Debt issuance down 22% in sub-Saharan Africa

Jan 20, 2016

The prospect of a US rate hike has reduced investors' appetite.

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

Governments in the region have issued $15.5 billion (€14.25 billion) in debt on national, regional and international markets in 2015, down 22 per cent on 2014 and the lowest level since 2012.

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.

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.

The weight of the debt in the GDP of African states has now regained its 2005 level.

According to a recent study from financial data provider Dealogic, over 10 years, the debt raised on international markets by these countries totalled nearly $36 billion.

This increase, according to the study, neutralised the debt relief of over $100 billion achieved in 2005 after an international campaign.ADNFCR-2976-ID-801810431-ADNFCR