Tanzania urges Citibank to expedite credit rating

Washington DC. The government has urged Citibank to expedite Tanzania’s credit rating exercise in an effort to put the country on the right path to acquire more development funds from international financial markets.

Presenting the 2021/22 budget in Parliament in June last year (2021), Finance and Planning minister, Dr Mwigulu Nchemba said Tanzania would finalise the sovereign credit rating process to facilitate access to international financial markets through issuance of sovereign bonds. The rating, he said, would enable Tanzania to measure its position in the international financial markets and assist prospective lenders in the assessment of the risks.

He categorically said to access the global Eurobond market, the country requires an official credit rating for the global Eurobond market which is estimated to have more than $30 trillion available for the countries that seek financial resources through loans from highly liquid international capital markets to finance development projects.

This approach is also used by international organisations such as the World Bank and the African Development Bank to fund their projects around the world.

And, speaking after his meeting with senior executives from America’s Citibank and Japan’s Mitsubishi Bank, Dr Nchema said the credit rating would enable Tanzania to get more funds for development financing.

“I promised in Parliament last year during the presentation of the 2021/22 budget that a credit rating would be concluded,” he said, urging Citibank to complete the exercise before July this year.

In her remarks, the minister of State in the Zanzibar President’s Office (Finance and Planning), Ms Saada Mkuya Salum, said they held discussions with executives from Japan’s Mitsubishi Bank, adding that the discussions went well. She said the Japanese lender pledged to help Tanzania with development loans which will be issued on affordable terms. She said the loans will seek to expedite the implementation of the existing and new strategic development projects across Tanzania. In Zanzibar, she said, the loans will be directed towards the implementation of projects that are directly linked to the blue economy and development of infrastructure projects that have a direct impact on lives of people in the Isles. These include development of seaports, airports, roads, electricity and energy, tourism and fisheries among others.

Speaking during the meeting, Citibank managing director Peter Sullivan and a delegate from Japan’s Mitsubishi bank pledged to cooperate with Tanzania in an effort to ensure that the East African nation gets its credit rating and also the funds its requires to meet its development aspirations. In March, 2018, the fifth phase administration of former President John Magufuli trashed Tanzania’s sovereign rating that was published by Moody’s on ground that the company had published the ratings “prematurely”.