LUSAKA, May 26 (Reuters) &#8211; Zambian President Edgar Lungu on Wednesday banned campaign rallies ahead of elections scheduled for Aug. 12, saying large gatherings risked spreading the COVID-19 virus.
Lungu, a lawyer, is pitted against economist Hakainde Hichilema of the United Party for National Development (UPND), whom he narrowly beat in the 2016 elections.
Zambia, Africa&#8217;s no.2 copper producer, is the grips of an economic crisis after it failed to make payment of a coupon on one of its dollar bonds in November, dragging it into sovereign default.
Opposition parties have pilloried Lungu&#8217;s handling of the crisis. Last year, police shot dead two people after the main opposition party leader was summoned for police questioning over a decade-and-a-half old fraud allegation.
Speaking at the launch of his own campaign in the capital Lusaka, clad in dark green jumper and cap representing the ruling Patriotic Front (PF) colours, Lungu told the hundreds of party supporters gathered that he would not hold public rallies, and expected opposition parties to do the same.
&#8220;Therefore, in my capacity as Head of State and the government, I hereby direct the police service and the ministry of health to ensure enforcement of the COVID-19 pandemic health regulations and guidelines without fear or favour,&#8221; Lungu said.
&#8220;What will it benefit you to be holding rallies, but then sacrifice the lives of our citizens and voters to COVID-19 and death?&#8221; Lungu said.
Zambia&#8217;s COVID-19 positivity rate, which was around 1% for most of May, rose to almost 3% on Tuesday. Active cases increased to over 900, from around 400 at the start of the month, according to the health minsitry.
The southern African nation has recorded more than 93,000 confirmed cases of COVID-19, with more than 1,200 deaths.
Opposition leader Hichilema&#8217;s spokesman, Anthony Bwalya, told Reuters the party would go ahead with its campaign rallies, saying COVID-19 cases had subsided.
&#8220;President Lungu is being hypocritical, because the gathering outside the conference centre where he launched his campaign was more like a rally,&#8221; Bwalya said.
Zambians will be voting in presidential, parliamentary and local government election. There are 16 presidential candidates, with Lungu and Hichilema the main contenders. (Reporting by Chris Mfula; Editing by Mfuneko Toyana and Angus MacSwan)
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Zambian president bans campaign rallies to stem COVID-19 spread

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There&#8217;s no doubt that the face of shopping has gradually changed over the years. Shopping online has become more and more attractive during the Covid-19 pandemic. Ecommerce platform, Orderin sees many more opportunities in this space, they also see township businesses as a significant contributor to that growth. OderIn CEO, Dinesh Patel joins CNBC Africa for more.

Ecommerce platform Orderin sees growth opportunities in SA’s township economy

By Kim Harrisberg
JOHANNESBURG, May 26 (Thomson Reuters Foundation) &#8211; From brick kilns to carpet factories, COVID-19 has pushed children as young as eight years old into dangerous and abusive jobs, rights groups said on Wednesday, urging governments to roll out cash allowances to reduce child labour.
Human Rights Watch and advocacy organisations in Ghana, Nepal and Uganda interviewed 81 children working in often risky settings, including gold mines, fisheries and construction sites, during the coronavirus pandemic.
&#8220;The most shocking finding for me was the exploitation &#8230; some children were paid in alcohol at stone quarries,&#8221; said Angella Nabwowe Kasule, programmes director for the Ugandan charity Initiative for Social and Economic Rights, which was involved in the study.
&#8220;Due to extreme hunger, some ate the residue of the local brew for survival, they needed to put something in the stomach,&#8221; Kasule told the Thomson Reuters Foundation in emailed comments.
The number of child labourers worldwide has dropped significantly to 152 million children from 246 million in 2000, but the United Nations (U.N.) fears job losses and school closures caused by the coronavirus will reverse these gains.
Ghana, Nepal and Uganda have all made progress in reducing child labour in recent years and are working to eradicate it by 2025 to meet the U.N.&#8217;s global development goals.
But in Ghana and Uganda, children shared stories with researchers of breathing in noxious dust at mines, carrying loaded bags of ore, using toxic mercury to extract the gold from the ore and being injured by flying rocks.
In Nepal, children reported working 14 hours a day in carpet factories. In all three countries, more than a third of interviewees worked at least 10 hours a day and more than a quarter said employers sometimes withheld wages.
Human Rights Watch said that cash transfers have historically proven effective in reducing child labour in poor families, but some 1.3 billion children globally, mainly in Africa and Asia, do not have access to such support.
&#8220;For many families with children, government assistance in response to the pandemic has been far too little to protect their children from dangerous and exploitative work,&#8221; said Jo Becker, the group&#8217;s children&#8217;s rights advocacy director.
&#8220;Governments and donors should scale up cash allowances to families to keep children out of exploitative and dangerous child labour.&#8221;
Kasule added that providing free school meals to all students in Uganda could also prevent children dropping out of school and turning to dangerous employment.
Solomon Kusi Ampofo, programme coordinator at the Ghanaian charity Friends of the Nation, also involved in the research, said despite the findings of the study he was hopeful because &#8220;awareness around child labour is growing&#8221;.
&#8220;(The research findings are) a lesson for us to really address the socio-economic issues in our country and improve access to healthcare, education and economic relief,&#8221; he said.
(Reporting by Kim Harrisberg; Editing by Katy Migiro. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers the lives of people around the world who struggle to live freely or fairly. Visit http://news.trust.org)
(c) Copyright Thomson Reuters 2021. Click For Restrictions &#8211; https://agency.reuters.com/en/copyright.html
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Governments urged to boost cash grants to end pandemic-fuelled child labour

