In quest for joining the international capital market, Ethiopia is going to start issuing international bond by the end of this year. The move is the first of its kind by the nation.
The announcement by the Ethiopian government came following the sovereign credit ratings given to the country by three top international rating agencies back in May. Standard & Poor’s and Fitch both rated Ethiopia’s sovereign treasury bonds as “B” while Moody’s rate was “B1” (B+).
Commenting on this Sufian Ahmed, Minister for Finance and Economic Development, said; “On the basis of the ratings, the government of Ethiopia has decided to issue a 10-year international bond and access international capital market”.
He explained, “The bond sale would serve as a potential means for the government to know the risk premium”. The Minister furthered the move will enable Ethiopian business to access international capital markets by providing a benchmark for risk assessment.
According to Sufian, all the necessary preparations have been made for the issuing of bonds, including selection of world top banks that will issue the bond on behalf of the Ethiopian Government.
He furthered contract will be concluded with these banks very soon and there will be international law firms that will be hired for the purpose of rendering legal advice.
He also commented on the issue of Birr being devaluated saying, “The government has no intention to devaluate birr. There is no economic reason to devaluate birr. Ethiopia’s economy is now stable.”
The fund that will be raised via bond selling in the international capital market will be used for financing infrastructure projects, Sufian explained.
Source: Walta Information Center