Kenya seeks proposals for issuance of $2.5bn Eurobond - source
WEDNESDAY JANUARY 23 2019
National Treasury of Kenya. PHOTO FILE | NATION
By AFP
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Kenya is talking to lenders about a plan to issue a $2.5 billion Eurobond denominated either in euros or dollars, a banking source said on Wednesday.
In the government’s 2018/19 (July-June) budget approved by Parliament in September, Treasury Secretary Henry Rotich set a net external financing target of Ksh287 billion ($2.83 billion) to partly cover the deficit.
“They want to assess whether it would be cheaper to borrow in euros or dollars. A number of banks submitted their interest last week, their technical capabilities,” the source told Reuters.
There has been an increase in government borrowing since President Uhuru Kenyatta came to power in 2013 - a rise that has angered some opposition politicians who say it is saddling future generations with debt.
Kenya seeks proposals for issuance of $2.5bn Eurobond
Magufuli says Tanzania will continue borrowing despite high debt concerns
THURSDAY, MARCH 29, 2018 12:06
Tanzania's President John Magufuli. FILE PHOTO | NMG
Tanzania will keep borrowing to finance its mega infrastructure projects, President John Magufuli has declared, dismissing arguments that the national debt would soon be unmanageable.
“Tanzania still has room for further borrowing…What matters are the projects into which we invest the borrowed money,” Dr Magufuli said.
He was responding to some issues raised by the Controller and Auditor General (CAG) Prof Mussa Assad who cautioned that the skyrocketing national debt would soon be out of hand.
Presenting the audit report for the 2016/17 financial year, Prof Assad said the liability – which stood at TSh41 trillion (KSh1.8 trillion) during the 2015/16 financial year - rose to TSh46 trillion (KSh2 trillion) as of 2016/17 financial year.
This, he said, was raising doubts that the debt was increasing speedily and that if left unchecked, it would see Tanzania plunging into a debt stress.
But in a rejoinder, the head of state said Tanzania’s debt, measured by all sustainability factors, remained very sustainable and that the country still had room for further borrowing.
“I know of countries which have debts of more than three times of our gross domestic product (GDP),” he said, insisting that the most important thing is the management of the borrowed money and specific projects into which the money is injected.
Prof Delfin Rwegasira of the University of Dar es Salaam shared President Magufuli’s sentiments, insisting that the national debt was still sustainable.
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Debt sustainability
He said the sustainability of the national debt was being analysed by the International Monetary Fund (IMF) in close cooperation with the Bank of Tanzania (BoT) and the ministry of Finance and Planning through the Debt Sustainability Analysis (DSA).
“As far as I know the latest figures that we have from the IMF are that Tanzania’s debt is very sustainable and the President was right,” Prof Rwegasira told The Citizen by phone. Some of the factors being used in the DSA include the debt as a percentage of the country’s GDP and the country’s ability to repay the loan.
The IMF is expected to conduct another DSA for Tanzania this year, but a similar exercise, conducted in 2016, showed that Tanzania’s risk of debt distress was low compared to benchmark level of 56 per cent of GDP.
The Finance and Planning minister, Dr Phillip Mpango said last November that Tanzania’s debt was barely 31.2 per cent of the country’s GDP as of July 2017.
Speaking on Wednesday President Magufuli said since the borrowed money was being invested in construction of mega infrastructure projects like standard gauge railway line and electricity generation like the Stiegler’s Gorge, it would only result into boosting the country’s ability to repay.
“In fact, some lenders are now offering even better terms….They have started coming back after realising that we are serious about implementing the projects with our own funds,” said Dr Magufuli.
He said the country already had enough funds for the Standard Gauge Railway line and the Stiegler’s Gorge projects and that the loans being entered into will only boost the available resources.
https://www.businessdailyafrica.com...bt-concerns/4003154-4362948-qo3yng/index.html