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="546" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/05/47144916191_c570c7104f_b-820x546.jpg" alt="" class="wp-image-404903" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/05/47144916191_c570c7104f_b-820x546.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2021/05/47144916191_c570c7104f_b-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/05/47144916191_c570c7104f_b-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2021/05/47144916191_c570c7104f_b.jpg 1024w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption>Minister Lindiwe Sisulu Photo: via Flickr</figcaption></figure>



CAPE TOWN, May 25 (Reuters) – South Africa’s Trans-Caledon Tunnel Authority (TCTA) has raised just over 15 billion rand ($1.09 billion) in capital markets to continue construction of the Lesotho Highlands water project, the minister of water and sanitation said on Tuesday.



The state-owned TCTA needed guarantees from the National Treasury before it could raise the private funding for the project which is designed to improve water access for millions of people in South Africa’s economic heartland in Gauteng province.



“So, we have the resources, we have the guarantees and now we can assure you that we will be hard at work to provide water security,” minister Lindiwe Sisulu told lawmakers.



In March the TCTA said delays by the treasury, which were due to tightening conditions for support for state-owned entities, were putting pressure on the TCTA as it looked to raise 33 billion rand in 2021.



Years of hot weather in water-scarce South Africa, coupled with a lack of investment and inadequate maintenance of infrastructure has led to increasing dependence on the tiny mountain kingdom of Lesotho to augment water supplies to Africa’s most industrialised country.



The $1 billion raised with allow for the completion of phase 2 of the Lesotho Highlands water project, which involves the construction of a series of dams, Sisulu said.



She added that the TCTA has projects worth 68 billion rand designed to increase water delivery across the country’s major cities.



($1 = 13.8226 rand) 



(Reporting by Wendell Roelf; editing by Mfuneko Toyana and Jason Neely)

Minister Lindiwe Sisulu

South Africa’s TCTA raises $1 bln for Lesotho water project

<a href="https://www.cnbc.com/quotes/MRNA" target="_blank" rel="noreferrer noopener">Moderna</a>&nbsp;said Tuesday its Covid-19 vaccine was 100% effective in a study of adolescents ages 12 to 17, making it the second shot behind&nbsp;<a href="https://www.cnbc.com/quotes/PFE" target="_blank" rel="noreferrer noopener">Pfizer</a>’s to demonstrate high efficacy in younger age groups.



The company said it plans to ask the Food and Drug Administration to expand the emergency use of its Covid vaccine for teens early next month. If approved, it would likely dramatically expand the number of shots available to middle and high school students ahead of the next school year. Pfizer and German partner&nbsp;<a href="https://www.cnbc.com/quotes/22UA-DE" target="_blank" rel="noreferrer noopener">BioNTech</a>&nbsp;<a href="https://www.cnbc.com/2021/05/10/pfizer-covid-vaccine-fda-clears-use-in-kids-ages-12-to-15.html">were cleared</a>&nbsp;to use their vaccine for 12- to 15-year-olds earlier this month.



