Foreign Investors Say Kenya is Ripe for Another Eurobond

Foreign investors have given President William Ruto a nod for another Eurobond after African countries were locked out of the international market.

According to a report by global media company, Bloomberg, Simon Quijano-Evans, chief economist at Gemcorp Capital Management, heaped praise on Kenya’s strategies for settling the Eurobond debt, noting that Kenya could be the first African country to receive principal funds in 2024.

He added that Kenya’s interest rates were initially high compared to the United States but have significantly dropped, making it cheaper for Kenya to access a new Eurobond, which is typically denominated in US Dollars (USD).

This is a positive sign for Kenya’s economy as investors are becoming more confident in Kenya’s ability to repay its debt. In June 2024, Kenya’s latest Eurobond will have matured, compelling the country to pay the Ksh317 billion. 

President William Ruto speaking during a meeting with Jubilee leaders at State House Nakuru on January 11, 2023.


In December last year, Kenya paid Ksh10.8 billion (USD 68.7 million) interest due on the Eurobond after dropping the initial plan to make an advance payment of the principal before the end of 2023. 

“Kenya could well be the first to issue this year and one would imagine that market demand would be forthcoming,” Evans stated.

“If markets perceived that a new bond issue was coming, that could also help pull down spreads from current levels as it would imply an improvement in the country’s financial position for 2024.”

Other contenders to end the borrowing drought included South Africa, Angola and Nigeria.

According to Moody’s – a firm that provides international financial research on bonds issued by commercial and government entities, the projection of many African countries portrays a negative outcome this year, as they risk defaulting.

“That’s a reflection of risks from large debt burdens and the difficulties many countries will have refinancing at rates they can afford,” the firm noted.

Ethiopia, one of the countries that defaulted on paying the interest fee on its Ksh159 billion Eurobond, caused international investors to be worried about the heightened risk of injecting capital into projects in African countries.

“Many will remain locked out of international debt markets, while for many interest rates will be unaffordable,” Robert Besseling, Chief Executive Officer of Pangea-Risk, an advisory firm focusing on analysis of economies in African countries.

It has been 22 months since an African nation received an international bond, a clear indicator that investors had shied away from the continent. 

A photo of the National Treasury building.


National Treasury

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