African bond market recovery expected for the second half of 2016

Jun 06, 2016

According to Bloomberg, Nigeria, Ghana and Senegal are preparing a bond issue.

A recovery in the field of African sovereign bonds is expected for the second half of 2016, according to Bloomberg.

The Nigerian authorities are allegedly preparing a meeting with investors in London next week to consider launching a bond issue ranging from $500 million to $1 billion (€448 m to €896 m).

Ghana is also considering a new Eurobond by the end of the year to refinance a previous sovereign bond, and Senegal should also mobilise resources on markets to finance its infrastructure projects.

Between January 1 and May 31,2016, only three African countries have been active on the international debt market: South Africa, Mozambique and Ghana.

Several factors have reduced investors' appetite, including the prospect of a US rate hike, sinking currencies, the fall in oil prices and the slowdown of the Chinese economy, which has in turn slowed the growth of African countries.

Debt issuance in sub-Saharan Africa has even reached its lowest level in three years, according to new figures from Thomson Reuters.

Governments in the region have issued $15.5 billion in debt on national, regional and international markets in 2015, down 22 per cent on 2014 and the lowest level since 2012.

Yet in 2014, bonds had reached record levels, driven by historically low interest rates and the US Federal Reserve's very accommodative policy, designed to boost infrastructure projects.ADNFCR-2976-ID-801819740-ADNFCR