“We are encouraged that mRNA-1273 was highly effective at preventing COVID-19 in adolescents,” Moderna CEO Stephane Bancel said in a press release. “We remain committed to doing our part to help end the COVID-19 pandemic.”



The two-dose vaccine, which is given four weeks apart, is already authorized for adults.



The phase 2/3 study the company is citing Tuesday included more than 3,700 adolescents. No cases of Covid were observed in participants who received two doses of the vaccine, while four cases were observed in the placebo group, according to the company.



No significant safety concerns have been identified, and side effects generally are consistent with those seen in an earlier trial of adults, the company said. The most common side effects after the second dose were headache, fatigue, muscle pain and chills, Moderna said.



<a href="https://www.cnbc.com/2021/05/06/covid-moderna-mrna-earnings-q1-2021.html">The new data comes less than three weeks after</a>&nbsp;the company disclosed in an earnings report that early data showed the shot was 96% effective at protecting against Covid in teens ages 12 to 17. That data was based on those who received at least one dose of the vaccine.



The company said Tuesday the shot was shown in the trial to be 93% effective after one dose. Because children are less likely to get seriously ill, Moderna used the Centers for Disease Control and Prevention’s definition of Covid-19 to calculate that figure. It requires only one symptom and a positive Covid test.



U.S. regulators are expected to grant Moderna’s request for use in teens. The approval process could take about a month, just in time for some summer activities and fall classes if Moderna submits the data by early June. Pfizer and BioNTech requested expanded use of their shot in adolescents on April 9, for example, and were authorized by the FDA on May 10.



Vaccinating children is seen as crucial to ending&nbsp;the pandemic. The nation is unlikely to achieve herd immunity — when enough people in a given community have antibodies against a specific disease — until children can get vaccinated, health officials and experts say.



Children make up around 20% of the total U.S. population, according to government data. Some 70% to 85% of the U.S. population needs to be vaccinated against Covid to achieve herd immunity, medical experts say, and some adults may refuse to get the shots. Though more experts now say herd immunity is looking increasingly unlikely as variants spread.



Vaccinating kids may also hasten the return of in-person learning and greenlight after-school extracurricular activities such as sports, art and other in-person activities, health experts say.

106882526-1620910846471-gettyimages-1232851817-covid_vaccine_clinic_milford_pa_5-12-21_41371

Moderna says its Covid vaccine is 100% effective in teens, plans to seek FDA OK in early June

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="544" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/03/Eskom_results-820x544.jpg" alt="" class="wp-image-399685" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/03/Eskom_results-820x544.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2021/03/Eskom_results-300x199.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/03/Eskom_results-768x510.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2021/03/Eskom_results.jpg 830w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption>Eskom results held at Megawatt Park in Johannesburg on Tuesday, July 30 2019. Pic: Waldo Swiegers / Bloomberg</figcaption></figure>



CAPE TOWN, May 25 (Reuters) – Struggling South African power utility Eskom has cut its debt by almost a fifth, the most among indebted state firms, the country’s public enterprises minister said on Tuesday.



Eskom’s troubles have long cast a shadow over Africa’s most industrialised country, with ratings agencies citing its debt as a key risk to an economy struggling to rebound from recession.



The company embarked on a massive restructuring programme to split into three entities and has moved to improve its operations to lower costs and boost power generation capacity.



“Most notably was the 83 billion rand reduction in debt in the 2021 financial year, from 484 billion rand to 401 billion rand due to the repayment of the maturing debt and changes in the exchange rate,” Pravin Gordhan told lawmakers.



Eskom has net debt of 460 billion to 485 billion rand ($35 billion), its chief executive said in February.



Relying mainly on ageing coal-fired plants to generate electricity, Eskom regularly cuts power to the national grid in a controlled effort to prevent a complete shutdown, as it struggles to generate enough power to keep the lights on. 



