VenturesNow

Kenya opts for new Eurobond amidst growing debt burden

Published

2 years ago

April 19, 2023

As part of moves to restore its economy, Kenya is planning to issue a new Eurobond to manage 2024’s maturity of a Ksh270 billion ($2 billion) 10-year bond.

The country’s national treasury revealed that it had opted for another Eurobond in a statement on Monday as the country faces the reality of handling the large maturing loan amid highly ballooned debt-servicing costs in recent years, and highly weakened local currency against the US dollar.

“The government of the Republic of Kenya through its national treasury is considering accessing the international capital markets before the end of the fiscal year 2023/24 (July 1, 2023, to June 30, 2024) to issue a sovereign bond,” the Treasury said in a tender call for lead arrangers to express interest in the new Eurobond plans.

The Treasury will also spend Ksh1.36 trillion ($10.07 billion) to service debt in the current financial year, which is 63 percent of the tax revenue targeted for collection by the Kenya Revenue Authority (KRA) by June.

The latest Eurobond will be the first since President Ruto took office in September last year, having announced his first budget of Ksh3.663 trillion for 2023/24.

Kenya issued the bond on June 24, 2014, with a coupon rate of 6.875 percent annually. That is, however, not the only Eurobond that will fall due during Ruto’s first term.

Another Eurobond of Ksh121.5 billion ($899.7 million) will mature on May 22, 2027. The eight-year bond with a coupon rate of seven percent per annum was issued on May 22, 2019.

The other Eurobonds, totaling Ksh567 billion ($4.2 billion), will mature in February 2028, May 2032, January 2034, and February 2048.

Kenya has insisted that it would not default on its debt repayment obligations despite delayed payment of civil service salaries.

The head of the International Monetary Fund’s Africa Department, Abebe Aemro Selassie recently revealed that Kenya was not expected to seek a restructuring of its debt despite current strains and a looming bond payment.

VenturesNow

IMF, Egypt reach agreement for fourth review of Egypt’s $1.2 billion loan request

Published

13 hours ago

December 26, 2024

Ifeoluwa Dada

Egypt and the International Monetary Fund (IMF) have reached a staff-level agreement over the fourth review of the Extended Fund Facility arrangement, which might lead to a $1.2 billion payout under the program.

In March, Egypt, struggling with rising inflation and cash shortages, consented to the $8 billion, 46-month facility. Its economic problems were made worse by a precipitous drop in Suez Canal revenue over the last year due to regional tensions.

Over the next two years, Egypt’s government has committed to raising its tax-to-revenue ratio by 2% of GDP, according to the IMF, emphasising removing exemptions rather than raising taxes.

According to a statement from the IMF, this would allow it to expand social expenditure to support vulnerable populations.

“While the authorities’ plans to streamline and simplify the tax system are commendable, further reforms will be needed to enhance domestic revenue mobilization efforts,” the statement said.

According to the IMF statement, Egypt had also committed to maintaining its commitment to a flexible currency rate and to taking more urgent action to guarantee that the private sector became the primary driver of development.

The IMF’s executive board still has to accept the fourth review’s staff-level agreement.

VenturesNow

Libya’s eastern govt accepts petrol subsidy elimination

Published

13 hours ago

December 26, 2024

Ifeoluwa Dada

In a recent statement, the eastern government of Libya claimed it had reached a consensus on a plan to eliminate gasoline subsidies and would draft a mechanism to carry out the accord.

Additional information on the idea was not released by the administration led by Osama Hamad, a challenger to the internationally acknowledged Tripoli-based government.

However, it is uncertain if Hamad’s government would be able to carry out the plan in the divided nation.

According to the Global Petrol Prices online tracker, a litre of gasoline costs just 0.150 Libyan dinars ($0.03) in OPEC member Libya, making it the second-cheapest in the world.

Following an uprising against former ruler Muammar Gaddafi in 2011, smuggling networks have thrived in the ensuing political unrest and armed fighting. In 2014, conflicting eastern and western governments separated the nation.

A World Bank analysis estimates that the annual value of fuel smuggling from Libya is at least $5 billion.

In a meeting with Mari Barrasi, the deputy governor of the Central Bank of Libya (CBL), located in Tripoli, and four members of the bank’s board of directors, Hamad in Benghazi supported the idea of removing subsidies.

The CBL’s Benghazi branch offices served as the venue for the conference.

The eastern parliament appointed Hamad in 2023 to succeed Abdulhamid Dbeibah, who had been put in position in 2021 under a U.N.-backed procedure that the parliament said had lost its legitimacy.

Dbeibah, who is located in Tripoli, stated in January that he will conduct a public poll on the topic of eliminating gasoline subsidies, but he hasn’t done anything about it since.

According to CBL figures, gasoline subsidies cost 12.8 billion Libyan dinars between January and November of this year. 4.8 Libyan dinars to $1 is the official exchange rate.