Bond Markets in Africa

Author/Editor:

Janet Gale Stotsky ; Peter Phelps ; Yibin Mu

Publication Date:

January 14, 2013

Electronic Access:

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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.

Series:

Working Paper No. 13/12

Subject:

English

Publication Date:

January 14, 2013

ISBN/ISSN:

9781475527148/1018-5941

Stock No:

WPIEA2013012

Price:

$18.00 (Academic Rate:$18.00)

Format:

Paper

Pages:

53

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