Ethiopia announces plans to issue Eurobond (VIDEO)

Investors in the Emerging markets have exhibited an unquenchable appetite for the Bonds Market, after the success of Kenya’s debut Eurobond, other economies like Tanzania and Ethiopia have announced plans for their respective bonds, Ayalenesh Tafese from Rand Merchant Bank joins CNBC Africa to discuss Ethiopia’s Eurobond plans and prospects for investors and the country.
It was early last month the Ethiopian prime minister told Reuters its country plans a debut Eurobond once it has secured a credit rating but will not open its “cash cow” telecoms firm or state banks to foreigners while their revenues are needed to fund new infrastructure.

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Hailemariam Desalegn’s comments in a Reuters interview on Thursday mean two of the sectors most attractive to foreign investors will be off limits for years, disappointing firms that are eager to tap one of Africa’s fastest growing economies.
It also underlines that Hailemariam, who is a little more than a year into office, has no plan to shift from the state-led policies of his revered predecessor Meles Zenawi, who died last year, even as economists say private business is being squeezed.

But a Eurobond issue would give investors, who have snapped up Sub-Saharan sovereign bonds, another route into Africa’s second most populous nation, which is keen to shift its largely agrarian economy towards textiles and other manufacturing.

“One company is working on the rating process that will take some time,” Hailemariam told Reuters in Addis Ababa, when asked if Ethiopia would follow other African nations with a bond sale.

Without giving a timeline, the prime minister said securing a rating would help it progress towards an issue, adding that the plans involved “not only a Eurobond but other bonds as well”.

That the Horn of Africa country can contemplate such a move shows the changes that have occurred in the past two decades.
Read More on Reuters

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