Aiding the Debt Crises In An African Nation From A Bank's Perspective

Essay by satmos May 2006

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Swansea Institute of Higher Education

Swansea Business School

Risks to Investment and Dealing with Debt in an African Nation

Table Of Contents

1.0 Terms of Reference..................................................................... 3

2.0 Introduction............................................................................... 3

3.0 Definitions................................................................................. 3

4.0 Analysis of African Nation............................................................ 5

5.0 Possible Policies To Be Pursued................................................... 7

6.0 Dealing With Debt....................................................................... 9

7.0 Implication of Further Investment................................................... 11

8.0 Conclusion/Recommendations...................................................... 13

9.0 References............................................................................... 14

1.0 Introduction

1.1 The report will evaluate the risk associated with our current investment in this African nation both through sovourenty loans and corporate loans as well and access the risk of further investment in the country. It will also make suggestions of methods that can be used to address the current situation and make recommendations on the proposed investment from our corporate customer.

1.2 This will be done through highlighting the country, political policy and economic policy risk involved in the country. It will also highlight possible economic polices the country could use as well as methods that can be used to deal with the outstanding debt.

2.0 Introduction

2.1 The nation is question is a former British colony with a population of 20 million with population growth at 3% per annum. Tribal tension in the country is high which has led to physical conflict which affects the rich agricultural areas of the country. Information on the nation is hard to obtain.

2.2 The country does have an election process which has been established however the current tribe came to power through military intervention three years ago. Because of Tribal tension there have been changes between tribes throughout its history, weather through the demographic process or intervention process is unknown. However, it is fair to say that the political aspect of the nation is unstable.

2.3 The countries debt now amount to US $7.5 billion...