Government bond issuances across many parts of sub-Saharan Africa are doing better than ever, reflecting a growing level of confidence in the continent’s stability and potential.
Africa’s commercial potential is generating interest in the world’s key financial markets. The continent’s nations are being seen less as destinations for aid and development spending, and increasingly as places to do business. Recent peaceful political transitions in nations such as South Africa and Kenya have fuelled demand for African government debt, with Kenya’s bond yields outperforming those of many European nations.
This is partly the result of significant advances in the region’s commercial climate, as governments become increasingly accountable to their populations, as economic and social wellbeing improves, and investor confidence grows. As our most recent Legatum Prosperity Index showed, though remaining the weakest-performing region, sub-Saharan Africa achieved the second largest rise in its governance and business environment scores, painting a welcome picture of increasing stability.
For many traders betting on the future, Africa’s opportunities increasingly outweigh its risks. This bodes well for the continent’s individuals, communities and nations, whose pathway from poverty to prosperity is dependent on finding solutions to their own development challenges.
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The Legatum Institute