Localising Sovereign Debt: The Rise of Local Currency Bond Markets in Sub-Saharan Africa

Ulrich Volz, Florence Dafe and Dennis Essers

No 202, Working Papers from Department of Economics, SOAS University of London, UK

Abstract: This paper analyses the development of local currency sovereign bond markets (LCBMs), a potentially important but often overlooked source of longer-term public finance, in Sub-Saharan Africa (SSA). We construct a novel dataset comprising 28 SSA countries for the period 2000-2014 to identify the main correlates of LCBM capitalization, of local currency bond (LCB) tenors and of LCB issue yields. Our econometric analysis is complemented by case studies of Ghana, Kenya and Nigeria, where we further investigate the drivers of LCBM development and place LCBMs in a broader public debt context. We find that LCBMs have become important sources of financing in SSA but that new vulnerabilities emerge from the costs of domestic borrowing, short bond tenors and the composition of the investor base.

Keywords: Public debt; local currency bond markets; long-term finance; Sub-Saharan Africa (search for similar items in EconPapers)
JEL-codes: F21 F34 G23 H63 O11 (search for similar items in EconPapers)
Pages: 40
Date: 2017-01
New Economics Papers: this item is included in nep-afr
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Citations: View citations in EconPapers (13)

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https://www.soas.ac.uk/sites/default/files/2022-10/economics-wp202.pdf (application/pdf)

Related works:
Journal Article: Localising sovereign debt: The rise of local currency bond markets in sub‐Saharan Africa (2018)
Working Paper: Localising sovereign debt: the rise of local currency bond markets in sub‐Saharan Africa (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:soa:wpaper:202

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