African financial markets are relatively under-developed. The resulting lack of access to market-based finance places undue dependence on official sector funding and puts a brake on investment and growth, especially in the private sector. This paper sets out the case for developing bond markets in African countries and lists the key requirements for a viable financial sector strategy. Due to the importance of sovereign yield curves, the starting point should be to develop government bond markets, both domestic and external. This requires not only careful consideration of the characteristics of bond markets themselves, but also a lot of work in the banking sector, regulation, and the pension system as well as due consideration to the role, if any, of foreign investors. The reports concludes with a list of ten pieces of good advice for any African government wishing to begin the journey towards joining global financial markets.
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