Inside Kenya’s $900mn Eurobond buyback offer

Kenya has recently announced a significant move in its financial strategy by launching a buyback offer for its $900 million Eurobond due in May 2027. This buyback is set to be financed by a new issuance of US dollar denominated notes, with pricing expected around February 27th. To gain more insights into this development and the overall market outlook, CNBC Africa had the opportunity to speak with Carol Nampurira, the Corporate Sales Manager for Energy and Infrastructure at Stanbic Bank Uganda. Nampurira shared valuable perspectives on the implications of Kenya's buyback offer and shed light on Uganda's engagements with the International Monetary Fund (IMF). The conversation also touched on the performance of the Ugandan shilling amidst global geopolitical tensions. Here are the key highlights and perspectives from the interview: Kenyan Buyback Offer and External Debt Management: Carol Nampurira highlighted that Kenya's decision to launch a buyback offer for its Eurobond is a proactive step in managing its external debt. With a focus on liability management, the move is expected to receive positive sentiments from investors. Nampurira emphasized the importance for the Kenyan government to implement additional strategies to address the widened current account deficit, crucial for the renewal of the IMF program in 2025. Uganda's Engagement with IMF and Economic Outlook: Discussing Uganda's engagement with the IMF, Nampurira noted the positive growth forecasts driven by expectations of fast oil production by 2025. She highlighted Uganda's success in post-pandemic recovery, attributed to sound economic policies. As Uganda prepares for the renewal of its IMF program, discussions are centered around key parameters such as debt consolidation, fiscal deficit, and reserves management. Despite progress in managing debt-to-GDP ratios, risks remain, particularly in reliance on projected oil revenues and current account deficit. Performance of the Ugandan Shilling and Market Stability: Nampurira provided insights into the performance of the Ugandan shilling, noting a year-to-date appreciation and stability in trading ranges. She attributed the stability to various factors including portfolio flows, remittances, and tourism earnings. While corporate demand may impact short-term fluctuations, the overall outlook remains stable. Continuity in Currency Protection under New Leadership: Addressing the change in leadership at the Bank of Uganda, Nampurira expressed confidence in the central bank's commitment to policies that safeguard the currency. She highlighted a market-friendly approach and expected continuity in measures to support market stability. With a focus on advancing policies favorable for the market, the central bank's stance is expected to remain supportive under the new leadership. As developments unfold in the East African region's financial landscape, stakeholders will closely monitor the outcomes of Kenya's buyback offer, Uganda's engagements with the IMF, and the stability of the Ugandan shilling amidst evolving global dynamics.