Ivory Coast's latest bond shunned by investors
The 2014-2022 bond launched in late April by Ivory Coast did not meet the government's expectations.The 2014-2022 bond launched in late April by Ivory Coast did not meet the government's expectations.
The operation has indeed only raised Cfaf61 billion(€ 93 million), although Cfaf120 billion were originally sought.
According to analysts, this failure is due to the fact that Ivory Coast's over-solicitation of the sub-regional financial market since the start of 2014, Ecofin news agency reports.
The Ivorian government raised Cfaf241 billion FCFA in February, Cfaf50 billion in March and Cfaf100 billion in April and plans to issue a $500 million eurobond in July.
"I think too much has been raised on the market in a very short time," said a fund manager, quoted by Reuters.
Executive Director of the International Monetary Fund (IMF), Christine Lagarde, recently warned African countries against the risks associated with bonds.
At the"Africa Rising" summit in Maputo on 29 and 30 May, she said that even though bonds generate additional funding, they increase the vulnerability of economies.
She believes that the debt of African countries could stifle their economies and derail the "excellent" economic conditions in the region.
In addition, she said investors have become more cautious and require more collateral in loan operations, and have started to demand higher interest rates for holding the debt of some African countries because of rising fiscal deficits.