpa. Trident Energy has also proposed an FLNG project aimed at adding further capacity across the country’s gas market. The project is expected to operate as shared infrastructure, allowing multiple operators to process gas from their respective fields. This creates an outlet for associated gas that might otherwise be stranded, supporting the country’s broader diversification goals.

Local Content Is Reshaping Investment Terms

Beyond upstream policy, Minister Onanga has positioned local content as a central pillar of Congo’s investment framework, and a key determinant of how capital is structured and deployed.

Decrees 2019-342, 343, 344 and 345 set requirements around subcontracting, workforce localization and training commitments, with the effect being a gradual shift in how projects are structured and how partnerships are formed. Operators are increasingly assessed not only on technical delivery but on in-country value creation, including partnerships with local firms and skills development. Logistics, maintenance and other service areas are increasingly channeled through domestic providers.

At CEIF 2027 – taking place June 1–3 in Brazzaville – attention will shift to what is moving forward and to the investors positioned to take part in that pipeline. Congo’s energy sector is no longer defined by potential alone: projects are moving, capital is being committed and policy is starting to catch up with activity on the ground.

As the Republic of Congo moves from reserves to revenue, the signal to investors is clear: this is already unfolding, not a future opportunity.

Distributed by APO Group on behalf of Energy Capital & Power.

 

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Afreximbank secures double honours at the 2026 International Association of Business Communicators (IABC) Gold Quill Awards for excellence in strategic communications

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Afreximbank

The Award of Excellence for IATF2025 recognises the successful communications and stakeholder engagement programme delivered around the fourth edition of the Intra-African Trade Fair, Africa’s premier trade and investment event

CAIRO, Egypt, June 23, 2026/APO Group/ –African Export-Import Bank (Afreximbank) (www.Afreximbank.com) has been recognised with two prestigious honours at the 2026 International Association of Business Communicators (IABC) Gold Quill Awards, one of the world’s most prestigious awards programmes for strategic communications.

 

The Bank received an Award of Excellence in Special and Experiential Events category for the Intra-African Trade Fair 2025 (IATF2025) held in Algiers, Algeria and an Award of Merit in the Social Media category for its Afreximbank Social Media Campaigns, reaffirming Afreximbank’s commitment to delivering impactful communications that advance its mandate of promoting trade, investment and industrialisation across Africa and the Caribbean.

We are delighted to receive these two awards, which attest to the expertise, creativity and efficiency of Afreximbank’s communication

The Award of Excellence for IATF2025 recognises the successful communications and stakeholder engagement programme delivered around the fourth edition of the Intra-African Trade Fair, Africa’s premier trade and investment event. IATF2025 brought together governments, businesses, investors, buyers, sellers and entrepreneurs from across Africa and beyond, creating a platform for trade and investment opportunities while advancing the objectives of the African Continental Free Trade Area (AfCFTA). The communications campaign played a pivotal role in driving global awareness, stakeholder participation, media visibility and engagement before, during and after the event, while showcasing the scale, ambition and dynamism of African enterprise and reinforcing a positive narrative about Africa’s capacity to trade, industrialise and compete on the global stage. Over 120,000 delegates attended IATF2025 in person and virtually, with deals worth over US$50 billion recorded.

The Award of Merit for Afreximbank Social Media Campaigns recognises the Bank’s strategic use of digital platforms to engage stakeholders, amplify its developmental impact and elevate conversations around trade, industrialisation, economic integration and investment opportunities across Africa and the Caribbean. Through a combination of compelling storytelling, thought leadership content, executive advocacy, multimedia production and real-time event coverage, Afreximbank’s social media platforms have continued to expand their reach and influence among policymakers, businesses, investors, development partners and the wider public. Among these platforms is the Afreximbank TV, a digital TV channel that is wholly owned and managed by Afreximbank, whose fifth edition was celebrated with dedicated coverage of IATF2025, providing live coverage of the activities to both pan African and global audiences.