($1 = 13.8225 rand) 



(Reporting by Wendell Roelf; Editing by Alexander Smith)

Embattled Power Company Eskom Holdings SOC Ltd. Reports Record Loss

South Africa’s Eskom cuts debt by 20%, Minister says

Mali’s vice president Assimi Goita seizes power

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As we celebrate the Africa Day, the challenge of taking advantage of an open skylines policy is key for the implementation of the Africa Continental Free Trade Area Agreement.

DSneko1

Why the liberalization of African skies is key to the AfCFTA

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Safaricom shareholders paper wealth rose by Sh90.1 billion yesterday as investors rushed to buy the company’s shares after it was awarded a license to enter Ethiopia’s market. It marks one of the largest one-day gains on a single stock in the history of the Nairobi Securities Exchange. Stellah Swakei, Investment analyst at Cytonn joins CNBC Africa for more.

Safaricom shares hit record high on Ethiopian licence

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COVID-19 has had an aggravating effect on food insecurity across the continent. Border closures, lockdowns, and lost jobs have reduced food access. As a result, acute food insecurity in Africa has increased by over 60 per cent in the past year and threatens to widen further. Does technology offer a solution? Dioscore Shikama, Founder of AgriGo spoke to CNBC Africa for more.

AgriGo Founder

AgriGo Founder, Shikama on how Africa can leverage technology to end hunger

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The Rwandan government has graded 31 more hospitality and tourism establishments, bringing the number to 177 since the practice began back in 2017.

Rwanda grades 31 hospitality & tourism establishments

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/05/106887249-1621862722565-gettyimages-1232959942-SPRWANDA-KIGALI-BASKETBALL_AFRICA_LEAGUE-INAUGURAL_SEASON.jpeg" alt="" class="wp-image-404760" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/05/106887249-1621862722565-gettyimages-1232959942-SPRWANDA-KIGALI-BASKETBALL_AFRICA_LEAGUE-INAUGURAL_SEASON.jpeg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/05/106887249-1621862722565-gettyimages-1232959942-SPRWANDA-KIGALI-BASKETBALL_AFRICA_LEAGUE-INAUGURAL_SEASON-300x169.jpeg 300w" sizes="(max-width: 740px) 100vw, 740px" /><figcaption>Benjamin Chukwukelo Uzoh 2nd R of Rivers Hoopers of Nigeria vies with Wilson Nshobozwa of Patriots Rwanda during the opening game of the the inaugural Basketball Africa League BAL in Kigali, capital city of Rwanda, May 16, 2021.
Cyril Ndegeya | Xinhua News Agency | Getty Images</figcaption></figure>



The National Basketball Association has formed its Africa business operation, luring investors and former players including, Dikembe Mutombo, Grant Hill and Junior Bridgeman.



The NBA Africa will oversee the league’s business throughout the continent, including operating Basketball Africa League, which launched on May 16. The entity will establish corporate partnerships, expand&nbsp;<a href="https://www.cnbc.com/2021/05/17/genius-sports-wins-data-partnership-with-nbas-basketball-africa-league.html">content, media rights</a>&nbsp;and build new arenas. The NBA envisions basketball being a top sport throughout Africa in 10 years.



Specific terms of the investment in NBA Africa were not made available, but NBA commissioner Adam Silver said in a press conference Monday that the enterprise value for NBA Africa is worth nearly $1 billion.





Nigeria-based industrial group&nbsp;<a href="https://yinkafolawiyogroup.com/about-us/the-group" target="_blank" rel="noreferrer noopener">Yinka Folawiyo</a>&nbsp;Group and&nbsp;<a href="https://www.heliosinvestment.com/helios-fairfax-partners" target="_blank" rel="noreferrer noopener">Helios Fairfax Partners Corporation</a>, an investment holding company that trades on the&nbsp;<a href="https://www.heliosinvestment.com/uploads/files/HFP-2021-Q1-Press-Release.pdf" target="_blank" rel="noreferrer noopener">Toronto Stock Exchange</a>&nbsp;under the ticker symbol “HFPC,” are investors in NBA Africa. Former NBA players&nbsp; Luol Deng and Joakim Noah are also investors.



Silver and NBA chief operating officer Mark Tatum will have NBA Africa board seats, joining Babatunde Folawiyo (CEO of Yinka Folawiyo) and Tope Lawani (co-CEO of Helios Fairfax). NBA Africa will be led by CEO Victor Williams.



