Investors Update: Zambia seals $6.3bn debt restructuring deal

Zambia seals $6.3bn debt restructuring agreement

Highlights

• Bonds of developing nations in debt distress gained on Friday in a broad relief rally sparked by Zambia’s precedent-setting deal with bilateral creditors.
• The southern African country reached an agreement in principle to restructure $6.3 billion of debt, potentially unlocking funding from the International Monetary Fund and setting the stage for a renegotiation of its Eurobonds as well.
• The deal calls for Zambia’s debt to be rescheduled over more than 20 years with a three-year grace period during which only payments on interest are due. China is the largest official creditor to Zambia.

Source: Bloomberg

Our Takeaway

Zambia in 2020 became the first African country to default on its sovereign debt during the COVID-19 crisis and struggled since then in protracted discussions to agree on a deal. That made the country a test case for a debt restructuring framework backed by the Group of 20 wealthy nations intended to streamline relief for countries caught in a developing world debt crisis sparked in part by the pandemic. Its international bonds broadly traded flat on Friday but have rallied in recent months, with the 2024 issue hitting a nine-month high in early trade. 

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Flutterwave partners with Microsoft to serve foreign clients

Highlights

• Flutterwave has entered into a five-year technological agreement with US technology giant Microsoft. 
• The partnership will see the fintech company build a new generation of payment services on Microsoft Azure, powering payments infrastructure across the African continent and beyond.
• The African payment firm intends to service multinational firms, including Uber, Netflix, and Microsoft, solidifying Azure’s role in facilitating a seamless, reliable, and secure payment experience.

Source: TechCabal

Our Takeaway

Flutterwave, valued at more than $3 billion, is one of the most funded startups operating in Africa with $475 million raised in six years. In addition to being the continent’s largest startup, it is perhaps the biggest within the online payments space. Currently, Flutterwave has an infrastructure reach across 34 countries on the continent with over 900,000 businesses globally using its solution to process payments in 150 currencies and across different payment modes. Adding international firms to its clientele only strengthens Flutterwave’s position in the African tech ecosystem while promoting Africa as a hub for innovation and entrepreneurship

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Tuma raises the largest round for a Congolese fintech startup

Highlights

• Tuma, a fintech startup in the Democratic Republic of Congo (DRC), has raised $500,000 in funding—the largest investment round for a Congolese fintech ever. 
• Founded by Elijah Lubala and Mpilo Makae, Tuma provides a digital solution that allows merchants to receive card payments on their phones. 
• The round saw participation from Visa, Visible Hands, and the Social Justice Fund and will allow the startup to expand into other markets and improve its product offerings.

Source: Fintechpad

Our Takeaway

In 2022, the Congolese startup ecosystem raised $38 million in funding, per Partech data, making it the 11th most funded African country. Much of this has gone into the fintech industry, as the country’s financial system remains incapable of solving its problems. The bank penetration rate hovers around 6% and only 25% of the population has an account with a financial institution. Yet almost half of the population has a mobile phone. Using software POS technology, Tuma transforms any phone into a POS by allowing customers to tap their cards on the back of the phone.