Bond Markets in Africa

By Yibin Mu, Peter Phelps, Janet Gale Stotsky

January 14, 2013

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Yibin Mu, Peter Phelps, and Janet Gale Stotsky. Bond Markets in Africa, (USA: International Monetary Fund, 2013) accessed December 3, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

African bond markets have been steadily growing in recent years, but nonetheless remain undeveloped. African countries would benefit from greater access to financing and deeper financial markets. This paper compiles a unique set of data on corporate bond markets in Africa. It then applies an econometric model to analyze the key determinants of African government securities market and corporate bond market capitalization. Government securities market capitalization is directly related to better institutions and interest rate volatility, and inversely related to the fiscal balance, higher interest rate spreads, exchange rate volatility, and current and capital account openness. Corporate bond market capitalization is directly linked to economic size, the level of development of the economy and financial markets, better institutions, and interest rate volatility, and inversely related to higher interest rate spreads and current account openness. Policy implications follow.

Subject: Corporate bonds, Financial institutions, Financial markets, Fiscal policy, Fiscal stance, Government securities, Market capitalization, Securities markets

Keywords: Africa, African bond markets, Bank interest, Bond market development, Capitalization data, Corporate bond, Corporate bond market capitalization, Corporate bonds, Credit market, Development lag, Fiscal stance, Government securities, Government securities market, Government securities market market capitalization, Market capitalization, Market database, Market development lag, Market estimation, Market result, Securities markets, Set back corporate bond bond market, Sub-Saharan Africa, WP

Publication Details

Pages:

53
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2013/012
Stock No:

WPIEA2013012
ISBN:

9781475527148
ISSN:

1018-5941

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