mwanakijiji
11-06-2008, 08:03 PM
-- Tanzania is re-evaluating plans to sell bonds on the international market next year to assess whether cheaper options are available, a Finance Ministry official said.
The global financial crisis has pushed up borrowing costs on international capital markets, Gray Mgonja, permanent secretary in the ministry, said in an interview today in the northern city of Arusha.
``The market seemed to be promising, but now with the world financial crisis the bond market is changing,'' Mgonja said. ``We don't want to borrow at interest rates that are debilitating for us.''
Tanzania said in August it will seek a sovereign debt rating before issuing an international bond next year to finance the construction of roads and railways. The country planned to more than $500 million of Eurobonds next year, Reuters reported on Oct. 9, citing Mugisha Kamugisha, commissioner for policy analysis in the Finance Ministry.
Mgonja said today a less risky option may be to borrow from the domestic market, such as raising millions of dollars through syndicated loans from financial institutions. Tanzania is still seeking a financial adviser to help the country obtain a sovereign rating, which may be ready by ``January or February,'' he said.
Antoinette Sayeh, director of the International Monetary Fund's Africa department, said the current environment made it riskier for governments to borrow large amounts of money on global capital markets to fund expensive projects.
``Current market conditions are not conducive to a dramatic expansion of public investment programs funded on commercial terms,'' Sayeh said in an interview today at a financial conference today in Arusha.
``Any planned access to international capital markets should be postponed to avoid prohibitive costs,'' Sayeh, Liberia's former finance minister, said.
My Take:
Is this a good idea?
The global financial crisis has pushed up borrowing costs on international capital markets, Gray Mgonja, permanent secretary in the ministry, said in an interview today in the northern city of Arusha.
``The market seemed to be promising, but now with the world financial crisis the bond market is changing,'' Mgonja said. ``We don't want to borrow at interest rates that are debilitating for us.''
Tanzania said in August it will seek a sovereign debt rating before issuing an international bond next year to finance the construction of roads and railways. The country planned to more than $500 million of Eurobonds next year, Reuters reported on Oct. 9, citing Mugisha Kamugisha, commissioner for policy analysis in the Finance Ministry.
Mgonja said today a less risky option may be to borrow from the domestic market, such as raising millions of dollars through syndicated loans from financial institutions. Tanzania is still seeking a financial adviser to help the country obtain a sovereign rating, which may be ready by ``January or February,'' he said.
Antoinette Sayeh, director of the International Monetary Fund's Africa department, said the current environment made it riskier for governments to borrow large amounts of money on global capital markets to fund expensive projects.
``Current market conditions are not conducive to a dramatic expansion of public investment programs funded on commercial terms,'' Sayeh said in an interview today at a financial conference today in Arusha.
``Any planned access to international capital markets should be postponed to avoid prohibitive costs,'' Sayeh, Liberia's former finance minister, said.
My Take:
Is this a good idea?