Bond financing in Africa – the next big thing

While the global financial crisis has generally slowed the development of emerging bond markets, interest in bond financing of infrastructure in Africa continues to grow in anticipation of the recovery. Across the region, governments are increasingly cognizant of the role of large infrastructure investments as a stimulus to support economic growth. For utilities or local authorities in Africa seeking to raise financing to meet the pressing demands for infrastructure, the discipline and transparency inherent in a robust bond market can reduce risk and lower the cost of capital. This note provides an overview of bond markets and discusses the advantages and challenges that subnational borrowers should consider.