Risk experts are becoming more concerned by the fact sub-Saharan borrowers are incurring liabilities again.
Africa has long had a fraught relationship with the capital markets – can the continent put that difficult history behind it and, crucially, fund the next stage of its development?
With global liquidity conditions tightening, local currency bond markets have a more important role to play in financing African governments and companies. While Ghana and Nigeria are leading the way, other markets are still in the early stages. Poor transparency and liquidity, and a multiplicity of legal regimes are holding back foreign investment.
Africa's best bank for financing 2018: Citi
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Nigerian banks make a mint from a crisis
Oil prices and currency controls created opportunities for some banks, which reported bumper gains from FX and fixed income last year, but no one is expecting a repeat of that. Can lending keep them sweet?
Zimbabwe opens for business
Now Mugabe is gone, one of the poorest nations in southern Africa can see the first signs of interest from international investors, but a chaotic currency regime, heavily indebted economy and looming elections are turning initial euphoria into cautious optimism.
Zimbabwe leaps into the cashless future
While most countries have adopted e-wallets and mobile banking as a result of technological innovation and evolution, Zimbabwe was forced into it because of a financial crisis.
Ghana’s next oil boom is just around the corner
Arunma Oteh interview: New markets for the World Bank
Sub-Saharan Eurobonds hold up under pressure
Vulnerable 20: An in-depth series on climate change finance
Saving the world, one bond at a time
Africa: Afreximbank pushes at history’s wheel
Africa: Ghana’s power failure
Africa: Mozambique must make the right noise for debt
Fiscal risks take the shine off Ghana’s prospects
Africa: Mozambique looks to IMF as debt woes resume
Country deems debt unsustainable; IMF support may be imminent.
Awards for Excellence 2016 Africa: The silver lining in black gold’s fall
They might not like to admit it, but the decline in commodities prices could be just the impetus that the regions’ investment banks, and their capital markets, need.
Euromoney’s country risk survey shows the safety of sub-Saharan Africa (SSA) issuers is once again in question, as economies flounder, debts spiral and capital access tightens.
Kenya’s mobile bond on hold
First there was M-Pesa, Kenya’s innovative and highly popular text-banking service that turned mobile phones into mobile ATMs, transferring money by SMS.
Africa: Ethiopia takes a different path
Country risk: Angolan investors ignore risks
Yield for Ghana bond hits double digits
Highest mark of any African Eurobond in 2015; debt sustainability questions linger.
Eurobond option still on the cards for Angola
Armando Manuel, Angola’s finance minister, says that Angola will still issue a Eurobond despite recurring delays.
Angola's de-dollarization drive
"Bonds issued in kwanza indexed to the dollar are an asset that has been on the rise over the last couple of years."
Africa FX special report: Still an appetite for African debt
Emerging-market turmoil stemming from a raft of global issues has dented bond issuance from Latin America to emerging Asia. Africa has been hit hard too, though the picture here is a mixture of good and bad.
Angola: New exchange faces liquidity question
One of the aims of the exchange is to provide a modern platform for trading bonds and stocks that meets international standards, says Pedro Pitta Groz, CEO of Bolsa de Dívida e Valores de Angola (Bodiva).
No Eurobond plan for Nigeria Access Bank post Moody's rating
Access Bank has become the second bank in Nigeria to receive a rating from Moody’s, illustrating the bank’s strengths despite challenging macroeconomic conditions.
Ghana’s $1.5 billion Eurobond plan to test weary investor appetite
As Ghana prepares to return to the Eurobond market, bankers say the sovereign’s debt sustainability will be tested, amid weak real-money appetite for frontier economies.
Africa: New Islamic finance for a growing continent
With expanding economies and hundreds of million Muslims, Africa deserves to be a bigger part of Islamic finance. After a slow start, there are signs the sector is beginning to gain the crucial mass and legislative backing it needs.
Africa: Power shines bright despite Abil collapse
Investors and issuers think alternative energy might soothe the bruises left by the failure of African Bank.
Innovations in Islamic Finance 2015: Morocco Safi
Helping to demonstrate the role that Islamic finance can play in Africa, which was one of the themes of the year.
AFC inaugural Eurobond benefits from Nigeria’s post-election relief
Africa Finance Corporation's (AFC) debut bond is buoyed by positive investor sentiment towards sub-Saharan Africa's (SSA) largest economy.
Bumpy ride for South African investors
The Brics sovereign is still worrying the risk experts – and its downgrades seem likely to continue.
Escalating risks for sub-Saharan African Eurobond issuers
Risk experts have become increasingly concerned about prospects for the majority of African sovereign borrowers that are considering issuance in 2015. Will investors demand a premium?
Cote d’Ivoire kicks off African Eurobond market for 2015
Cote d’Ivoire’s latest Eurobond and the first out of sub-Saharan Africa this year indicates investor appetite for African sovereign debt and the country’s strong fundamentals.
Ghana-IMF deal faces hurdles amid likely delay
Ghana has been in discussions with the IMF since September over a new programme, but the March deadline is likely to be missed as the administration seeks to resist pre-election giveaways and cut the public-sector wage bill, say analysts.
Angola to test African Eurobond appetite
Angola could become the first African sovereign bond borrower since the great oil price crash this year in a debut deal that will set the tone for frontier-market debt.
African Eurobonds suffer as commodity prices slump
African capital markets have been driven by a boom in Eurobond issue during the past two years, but supply and demand has come under fire after plummeting oil and commodity prices.Navigating Africa’s disparate markets
Illiquid markets, limited exchanges and sometimes vague institutional information make Africa’s securities landscape difficult to navigate. Firms such as Imara are in a good place to act as guides.
