Tanzania is one step closer to issue its much-awaited Eurobond to finance infrastructure projects, particularly roads and railway networks, as the government will soon sign agreement with rating agencies for its credit-worth evaluation.
The Minister for Finance and Economic Affairs for Tanzania, Ms. Saada Mkuya Salum indicated in her recent speech to the national assembly about the estimates of government revenues and expenditure for the fiscal year 2015/16 that “Discussions between the Government and Moody and Fitch Rating Agencies that will conduct rating to determine credit-worth of Tanzania to borrow from International Financial Market has been finalized. It is our expectation that the contract between Government and Raters will be signed before July, 2015.”
The government of Tanzania aims to borrow TZS 1.37 trillion from external non-concessional sources through the issuance of a Eurobond and other modalities including tapping into syndicated loans and export credit agencies.
According to Tanzania’s 2015/16 budget the country’s expenditure is estimated to be 20.7 % of GDP.
The Eurobond process in Tanzania was originally launched in 2008, but was postponed due to the global financial crisis and launched again in 2012 with the intention of issuing the Eurobond during the 2012/13 financial year.