DIG/ The announcement of the early redemption of 50% of its Eurobond, or 192 billion francs, contracted in 2015 by the Ali Bongo Ondimba regime sparked numerous rave reactions towards the President of the Transition, Brice Clotaire Oligui Nguéma
Without having more details on the nature of this operation, several experts and local observers see in this unprecedented operation a host of advantages ranging from the re-credibility of Gabon on international markets to the country’s future access to conditions of more advantageous financing.
However, certain financial analysts contacted by the editorial staff of Direct Infos are still wondering about this operation, which curiously has still not been the subject of an official announcement from the Ministry of the Economy, or that of the Budget.
The communications department of the Ministry of the Economy simply said “We will communicate in due course”. End of quote.
Thus, this explanatory void leaves room for the most basic questions.
Which banks will provide the State with the financial resources to buy back the 50% of the remaining Eurobond?
Is this a debt reconversion that could lead the exposure in dollars to an exposure in FCFA?
What are the conditions applied by local banks in terms of cost and maturity?
Under what conditions (rate and maturity) will this operation take place?
What would be the conditions under which Eurobond holders would agree to sell their securities?
Which local banks are involved in this operation?
How can we measure the success of this operation?
So many questions that deserve answers from the Ministry of the Economy and Budget in order to better understand this operation.
As a reminder, this Eurobond was issued in 2015 by the deposed regime with the aim of mobilizing the sum of 500 million dollars with a maturity of 10 years, for a rate of 6.95%.
These funds were to be used to finance projects in the fields of energy, drinking water supply, education and health.
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2024-10-29 08:08:00
Interview between Time.news Editor and Financial Expert on Gabon’s Eurobond Redemption
Time.news Editor (TNE): Good day, and welcome to our interview section! Today, we are thrilled to have with us Dr. Amina Ndong, a renowned financial analyst and expert in international debt markets. Dr. Ndong, thank you for joining us.
Dr. Amina Ndong (AN): Thank you for having me! I’m excited to discuss this important development regarding Gabon’s Eurobond redemption.
TNE: We recently saw the announcement of the early redemption of 50% of the Eurobond contracted in 2015 by the previous regime, totaling 192 billion francs. What are your initial thoughts on this move by President Brice Clotaire Oligui Nguéma?
AN: This decision is quite significant. It indicates a proactive approach by the new administration to stabilize Gabon’s financial standing. Early redemption can enhance the country’s credibility in international markets, especially after periods of political instability.
TNE: Many are expressing optimistic views, citing potential advantages like improved access to financing conditions. Can you elaborate on how this might play out for Gabon?
AN: Absolutely! When a country successfully redeems a substantial portion of its debt, it sends a positive signal to investors and lenders. This can result in better interest rates and financing terms in the future. For Gabon, it’s also an opportunity to renegotiate existing debts or seek new investments, fostering economic recovery and growth.
TNE: Despite the positive reactions, some analysts are concerned due to the lack of an official announcement from the Ministry of the Economy or the Budget. What are the risks associated with this silence?
AN: That’s a valid concern. A lack of transparency can lead to uncertainty and skepticism in financial markets. Investors typically seek clarity about the sustainability of such operations. If key ministries have not communicated the details, it raises questions about the true financial health of the country or the sustainability of the new government’s policies.
TNE: Are there any potential challenges that Gabon might face following this operation?
AN: Yes, there are a few. Firstly, the government must ensure that the funds used for redemption do not impede necessary domestic investments and social spending. Secondly, if there is no clear economic plan outlined after this redemption, it might lead to a loss of momentum in investor confidence.
TNE: Given these complexities, what would you recommend for the Gabonese government moving forward?
AN: Transparency is paramount. The government should articulate its economic strategy clearly, illustrating how the redemption fits into a broader plan for fiscal stability and growth. Engaging with both local and international investors through open channels can reassure them of Gabon’s commitment to sound economic management.
TNE: Thank you, Dr. Ndong, for your insightful analysis on this pivotal moment for Gabon. It seems that while there are promising developments, careful navigation is essential to ensure long-term benefits.
AN: Thank you for having me! I look forward to seeing how Gabon’s economic story unfolds in the coming months.
TNE: And that wraps up our discussion for today. We appreciate your engagement with us, and we hope to cover more developments in Gabon’s financial landscape in the future.