Tanzania tests investor appetite for first Eurobond in more than a decade

Tanzania is exploring its first international Eurobond sale in more than a decade, joining a growing wave of African sovereigns returning to global debt markets as low borrowing costs and renewed investor appetite reopen access to international capital.

The East African nation held a non-deal investor roadshow in London on Wednesday, where government officials met with global fund managers to gauge demand for a potential hard-currency bond issue, according to people familiar with the matter cited by Bloomberg.

Tanzania’s planned return comes as some African governments enjoy their strongest access to international debt markets in years. Earlier in the year, African countries had collectively raised nearly $6 billion in international debt markets, the highest level in 13 years, as lower global borrowing costs and improving investor appetite encouraged investors back into frontier markets.

Countries that have tapped the Eurobond market this year include Benin, Kenya, the Republic of Congo, Cameroon, and the Democratic Republic of Congo (DRC), raising funds to refinance maturing debt, plug budget deficits, and finance infrastructure projects.

If successful, Tanzania’s return would reinforce East Africa’s renewed access to international capital markets following Kenya’s Eurobond issuance earlier this year, highlighting the improving investor appetite for African sovereign debt despite lingering global economic uncertainty.

The meetings in London, arranged by ICBC Standard Bank, could pave the way for the country’s first hard-currency sovereign bond issuance since 2013, the people said. The roadshow is being attended by officials from the country’s Ministry of Finance, the Bank of Tanzania and the Capital Markets and Securities Authority, reflecting the government’s intention to test investor appetite before deciding whether to proceed with a Eurobond sale.

Representatives of the Tanzanian government and ICBC Standard Bank did not immediately respond to requests for comment.

The nation is seeking fresh external financing as it ramps up spending on infrastructure and social services while facing a sharp decline in concessional funding from development partners amid growing international scrutiny of its human rights record. To help bridge the financing gap, the government plans to borrow 4.43 trillion Tanzanian shillings ($1.7 billion) from external sources during the current fiscal year.

Proceeds from a Eurobond, if issued, are expected to finance priority infrastructure projects, including investments in energy, transport networks, and port expansion, as Tanzania seeks to sustain economic growth and strengthen its position as a regional trade and logistics hub.

A successful issuance would also diversify the country’s funding sources beyond concessional loans and the domestic debt market while providing an important test of international investor confidence in Tanzania’s macroeconomic outlook and fiscal management.

Tanzania last accessed international commercial debt markets in 2013, raising $600 million through a private placement that matured in 2020. A return to the Eurobond market would mark the country’s first international bond issuance in more than a decade and underscore its renewed engagement with global capital markets.