Tanzania to float US$ 1bn Eurobond for funding infrastructure

Bagamoyo-port
The planned Bagamoyo port project in Tanzania

The Government of Tanzania is planning to float a US$ 1bn Eurobond for the fiscal year 2015/2016. The funds from the bond will be used to fund mega infrastructure projects in the country.

The Government, through the Finance and Economic Affairs Minister, Ms Saada Mkuyu Salum indicated that all process that will lead to the successful floating of the Eurobond will be expedited.  This is so as the government is fully prepared by March next year.

The government hopes to achieve an improved economy though better infrastructure in the country. This is due to the impact poor infrastructure has on the economy by virtue of increased rate of doing business in a country. It negatively affects investor confidence, which in turn leads to low investor interest in development projects.

Key projects that will be funded by the Eurobond will be outlined in the next budget.

In the East African Community, Tanzania will join Rwanda and Kenya, who successfully issued a US$400m and US$2bn Eurobonds respectively last year. Uganda, on the other hand, had made plans to issue the bond but later on shelved the idea. The country opted for loans from the Chinese Government which had lower interest rates compared to those incurred by the bond. Ethiopia has also announced a $1bn bond late last year to fund its infrastructure projects, among them the Grand Renaissance Dam.

Successful issuance of the Eurobond by Tanzania will place the nation a step further in their quest to becoming the economic hub in East Africa. Some of the projects initiated by Tanzania includes the upcoming Bagamoyo port construction, which is expected to kick off July this year.

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