Kenya Delays Bond Sale Because of Fragile Global Economy, Official Says

Kenya is holding back on plans to sell at least $500 million of sovereign bond because recovery in the global economy is still too tentative, Economic Secretary in the Finance Ministry Geoffrey Mwau said.

“As long as the environment is still uncertain we will wait,” Mwau said in an interview in Kenya’s capital, Nairobi, today, citing “fragilities” in Greece, Spain and the U.S. “Risks are still out there. We are continuously monitoring.”

East Africa’s largest economy postponed a sovereign bond sale planned for two years ago after the global financial crisis reduced investors’ appetite for risk.

The country’s main motivation for selling bonds in the international market is to show that Kenya is a good place to invest, Mwau said.

“The goal isn’t to raise funds,” he said. “We are trying to set a benchmark internationally so private operators can then go and raise funds.”

Kenya’s economy is expected to grow by at least 4.5 percent this year, and 5.7 percent in 2011, Mwau told a meeting on monetary policy today in Nairobi.

To contact the reporter on this story: Sarah McGregor in Nairobi at smcgregor5@bloomberg.net

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