After the global financial and economic crisis of 2008, there has been a substantial increase in
sovereign bond issuance in Sub Saharan Africa. The total value of bonds issued increased by
over 620% from $1 billion in 2011 to $6.2 billion in 2014. Steady global market conditions and
the potential for higher returns for investors have helped pave the way for more access to international markets, where the average return for these bond issuances is about 6.6%, with
an average maturity of 10 years. These bonds have contributed to 147% increase in external
debt stock for Sub Saharan Africa between 2010 and 2015. The total debt stock increased from
US$282.9 billion to US$416.3 billion respectively. While additional resources from the issuance of
bonds go a long way in providing sovereigns with the additional resources for development,
they will have negative implications on the economic development of the debtor country
if not managed properly. The focus of this policy brief is on how bond issuance has contributed
to an increase in debt external debt levels and what lessons can be learnt as result bond
issuance experiences.
