Alongside the riches, Ghana’s oil boom has also ushered in a string of woes, including huge infrastructure needs and the stubborn problem of rampant public expenditure. So, at a time when investors are displaying appetite for sub-Saharan African bonds, it’s little surprise then that the country is planning to issue a Eurobond worth up to $1bn. Continue reading »
In my book Dead Aid I suggested that African governments could and should access the international capital markets to finance their development objectives such as infrastructure, healthcare and education. I argued that the relatively transparent global bond markets would help impose discipline on governments that were otherwise viewed by investors as reckless and, in many cases, corrupt. Critics argued that my suggestion was naive, and that African policy makers were ill-equipped to venture into the international debt markets.
Four years later, and African governments are proving the naysayers wrong. Continue reading »
In October last year, beyondbrics wrote of a sub-Saharan debt rush – partly based on Zambia’s successful issue, and on investors’ hunt for yield and diversification.
But now there is now talk of “original sin” – excessive borrowing in non-domestic currency; yields have increased and spreads have widened. What’s going on? Chart of the week takes a look. Continue reading »
2012 was a great year for frontier-market hard-currency bonds, and Angola hopes to get in on the action in 2013. The oil producer announced on Friday plans to raise $1bn from a debut eurobond issue later this year. Continue reading »
Rating agency Fitch is ending the year with predictions that sub-Saharan Africa will be “a bright spot in an otherwise gloomy world in 2013″. With growth expectations of above 5 per cent, the region is set to benefit from rising investor interest, and upgrades may be in order.
Among the agency’s 15 rated sub-Saharan sovereigns, nine have stable outlooks and three positive. So who are the ones to watch? Continue reading »
African sovereign debt has quadrupled in the last decade, but compared to other regions still has a long way to go. As Eleanor Whitehead of This is Africa explains to Rob Minto of beyondbrics, investor appetite for African bonds is growing – so which countries are next?
With emerging market debt markets booming, is now time for African nations to join in? If Zambia’s recent bond is anything to go by, the answer would be a firm ‘yes’ – as many analysts are fond of pointing out, Zambia’s yield on its 10-year bond is lower than that of Spain.
So what’s stopping African countries jumping in and issing international bonds? Continue reading »
Joining the club can bring a whole new bunch of friends. In the case of Nigeria, which last month was admitted by JP Morgan to its emerging market Government Bond Index with effect from October, it means a lots of new overseas investors – and borrowing costs dropping off a cliff.
But that doesn’t mean everything is rosy. Inflation is still stubbornly high, above the single-digit target, and the central bank is expected to hold interest rates on Tuesday. Continue reading »
The Republic of Zambia this week sold its maiden 10-year dollar-denominated bond, raising $750m from international investors. Funds swamped the deal with orders of about $12bn, allowing the country to price the bond at a yield of just 5.625 per cent. Spain’s 10-year bond yield is currently 5.78 per cent. Continue reading »
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