It takes money to build and maintain roads, and to create more efficient modes of transport that will to create better lives for ourselves. Many governments issue bonds to raise funds to do just this.
Despite some global challenges, Africa is still issuing debt and investors are still buying up that issuance.
At Standard Bank Group, we believe the appetite for African bonds remains high despite a recent decline in confidence ratings across the continent. Several African financial institutions and corporates have raised money in in this way on offshore debt markets in recent years.
Africa became a favourite for international investors in bonds when the 2008 financial crisis hit. Interest rates dropped on other continents to near-zero levels.
Africa moved to the top of the list for international investors looking to find a good return on their investments. This resulted in an increase in sovereign bond issuance from Nigeria, Kenya, Zambia, Ivory Coast, Senegal, Ghana and South Africa. Kenya issued dollar-denominated bonds for the first time this year and also issued the largest bond on the continent ever.
Infrastructure development is not being left only to governments; corporates operating on the continent are also contributing by putting in place the infrastructure required for the development of their business.