Kenya to launch diaspora bonds

The Central Bank of Kenya is for first time targeting Kenyans living abroad in the upcoming infrastructure bond.

CBK intends to raise 36 billion shillings through the issuance of the infrastructure bond.

In a statement, CBK says it believes the avenue will offer the Kenyan Diaspora with an attractive investment opportunity as it is estimated they hold up to 160 billion in checking accounts around the world.

Modalities to facilitate the diaspora to participate in the Infrastructure Bond are being worked out.

Finance Minister In Uhuru Kenyatta in his budget estimates tabled last month said that there was a deficit of 7.4% of GDP or 236.2 billion shillings 119.5 billion of which would be sourced from the domestic market and 116.7 billion externally.

Of this 30% of the domestic borrowing or 36 billion shillings was to be raised through an infrastructure bond.

The decision to involve the Diaspora is also believed to have been fueled by improved remittances that hit 57.8 billion last year and were ranked the 4th largest foreign exchange earner in the country after tea, horticulture and tourism.

The last infrastructure bond issued by CBK was oversubscribed by 18% receiving 781 bids worth Sh37.4 billion against the Sh31.6 billion on offer.

Once the process succeeds, CBK says other long tenured government paper will also be available for Kenyans abroad.

"Once this first step is successfully accomplished, lucrative bonds such as the 30 year Savings Development Bond and other long tenured bonds will also be rolled out to the Diaspora" said CBK in a statement.