IFR Special Reports

IFR Africa Report 2013

March of the Frontier Markets - First the good news: African sovereigns have tapped the international debt market with aplomb in the past 12 months. Repeat issuers such as Nigeria and Ghana as well as debut borrowers like Zambia and Rwanda wowed with their well executed and heavily over-subscribed international bonds, enabling them to squeeze on price and leaving investors hungry for public bonds in the pipeline for the likes Kenya, Senegal, Angola and others.

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Stories in Special Report

Winning over sceptics

African issuance has defied the rollercoaster year for emerging markets. Issuers have sometimes had to pay up to secure funds, but investors are ready to take a chance in return for yield and greater transparency.

Ancient traders together

Chinese investment in Africa has been steadfast while in recent years other nations focused on problems at home. A relationship forged around commodities to fuel the fires at home has broadened, but critics fear the benefits come at a high cost.

One to watch

India’s involvement in Africa goes back millennia. It is beginning to make its natural advantages count as it expands its economic role across the continent.

Volatility high, returns higher

Many of Sub-Saharan Africa’s equity markets are small – with the Seychelles Securities Exchange only opening in August with a single listing – but the returns have been big, for those able to access them. But beware the investor nervous about volatility.

South Africa feels the heat

These are tough times for South Africa, with economic growth slowing drastically. The effect on the pace of activity in the debt capital markets has been profound.

Rush to lend

Competition to lend to the best names has pushed pricing down in Africa to levels close to those seen in Europe and syndication has survived unlike in the rest of EMEA. But only for the best credits.

One bridge at a time

Project Finance: There’s no secret about Africa’s desperate need to invest in infrastructure. The only question is where the money will come from. Can multilateral institutions help overcome investors wariness about taking long-term risk in the continent?

Will interest taper off?

Africa’s sovereigns had been exploiting a flood of money competing for little new paper, until tapering talk caused a sharp pullback. Yields are still attractive, but investors will now be taking a closer look at, and be more demanding of, developing nations before committing their dollars.

Leaders and laggards

Sub-Saharan Africa has always been a region comprising tortoises and hares – strongly performing economies boosted by stable politics versus poorly managed economies virtually going backwards – with the roles often changing. The challenge for today’s hares is to ensure roles do not reset once again due to a lack of project investment.

Special Report

Special Report

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