Angola sets sights on capital-markets reform
The development of Angola's capital markets has been long promised but recent indications from the country's capital-markets commission suggests secondary public-debt trading could begin as early as next month. Nevertheless, it's unclear when the stock exchange will open its doors.
Kenyan corporates to raid Eurobond market
Kenya’s top-tier corporates and financial institutions are primed to follow hot on the heels of the sovereign’s Eurobond issue. But the volume is likely to be modest relative to Nigeria.
South Africa sukuk draws in Middle East and Asia
South Africa issued its long-awaited debut sukuk on Wednesday in a bid to diversify away from conventional means of fundraising and attract investors in growth markets in the Middle East and Asia.
SSA corporate funding: Sub-Saharan Africa set for more equity deals, survey finds
Sub-Saharan Africa’s capital markets continue to make up a tiny proportion of overall global investment banking activity. Investment banking fees for the region in the first eight months of the year totalled less than $200 million, a fraction of a global fee pool of close to $60 billion, according to data from Thomson Reuters.
Bankers are hoping the avalanche of low-fee African sovereign Eurobond deals will provide a gateway to more-remunerative business, says Helmut Engelbrecht, head of investment banking in Africa for Standard Bank.
Islamic bond market: Wrong way for Senegal
Senegal should focus on diversifying funding channels rather than marketing itself as an Islamic finance hub, which could limit investor interest.
Africa: Senegal opens an Islamic window
The country is forging ahead in its aim of becoming a regional Islamic finance hub, issuing its debut sukuk in July. However, questions remain as to exactly how dedicated it is to reaching this goal.
Cote d’Ivoire’s return to Eurobond market prices within Kenya
Cote d’Ivoire’s return to the Eurobond market with a $750 million deal, three years after default, saw huge demand and priced within Kenya’s debut issue just a month ago.
Huge demand for Kenya debut Eurobond despite security risks
Although terrorist attacks raged in Kenya at the beginning of the week, the country’s first Eurobond and the largest in the continent excluding South Africa was received well, highlighting sustained demand for emerging market debt.
Bid to break infrastructure-financing impasse in Africa
The African Development Bank’s Africa50 fund aims to attract institutional investors to commercially viable infrastructure projects in the continent, but there is still a huge gap to fill, say infrastructure experts.
African sovereign sukuk to take off this year
During a discussion on capital market development at the annual meeting of the African Development Bank in Rwanda, panellists argued sovereign sukuk issuance will finally take off this year in a bid to diversify sources of long-term dollar financing away from the Eurobond market.
IFC bond aims to breathe life into Rwandan local debt market
The Rwanda debt market has been given a boost after the successful issue of the International Finance Corporation’s first bond in Rwandan francs, but regulators face an uphill battle to nurture the fledgling bond market.
Fears that African states have over-indulged in sovereign issuance are exaggerated.
Mozambique seeks to come onstream
The country has new wealth thanks to some big natural resource discoveries. They spell opportunity for both foreign and local institutions. How does such a small economy cope with such big demands?
Could the rise of ‘original sin’ condemn African governments once more?
The case against African sovereign bond issuance – from a moral and debt-servicing perspective – is too bearish but local FX depreciation represents a risk.
Is private equity the easy way to the sub-Sahara?
Gaining diversified access to the African growth story can be difficult when local capital markets are limited and illiquid. Private equity should help fill the gaps.
Plunging asset prices threaten Ghana Eurobond plan
Ghana's currency and Eurobond yields took a big hit last week as markets continued to take fright over its twin deficits. Here's the sorry tale in pictures.
Stabilizing risk trends for Morocco and Tunisia suggest MENA is poised for a comeback
Rising risk scores since 2013 are providing investors with encouragement that the worst is over for the troubled region. Yet sovereign risk remains heightened in familiar territories, with the Syrian turmoil persisting, leaving Gulf states and Israel as relative oases of safety.
Africa: Sovereigns weigh the price of diversification
African countries’ ability to access diversified funding is becoming more important. Deepening the local-currency bond markets is essential, but is the price worth paying? And are development organizations doing enough?
Zambia faces 8.5% yield for Eurobond – analyst
Zambian policymakers are poised to tap the international market for a second time, but they cannot expect similar terms set in the 2012 issue.
Capital flows: Ghana rating actions show African currency risks
Fiscal slippage, less FDI and lower export prices make Ghana among most vulnerable; Eurobond access still cheap.
Jury out on African Eurobonds amid Fed-tapering threat
A flurry of Eurobond issuance out of Africa was characterized by cheap funding as portfolio funds flooded Africa looking for yields, but as Fed tapering comes to the fore, African sovereigns might tilt back towards local currency bond markets.
Fed tapering will prompt rises in yields for African hard-currency debt, but this doesn’t mean that countries with strong economic fundamentals should hold off issuing.
Rwanda plots a capital market course
Many Rwandans questioned the need for the country’s inaugural Eurobond. Initial plans were derailed by the UN. But its successful performance has encouraged policymakers to deepen the country’s capital markets and create a unique business platform.
Kenya unlikely to pay punishing premium for debut Eurobond – analysts
Although Kenya missed out on low nominal yields for emerging market issuance before the May to August rout, the country will not pay through the nose for credit-specific risk, despite the recent terrorist atrocities at Westgate Mall, its twin deficits and large size of the deal at $1.5 billion to $2 billion, say analysts. However, the country faces an uphill battle to issue before the Christmas holidays.
Debt capital markets: Nigeria paves way for post-tapering Africa debuts
Federal Republic prices $1 billion bond; Ghana returns; banks working on Kenya debut.