UPDATE 1-Africa trade bloc COMESA mulls regional infrastructure bond
(Adds no comment on possible size of bond)
By Beatrice Gachenge
NAIROBI, Sept 27 (Reuters) - The African regional trade bloc Common Market for Eastern and Southern Africa (COMESA) is considering issuing a regional infrastructure bond and is seeking advisers, a senior trade official said on Tuesday.
The trade blocs COMESA, Southern African Development Community (SADC) and the East African Community (EAC) have embarked on aggressive infrastructure development to bolster their competitiveness, which investors say is hurt by problems such as poor roads and railways and unreliable power supplies.
"The advisers will tell us how to raise the money, that is why we are recruiting them. We will probably know by January," Sindiso Ngwenya, secretary general of COMESA, told Reuters after a news briefing. Ngwenya declined to comment on the possible size of the bond.
Infrastructure development is a capital-intensive business that most African governments struggling with large budget deficits cannot afford, making other regions more attractive to investors.
Members of major trading blocs in Africa plan to pitch multi-billion dollar infrastructure projects to development partners at a two-day regional conference in Nairobi to shore up financing support, a senior trade official said on Tuesday.
Ngwenya attributed the high cost of trade in the region to logistics costs, with poor infrastructure accounting for as much as 60 percent of such spending.
"Our expectation is that out of the $5.2 billion projects that are ready for financing, they (development partners) will finance them," Ngwenya told Reuters. Continued...