What Determines Bond Market Development in sub-Saharan Africa?

Olatundun Janet Adelegan and Radzewicz-Bak, Bozena

No 09/213, IMF Working Papers from International Monetary Fund

Abstract: This study empirically analyzes the determinants of bond market development in a cross section of 23 sub-Saharan African (SSA) countries between 1990 and 2008. It considers the stage of development and the size of the bond market, as well as the historical, structural, institutional and macroeconomic factors driving bond market development in SSA. The study finds that the savings constraint is a key impediment to domestic bond markets development as well as financial market deepening, as it results in a low level of financial intermediation by the banks. Overall, the results show that a confluence of factors matters for the development of domestic bond markets in SSA; these include structure of the economy, investment profile, law and order, size of the banking sector, the level of economic development, and various macroeconomic factors. Policy implications include increased efforts to strengthen the investment environment and the need for a regional approach to bond market development.

Keywords: Access to capital markets; Banking sector; Bond markets; Bonds; Capital markets; Cross country analysis; External debt; Financial institutions; Financial systems; Investment; Nonbank financial sector; Public debt; Savings; Sub-Saharan Africa (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-afr and nep-dev
Date: 2009-09-30

Downloads: (external link)
http://www.imf.org/external/pubs/ft/wp/2009/wp09213.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:imf:imfwpa:09/213

Ordering information: This working paper can be ordered from
http://www.imf.org/external/pubs/pubs/ord_info.htm

Access Statistics for this paper

More papers in IMF Working Papers from International Monetary Fund
Address: International Monetary Fund, Washington, DC USA
Contact information at EDIRC.
Series data maintained by Christopher F. Baum ().