Anne Ezeh, Director & Global Head, Communications and Events at Afreximbank commented: “We are delighted to receive these two awards, which attest to the expertise, creativity and efficiency of Afreximbank’s communications. As a pan African multilateral financial institution, we see storytelling as a powerful tool for advancing our mission — ensuring our initiatives, events, programmes and key announcements not only inform, but also inspire confidence, deepen engagement and amplify Africa’s transformation. These awards reinforce our resolve to continue delivering world-class communications that elevate African voices and projects a bold and authoritative narrative of the continent.”

Ms. Ezeh added that through innovative storytelling, digital engagement and integrated campaigns, the Bank will continue to amplify the impact of its programmes and partnerships  to project a more authentic narrative of Africa, one defined by opportunity, innovation, resilience and growing influence in the global economy.

For more than five decades, the IABC Gold Quill Awards have recognised excellence in strategic communications globally, celebrating programmes and campaigns that demonstrate measurable impact, innovation, creativity and outstanding execution. Widely regarded as the pinnacle of achievement in the communications profession, the awards are judged through a rigorous and independent evaluation process conducted by experienced communication leaders from around the world.

Distributed by APO Group on behalf of Afreximbank.

 

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Islamic Development Bank (IsDB) Institute Unveils 2025 Annual Report During Group Annual Meetings in Baku

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IsDBI

In 2025, IsDBI significantly expanded its footprint in Islamic finance transformation, approving 25 new technical assistance projects valued at US$4.14 million and completing 19 projects worth US$3 million

The Islamic Development Bank Institute (IsDBI) (https://IsDBInstitute.org) has released its 2025 Annual Report during the 2026 IsDB Group Annual Meetings held in Baku, Azerbaijan, showcasing a year of expanded impact in Islamic finance transformation, innovative solutions, and capacity development.

 

The report highlights how IsDBI strengthened its role as a global knowledge leader by advancing innovative solutions and scaling support to Member Countries through knowledge-based interventions, Islamic finance grants, and strategic partnerships.

In 2025, IsDBI significantly expanded its footprint in Islamic finance transformation, approving 25 new technical assistance projects valued at US$4.14 million and completing 19 projects worth US$3 million, supporting countries in strengthening regulatory frameworks and promoting inclusive financial systems.

Since 2013, the Institute’s interventions in this regard have reached over US$27.57 million across 181 projects benefiting more than 34 countries, underlining its sustained contribution to development outcomes across the Islamic world.

I am pleased to note that the Institute has continued to strengthen its unique role in the global development ecosystem

The Annual Report highlights major progress in IsDBI’s three flagship transformative projects, namely Awqāf Free Zones, Digital Postal Islamic Financial Services, and Smart Countertrade System, which have all advanced to pilot-ready stages. These initiatives aim to address global challenges such as financial inclusion, food and energy security, and trade resilience.

Furthermore, the Institute accelerated its focus on digital innovation in Islamic finance, enhancing its Islamic Finance Artificial Intelligence Assistant (IFAA) and hosting its first AI Hackathon on Islamic Finance, engaging more than 40 teams in developing cutting-edge solutions aligned with industry standards.

Human capital development in Islamic finance also remained a cornerstone of IsDBI’s work in 2025, with the delivery of over 20 training programs reaching around 500 professionals across Member Countries. A key achievement in this area was the Entrepreneurial Mindset Development Program, a flagship initiative equipping emerging leaders from 20 countries with innovation-driven and values-based entrepreneurship skills. The program was designed and implemented in collaboration with Prince Mohammed Bin Salman College of Business and Entrepreneurship, Saudi Arabia.

The Institute also strengthened its thought leadership through flagship publications, global partnerships, and digital engagement, reinforcing its position as a leading voice in Islamic economics and finance.

Commenting on the issuance of the Annual Report, Dr. Sami Al-Suwailem, Acting Director General of IsDBI, said: “I am pleased to note that the Institute has continued to strengthen its unique role in the global development ecosystem by bridging knowledge creation, building human capital, and designing innovative solutions to address economic challenges.”

The 2025 Annual Report is accessible on IsDBI website here (https://isdbinstitute.org/product/isdbi-annual-report-2025/).

Distributed by APO Group on behalf of Islamic Development Bank Institute (IsDBI).

 

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