On the call with reporters, Williams said part of NBA Africa’s strategy is to accelerate the “development of basketball’s eco-system” via creating more youth academies that will serve as a pathway for talent and growing the NBA’s brand.



“This growth will come to life by, amongst other things, increasing the NBA’s footprint in Africa and opening additional offices in priority markets across the continent starting in countries like Nigeria, where there is already a strong affinity for the game,” said Williams.



The NBA’s business operation in Africa business is similar to its’ NBA China business, which has grown to over a&nbsp;<a href="https://www.cnbc.com/2020/08/11/trump-order-banning-business-with-wechat-could-affect-nbas-china-deal-with-tencent.html">$5 billion business</a>. It launched in 2008, with a $253 million investment from partners including&nbsp;<a href="https://www.cnbc.com/quotes/DIS" target="_blank" rel="noreferrer noopener">Disney</a>. NBA China allowed the league to gain more access to the country’s top marketplace as China has a population of 1.3 billion.



“There are some structural similarities in that we’ve taken a geographical area and carved it into a distinct entity and added strategic partners because we recognize that was the best opportunity for growth,” said Silver when asked about NBA Africa’s comparison to its China business. “But I think the comparison probably ends there.”



Another significant difference is the NBA is now operating a league in Africa, whereas the Chinese Basketball Association is state-run. But NBA’s business relationship with China remains strained after a 2019 tweet by then Houston Rockets general manager Daryl Morey.



<figure class="wp-block-image is-resized"><img loading="lazy" decoding="async" src="https://image.cnbcfm.com/api/v1/image/106887255-1621862852797-gettyimages-1200836666-02142020_cares_unified_game_haynes_0385.jpeg?v=1621862887&amp;w=678&amp;h=381" alt="Dikembe Mutombo #55 of the Away Team poses for a photo during NBA Cares Special Olympics Unified Game as part of 2020 NBA All-Star Weekend on February 14, 2020 at Wintrust Arena in Chicago, Illinois." width="833" height="468"/><figcaption>Dikembe Mutombo #55 of the Away Team poses for a photo during NBA Cares Special Olympics Unified Game as part of 2020 NBA All-Star Weekend on February 14, 2020 at Wintrust Arena in Chicago, Illinois.Jeff Haynes | National Basketball Association | Getty Images</figcaption></figure>



CCTV, the state-run broadcast network, has yet to air games for the 2020-21 season after briefly returning NBA games during the 2020 NBA Finals. Last year’s Finals featured the Los Angeles Lakers, a popular team in the country. NBA games are available for streaming due to Tencent’s $1.5 billion rights deal. And tensions between the&nbsp;<a href="https://www.cnbc.com/2021/05/13/american-chamber-of-commerce-in-china-unequal-access-for-us-business.html">U.S. and China</a>&nbsp;isn’t making business in the country&nbsp;<a href="https://www.nytimes.com/2021/04/09/business/china-nba-anta-xinjiang.html" target="_blank" rel="noreferrer noopener">any easier to conduct</a>.







Still, the NBA continues to eye more global markets, and Africa is one of the fastest-growing on the planet, with a population of about 1.07 billion (sub-Saharan), according to the&nbsp;<a href="https://www.un.org/en/development/desa/population/publications/pdf/popfacts/PopFacts_2019-6.pdf" target="_blank" rel="noreferrer noopener">United Nations</a>. The NBA opened its African headquarters in Johannesburg in 2010.



Again, a big part of this business will be&nbsp;<a href="https://www.cnbc.com/2020/02/15/sports-money-basketball-africa-league-reveals-teams.html">growing the BAL</a>. The league consists of two conferences, 12 teams, and the top six clubs will compete in a single-game elimination tournament following the season to determine the champion. Amadou Gallo Fall is president of the league.



Speaking to CNBC about the league, NBA team owner Robert Sarver said BAL can be used as a pipeline to grow basketball talent in hopes some players will end up playing in the NBA. And having teams play in selected areas will help with scouting, too. Currently, 55 players from the continent, or with African roots (parents are natives), play in the NBA.



