(Bloomberg) — Ethiopia will develop a secondary market in government and corporate bonds next fiscal year to expand the country’s fundraising options, a central bank official said.
The National Bank of Ethiopia will create the market in the year ending July 7, 2016, Yohannes Ayalew, vice governor of monetary stability, said in an interview Sunday in Addis Ababa, the capital.
“Rather than resorting to central bank borrowing the government can use this instrument to finance most of its” requirements, he said. “The equally important reason is corporations and new investments can get alternative means of issuing bonds and financing their needs.”
Ethiopia sold $1 billion of Eurobonds for the first time in December. The Horn of Africa country has capital controls and, as a result, foreigners will continue to be excluded from trading in the country’s domestic debt, Yohannes said.
“Not at the moment as the capital account is closed,” he said.
Ethiopia’s economy grew quicker than any other African economy at an average of 10.9 percent over the past decade, boosted by spending on infrastructure, International Monetary Fund data shows. The country is domestically funding the continent’s biggest hydropower plant on the Blue Nile River, known as the Grand Ethiopian Renaissance Dam, that will probably increase electricity supply five-fold by 2020.
Ethiopia doesn’t plan other significant monetary policy changes, Yohannes said.
To contact the reporter on this story: William Davison in Addis Ababa at wdavison3@bloomberg.net