Gov­ern­ment now set to di­ver­sify re­source mo­bil­i­sa­tion, fi­nance deficit

Sunday Observer - - NEWS -

AF­TER the first-time is­suer rat­ings of B2 by Moody’s, gov­ern­ment is now in a bet­ter po­si­tion to di­ver­sify re­source mo­bil­i­sa­tion and to fi­nance the bud­get deficit, but there is a small price to pay.

Up un­til now, gov­ern­ment has been rais­ing money through the lo­cal fi­nan­cial mar­kets.

The county’s 2017/18 bud­get showed a deficit of 8.2 per cent of GDP (E4.8 bil­lion) for 2017/18.

Min­istry of Fi­nance Prin­ci­pal Sec­re­tary Bheki Bhembe said gov­ern­ment goes to the do­mes­tic fi­nan­cial mar­ket every week to look for fund­ing.

This is done through the auc­tion of Trea­sury Bills which the Cen­tral Bank of Swazi­land (CBS) auc­tions weekly on be­half of gov­ern­ment.

CBS Gen­eral Man­ager Fi­nan­cial Mar­kets Melvin Khomo said since the rat­ing out­comes were pub­lished in­ter­na­tion­ally, this was an­tic­i­pated to in­crease in­ter­na­tional in­vestors’ ap­petite in gov­ern­ment se­cu­ri­ties and fur­ther al­low gov­ern­ment to tap into in­ter­na­tional fi­nan­cial mar­kets.

“But there is still a lot of work to do. We still need to con­duct in­ter­na­tional road shows to pro­mote the coun­try as a po­ten­tial bor­rower,” he said.

Khomo said most African coun­tries have in the past few years tapped into in­ter­na­tional bond mar­kets.

He said the B2 rat­ing, though it was viewed spec­u­la­tive and high credit risk could not be a hin­drance for the coun­try to tap into in­ter­na­tional cap­i­tal mar­kets.

He said this was be­cause a lot of coun­tries who have gone to in­ter­na­tional cap­i­tal mar­kets to raise fi­nance were from both the in­vest­ment cat­e­gory and the non-in­vest­ment cate- gory.

“The only dif­fer­en­tia­tor is the price you charge,” he said.

At B2, the coun­try sits along­side the likes of An­gola, Ethiopia, Nige­ria, Rwanda, Uganda and Zambia and sits one notch lower than Kenya, Le­sotho and Sene­gal.

Coun­tries with the high­est rat­ings in­clude Botswana and Mau­ri­tius.

Khomo said most coun­tries within the South­ern African De­vel­op­ment Com­mu­nity ( SADC) were rated be­tween B1 and B3.

CBS Gover­nor Ma­jozi Sithole said they were not con­tent with the re­sults and this was not the time for the coun­try to rest on its lau­rels.

“We need to ad­dress the ar­eas that will help to be up­graded and we will have to work hard on th­ese,” he said.

Cap­tains try's first of in­dus­try fol­low­ing the pre­sen­ta­tion credit rat­ing re­port from Moody's. of the coun-

CBS GM Fi­nan­cial Mar­kets Melvin Khomo ex­plain­ing the ben­e­fits of sov­er­eign credit rat­ing.

Newspapers in English

Newspapers from Swaziland

© PressReader. All rights reserved.