Eurobond or Eurobomb?
By Cédric Mbeng Mezui, Coordinator, African Financial Markets Initiative (AFMI)
Sub-Saharan African countries issued a total of $35.9 billion in sovereign bonds between 2005 and 2015. This sudden rush to tap into the international markets was encouraged by a range of factors, including rapid growth and better economic policies in the region, high commodity prices, and low interest rates in developed countries. However, the international market situation has changed, resulting in lower export revenues for African countries, depreciation of African currencies and reduction in their GDP growth. In this context, our guest blogger examines whether repayment of the eurobonds will lead to "eurobombs", triggering another debt crisis on the continent.