Money Markets

Eurobond offer still on course, says Treasury

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National Treasury Cabinet secretary Henry Rotich. Photo/FILE

National Treasury Cabinet secretary Henry Rotich. Photo/FILE  Nation Media Group

By Reuters

Posted  Friday, September 27   2013 at  10:29
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Kenya does not see a significant impact on its economic growth from the attack by Islamist militants on a shopping mall, and it plans to go ahead with a debut Eurobond issue this financial year, the National Treasury said on Friday.

The Treasury Cabinet secretary Henry Rotich said in a statement that the country's economic growth objective for 2013 remained at 5.5 to 6 per cent, adding that tourism was stable and it would not suffer "long lasting effects" from the attack.

His assessment was at odds with the views of some analysts who predicted that while the weekend attack that killed at least 72 people would not hurt long-term investment, growth and fiscal revenues, especially from tourism, would be hit.

"We do not see any significant effect on the overall economic performance arising from the recent tragedy, and our growth objective for 2013 remains unchanged at around 5.5-6 per cent," Mr Rotich said.

Citing "buoyant" investor confidence, the Treasury secretary said "our plan to issue a debut Sovereign Bond in the international market during this financial year remains on course".

Kenya's financial year ends in June.

Officials had said Kenya would sell the bond, worth up to $2 billion, before the end of this calendar year. But even before the attack claimed by Somali Islamist militant group Al Shabaab, bankers had expected the issue to slip to early 2014.

They argued that as Kenya was a first-time borrower, the process would take longer than for more experienced issuers.

Plans for the country to sell an international bond have been delayed several times in the past since 2007, mainly due to political turmoil at home and financial crises abroad.