African Countries and Eurobond Market: The Lovefest Continues in 2020?


Friday, February 14, 2020 / 4:33 PM / United Capital Research / Header Image Credit: Business Day Ghana


According to recent media reports, Nigeria and Benin are set to follow in the footsteps of Ghana ($3.0bn) and Gabon ($1.0bn) to raise dollar-denominated debts at the international debt capital market in 2020. This was evidenced by the strong demand for Ghana's recent Eurobond issue with subscription rate at 5x the offer (issued in three tranches; $1.25bn of 6-year at 6.4%, $1.0bn of 14year at 7.9% and $0.75bn of 41-year at 8.8%) at an average coupon rate of 7.7%.


With increasing level of monetary policy easing in the advanced markets, more Eurobond issuance in by African economies creates an outlet for international investors' rising appetite for high-yielding emerging and frontier market debt issues, especially in riskier market such as in Sub-Saharan Africa (SSA).


However, concerns remain around the debt sustainability of Africa's rising indebtedness to foreign investors. Accordingly, the International Monetary Fund (IMF) has warned African governments that the rapid buildup of commercial debt makes them vulnerable to the whims of international investors. In our view, we note that the increased magnitude of market-based lending has a higher risk content, as captured by greater vulnerability to commodity prices, global interest rates, and currency movements. To allay this fears, SSA economies must implement bold reforms, diversity their economies and build resilience to these risks over the medium to long term.


Top African Stories

  • Ghana's inflation in January slows to 7.8 percent on stable local currency: The year-on-year inflation rate in Ghana slowed to 7.8 percent in January, compared with the 7.9 percent recorded last December, with the Ghana Statistical Service attributing the situation to a stable exchange rate regime. Read More

  • Nigeria offers longer-term naira contracts to lure investors, shore up FX reserves: Nigeria's central bank has introduced longer-term contracts on the naira in a move to attract more foreign inflows, shore up its dwindling dollar reserves and prevent the currency from weakening, traders said on Thursday. Read More

  • South African Airways May Sell Heathrow Slots to Raise Cash: South African Airways may sell its two prized nighttime operating slots at London's Heathrow Airport as the state-owned carrier battles to stave off financial collapse, according to people familiar with the situation. Read More

  • Egypt approves first gold mining licence in more than a decade: Egypt has approved a mining licence for Aton Resources Inc, the Canadabased gold miner said on Thursday, the first such award since the country's main gold producer Centamin secured a licence more than a decade ago. Read More

  • South Africa takes over as AU chair: What to expect: The African Union (AU) has wrapped up its annual summit, with leaders pledging that the 55member bloc will play a greater role in resolving protracted conflicts and work to unlock the continent's economic potential. Read More

  • AfDB Gives Uganda Shs3.7 Billion to Fight Ebola: The African Development Bank (AfDB) has released a $1 million (Shs3.7 billion) grant to Uganda to help the East African country tackle imminent outbreaks of the Ebola virus. Read More  


 Looking Forward



Q4-19 PPI YoY - Feb 15th



Jan 2020 M2  Money Supply YoY - Feb 15th

Jan 2020 Gross Reserves -  Feb15th

Jan 2020  PPI YoY - Feb19th 



Jan 2020 CPI YoY - Feb 21st



Jan 2020 CPI YoY - Feb 24th 

Q4-19 GDP YoY - Feb 17th


South Africa

Jan 2020 CPI YoY  - Feb 19th

Jan 2020 PPI  YoY - Feb 27th



Feb 2020 Bank of Zambia Policy rate - Feb 19th


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