“From a talent perspective, one of the things that’s been a challenge in Africa is the continent is very large, and it’s very spread out,” said Sarver, who owns the Phoenix Suns. “So unlike the United States, where the top young players, regardless of what state you live in, come together and compete against each other a lot, that’s hard to do in Africa.

106887249-1621862722565-gettyimages-1232959942-SPRWANDA-KIGALI-BASKETBALL_AFRICA_LEAGUE-INAUGURAL_SEASON

NBA lures players and investors to form Africa business entity valued at nearly $1 billion

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Telkom has reported a 53.4 per cent jump in headline earnings per share, year-on-year, for the ended March. The company&#8217;s mobile data revenue rose 41 per cent, with the mobile customer base up 27.8 per cent. Telkom says that next-generation revenue contributes more than 65 per cent to group revenue. Telkom CEO, Sipho Maseko joins CNBC Africa for more.

Telkom CEO on full-year earnings

Telkom CEO on full-year earnings, fintech plans & spectrum deadlock

South African maize farmers are expected to harvest 7% more of the staple crop during the 2020/2021 season compared with the previous season, as yields are boosted by favourable weather, a Reuters survey showed on Monday.



South Africa&#8217;s Crop Estimates Committee (CEC) is expected to forecast the 2020/2021 maize crop at 16.413 million tonnes, up from the 15.300 million tonnes harvested last season, the average estimate of five traders and analysts showed.



The forecast is 2% higher than the CEC&#8217;s April forecast of 16.095 million tonnes.



&#8220;Beneficial temperatures and growing conditions over the past few months sustained maturing and filling maize plants,&#8221; said Riddermark Capital Grain Option Market Trader Warren Langridge.



With harvesting already taking place in some parts of the country, analysts are hopeful the 2020/2021 season will see very high yields.



&#8220;Our observations and feedback from farmers on the ground remain encouraging that we could have the second-largest maize crop on record in the 2020/2021 production season,&#8221; said Agricultural Business Chamber chief economist Wandile Sihlobo.



The survey expects the crop to consist of around 9.131 million tonnes of white maize, used mainly for human consumption, and around 7.287 million tonnes of yellow maize, used mainly for animal feed.



The CEC will release its fourth production forecast for 2021 summer crops on May 27.



 (Reporting by Akhona Matshoba. Editing by Tanisha Heiberg and Mark Potter)

Maize-plant-in-field-321580-pixahive

S.Africa’s 2020/2021 maize output seen up 7% on last season

* Colombia&#8217;s downgrade to junk puts focus on others
* COVID has caused record rise in global debt
* Upgrades elsewhere this year bring hope worst is over
By Marc Jones
LONDON, May 24 (Reuters) &#8211; Colombia&#8217;s loss of its S&amp;P Global investment grade status last week has not only raised the usual question of who is next but also whether the number of countries seemingly being spared points to a moving of the ratings goalposts.
Being stripped of one&#8217;s investment grade credit rating &#8211; which can push up borrowing costs &#8211; is chastening for any government, but Colombia is by no means alone.
Over the past decade Brazil, South Africa, Turkey along with more than half a dozen others have become &#8220;fallen angels&#8221;, as a demotion to junk is known in rating agency parlance, and COVID-19 pressures mean plenty more are in danger.
Fitch and Moody&#8217;s both have India and Romania on warnings. Fitch also has Colombia, Panama and Uruguay on its watchlist and although tiny Curacao is the only one left on S&amp;P&#8217;s, 10 more countries are on the precarious BBB-minus last investment step albeit with &#8216;stable&#8217; outlooks.
On the face of it, it doesn&#8217;t look good for many of them. India stands out with an eye-watering 90% debt-to-GDP burden, but all except for Romania now have debt ratios well above the 55% average for a BBB minus-rated country.
Median interest payments are also expected to be considerably higher in emerging markets this year. Fitch reckons this to be equivalent to 2.5% of GDP compared to 1.2% in major economies and if COVID-19 continues, recoveries will be delayed.
However, despite all the gloomy numbers, financial market investors who use credit default swaps (CDS) to insure against debt problems, don&#8217;t seem to think that any of these countries are about to suffer the chop.
A year ago, CDS were pointing to India, Colombia as well as Indonesia and Mexico with its giant $130 billion bond market, all being demoted to &#8220;junk&#8221;. All are now trading at levels suggesting they will retain their investment grades.
&#8220;There is no magic debt-to-GDP number that automatically triggers a downgrade. It just doesn&#8217;t work like that,&#8221; explained Moody&#8217;s Chief Credit Officer for EMEA Colin Ellis.

