Tunisia has announced today that it will issue $1.75 billion of dollar-denominated bonds and Islamic sukuks in 2015 as it seeks funds to revive economic growth.
“We will issue $750 million in bonds at the end of January in addition to sukuks, which will reach $1 billion in the third quarter of the year,” Central Bank Governor Chadli Ayari told Reuters on the sidelines of a conference. He earlier told reporters the dollar-denominated issue would be for 10-year bonds while discussions with the market over the issue would start on January 15.
Tunisia’s move to the bond market continues the trend of African countries who have sought to raise fund for capital projects through the international financial market. Cameroon last week announced plans to raise $582 million through treasury bills and medium-term bonds to finance infrastructure projects. Kenya, Rwanda and Ivory Coast are among a host of African countries who issued bonds in 2014. The IMF has already warned about the consequences that may befall nations rushing into bonds, saying it could be bring back years of massive indebtedness.
Tunisia, however desperately needs funds to embark on infrastructural development, especially with its political transition to democracy complete after elections last year. According to Reuters, the government said late last year that to finance its 2015 budget, the country would need 8 billion dinars ($4.2 billion), of which 5 billion dinars would come from foreign sources. The agency adds that multilateral lenders have pledged aid to the North African state, which relies heavily on foreign tourism and remittances from its diaspora community for hard currency. According to the government, the country’s economy needs at least three more years of painful and politically difficult reforms to revive growth after the damage caused by the 2011 revolution.
