The Ethiopian government will probably decide whether to issue a second Eurobond to fund infrastructure projects after parliament reconvenes this month, said Finance Ministry spokesman Haji Ibsa.
There’s been no decision about the details of the bond, including how much it would be worth, Haji said by phone on Tuesday.
“It is likely but not yet discussed and approved by the government,” he said. “Parliament will start at the end of September, maybe afterward everything will be clear.”
The state-led economy is increasingly opening up to foreign investment to build roads and railways, driving growth which is forecast by the International Monetary Fund at 8 percent in 2015-16, the second-fastest pace on the continent.
In December, Ethiopia raised $1 billion in its debut sale of Eurobonds, joining African nations from Kenya to Ghana tapping the international capital markets amid appetite for emerging-market assets and record-low borrowing costs. Since then, widening fiscal deficits coupled with a plunge in commodity prices and the prospect of a U.S. interest-rate rise have seen some investors pulling funds from emerging markets.
Ethiopia may return to the sovereign debt market every two or three years, Finance Minister Sufian Ahmed said in December.
The government has hired bankers to organize a “non-deal roadshow” in London this month for “investor relationship building” and there are no plans for another overseas bond sale, State Minister of Finance Ahmed Shide said by phone from Lusaka, Zambia, on Tuesday.
The plan for investor meetings shows the government is serious about issuing sovereign debt to take advantage of lower rates before borrowing costs begin rising, said Zemedeneh Negatu, managing partner at Ernst & Young Ethiopia, by phone.
“I’d suggest the government just go ahead and issue another round as for Ethiopia, at least the market is still positive,” he said in an interview in the capital, Addis Ababa, on Tuesday.