Being cut to junk can automatically exclude government or corporate bonds from certain high-profile investment indexes and set off a wave of problems by driving up borrowing costs.
In contrast to last year&#8217;s blizzard of cuts when the main firms cut between 25%-30% of the countries they rate, Moody&#8217;s has upgraded roughly three times as many as it has downgraded this year. S&amp;P has made 50% more upgrades when corporates are included too.
&#8220;When it is a something like a short sharp shock, sometimes it is appropriate to look through the noise,&#8221; Ellis added, highlighting how COVID has caused most countries up to six months of acute economic pain compared to the nearly 18 months the 2007-2008 financial crisis lasted.

ALL RISE
The task of deciphering impact from noise can run the risk of inconsistencies.
Colombia, which said last week it would work to maintain market confidence in its finances, should have been feeling hard done by, analysts at Barclays say.
S&amp;P had only reaffirmed its investment grade a month ago and even with its tax plan problems, the government&#8217;s 65% debt-to-GDP ratio will be well below India&#8217;s 90% or the 85% of Croatia which had its BBB- rating reaffirmed on Friday.
The 15-percentage point jump in its debt ratio since COVID has also been smaller than the near 20-percentage point rise Romania has seen, yet S&amp;P has just taken Romania off its downgrade warning.
Italy, whose debt level is on course to top 150% of GDP this year, has had its rating lifted by S&amp;P.
&#8220;There is a broad issue that rating agencies seem to be giving a lot of countries the benefit of the doubt,&#8221; said one of fund manager M&amp;G&#8217;s &#8220;bond vigilantes&#8221;, Eldar Vakhitov, who sees Romania as a prime example.
S&amp;P had put Bucharest on its downgrade warning back in 2019 citing concerns its budget deficit was increasing from 3% to 4.5% of GDP. Yet it didn&#8217;t follow through even when it jumped to 9% of GDP in 2020 and was projected to be 7% this year.
One of S&amp;P&#8217;s top sovereign analysts, Frank Gill, noted that Romania&#8217;s new government has backed off from major pension increases. More generally, with so much uncertainty over how COVID will leave economies, it makes sense to give some benefit of the doubt where possible.
Fitch&#8217;s managing director for global sovereigns and supranationals, Tony Stringer, also pointed out recently https://www.reuters.com/world/europe/fitch-wait-until-next-year-make-final-covid-19-judgments-2021-04-14 that the fact that almost all countries&#8217; debts have risen means that individual countries haven&#8217;t stood out in how bad they look.
Fitch forecasts that global government debt will reach $95 trillion by 2022, a record 40% increase in nominal terms compared with the pre-COVID level of 2019.
&#8220;When you have a crisis that impacts all countries, some of those indicators on the relative scale are all going to move together &#8211; so it creates a bit of a cushioning effect for ratings,&#8221; Stringer said last month.
For other observers though, that acceptance of high debt sits awkwardly. Ratings are specifically designed to judge countries&#8217; ability to repay their debt and history shows the higher the debt, the greater the risk of running into difficulties.
&#8220;It&#8217;s like saying, sorry, officer, you cannot give me a ticket, everyone else was speeding too,&#8221; said S&amp;P&#8217;s former head of sovereign ratings Moritz Kraemer.
(Reporting by Marc Jones; editing by Emelia Sithole-Matarise)
(c) Copyright Thomson Reuters 2021. Click For Restrictions &#8211; https://agency.reuters.com/en/copyright.html
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ANALYSIS-COVID may be shifting ratings goalposts

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A licence to operate telecommunication services in Ethiopia has been awarded to Kenya’s telco giant Safaricom in a consortium made up of Vodafone, Japan’s Sumitomo and UK finance agency CDC Group. One of the people involved in awarding of this licence is the Senior Adviser to the Minister of Finance for Ethiopia, Brook Taye. He spoke to CNBC Africa for more.

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