Logistical Infrastructure need massive funds KENYA'S US$2 BILLION Eurobond was oversubscribed by 500 per cent by the close of offer. The Bond, Africa’s largest sovereign bond so far is likely to lead to a stampede on the Eurobond issues in Africa. It was in many respects a pathfinder for other budding bond issuers. A number of African countries are said to be considering floating Eurobond of their own but waited to see the response on the Kenya bond which was considered ambitious. However, the over subscription is a morale booster that could see other intending issuers up their offer. Kenya herself has indicated that she will be back in the market with another sovereign Bond, next year. This time around she will be targeting the interest-free Islamic bond. To date, the highest African sovereign Bond is the US$750 million Zambian Bond issued in 2011. Initially the bond was meant to raise US$500 million but it was oversubscribed by 238 times at $11.9 billio
Showing posts from June, 2014
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Proposed second Terminal at JKIA, Kenya EAST AFRICAN COUNTRIES are increasingly becoming independent from the economic standpoint. The regional countries read the coordinated budget for the year 2014/15. The budgets amounted to US$40 billion, a whopping 30 per cent of the GDP estimated at US$120 billion. An outstanding feature of the budget is that the region will finance on average, 76.5 per cent of the total budget from domestic sources. This is a major leap compared to 10 years ago when the region financed only about 55 per cent of their US$11 billion budget. Only Kenya, the largest economy in the block could finance her 2004/05 $6.7 billion budget from the domestic sources. Tanzania, whose budget in 2004/05 stood at $2.5billion, could finance only 59 percent of her budget from domestic revenue. Ten years later, Tanzania will finance to 61.4 per cent of a budget that is five times larger. The current budget stands at US$12 billion while domestic revenue will stand at US$7.
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STRONG DOMESTIC DEMAND drove Africa’s GDP growth last year. Sub-Saharan Africa’s GDP, excluding South Africa grew by 6 per cent. However, when the sluggish South Africa economy is included, GDP grew by 4.7 per cent says the World Bank’s Global Economic Prospects. The Bank expects GDP to remain growth rate to hold and 4.7 per cent in 2014 and rise expected 5.1 per cent in 2015. South Africa, Africa’s second largest economy grew by a paltry 1.9 per cent in 2013. This was mainly due to structural bottlenecks, tense labour relations and low consumer and investor confidence. The World Bank stated that GDP growth projections in the region in 2015 and 2016 are expected to be supported by firming external demand and investments in natural resources, infrastructure, and agricultural production. East Africa is expected to drive the strong growth in Sub-Saharan Africa “due to supported by Foreign Direct Investment flows into offshore natural gas resources in Tanzania, and the onse