## Bond Markets in Africa

_IMF Working Papers, January 14, 2013_

## Source details

**Canonical URL:** [Bond Markets in Africa](https://www.imf.org/en/publications/wp/issues/2016/12/31/bond-markets-in-africa-40239)

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## Bibliographic details
- Authors: Yibin Mu, Peter Phelps, Janet Gale Stotsky
- Published: January 14, 2013
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781475527148.001

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### 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 and applies an econometric model to analyze the key determinants of African government securities market and corporate bond market capitalization.
- Policy implications follow.

### Key findings
- Government securities market capitalization:
  - Is directly related to better institutions and interest rate volatility.
  - Is 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.
  - Is inversely related to higher interest rate spreads and current account openness.

### Determinants analyzed (econometric model)
- Variables highlighted as positively associated:
  - Better institutions
  - Interest rate volatility
  - Economic size (for corporate bond market capitalization)
  - Level of development of the economy and financial markets (for corporate bond market capitalization)
- Variables highlighted as negatively associated:
  - Fiscal balance (for government securities market capitalization)
  - Higher interest rate spreads
  - Exchange rate volatility (for government securities market capitalization)
  - Current account openness (for both markets)
  - Capital account openness (for government securities market capitalization)

### Policy implications
- The paper derives policy implications from the econometric analysis aimed at deepening bond markets and improving access to financing in African countries.
- (Policy implications follow in the full paper.)

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_Source: https://www.imf.org/en/publications/wp/issues/2016/12/31/bond-markets-in-africa-40239_