The World Bank revealed that over $17 billion was raised by bond issuances in 2018 from Nigeria, Kenya, Côte d’Ivoire, and other sub-Saharan African countries, a feat described as a landmark development.
The information, which was published in a report titled “Africa Pulse”, produced by the office of the Chief Economist for the African Region at the World Bank, was recently released during the World Bank‘s joint spring meeting with the International Monetary Fund (IMF) in Washington DC.
The global development bank and IMF noted that over $17 billion had been raised from bonds by Sub-Saharan African countries, but warned the countries to be mindful of their increasing debt vulnerabilities.
According to the World Bank, 2018 marked a record year for international bond issuances in Sub-Saharan Africa. Between 2013 and 2017, countries in the region (excluding upper-middle-income countries) issued, on average, a total of $4.5 billion per year, with an average issuance size of $1 billion.
In addition to the increase in issuance volumes, several countries (including Nigeria, Côte d’Ivoire, and Kenya) were able to extend maturities to 30 years.
In November 2018, Nigeria said it received a combined offer of over $9.5 billion for its $2.86 billion Eurobond. The bond represents Nigeria’s sixth Eurobond issuance, following issuances in 2011, 2013, two in 2017 and one in early 2018 and its first triple-tranche offering.
In addition, the Ministry of Finance noted that the offer comprised of $1.18 billion seven-year series, $1 billion 12-year series and a $750 million 30-year series. It also mentioned that the Government intends to use the proceeds of the bond to fund its fiscal deficit and other financing needs.
The Governor of the Central Bank of Nigeria, Godwin Emefiele said the country attracted bonds worth $6 billion after the elections, a sign that the Nigerian bond market remains attractive to investors.
He further added that Nigeria’s bond has continued to top the chart due to the stability of the Investors and Exporters’ FX Window rate and the yields being high by emerging-market standards.