Quantitative easing helps float Africa’s infrastructure, but
Ethiopia’s internally funded Renaissance Dam an exception
By Adam Green
African governments must use bond revenues to address critical growth constraints, while global conditions are in their favour.
Sub-Saharan Africa has a $7bn potential bond pipeline in 2013. Zambia and Rwanda recently issued heavily over-subscribed bonds, and analysts anticipate issuances from Nigeria, Angola, Ghana (its second), Kenya and Zambia (again). Tanzania has hired a rating adviser as a precursor to a bond issuance in due course, with Mozambique an outside bet.
This is only partly a response to the continent’s robust growth. Low yields elsewhere (especially in the eurozone and the US) – as well as excess global liquidity due to quantitative easing – are the global trends pushing bond-hunters to Africa. “There is a lot of excess liquidity internationally and some of that is being used to buy high-yielding assets…
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