African countries 'turn to capital markets for finance'

Mar 24, 2010

African countries are expressing an increasing interest in utilising international capital markets in order to generate finance to fund expansion, according to the ratings agency Moody's.

The agency said there are at least 12 potential issues valued at between $6 million (€4.49 million) and $8 million currently being worked on, with Kenya, Nigeria, Angola and the Ivory Coast four of the countries currently seeking to raise money on global markets, Reuters reports.

Senior Vice-President at the company Kristin Lindow was quoted as stating many nations and corporations across the country are starting to tap into bond markets "as opposed to exclusively relying on bank credit". Ms Lindow also noted a change in practice among African companies and banks, as they are becoming more willing to open up financial books for scrutiny.

"That is part of the change that is taking place ... there seems to be an advantage to being transparent," the news agency reported her as saying during a visit to Nairobi. South Africa recently issued a $2 billion bond sale in order to generate funding to finance its budget shortfall; however, Kenya has delayed plans to launch a $500 million Eurobond until the financial crisis has passed.