Developing Local Currency Bond Markets for Long-term Development Financing in Sub-Saharan Africa

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Main author: Berensmann, Kathrin
Other authors: Dafe, Florence
Volz, Ulrich
Format: Journal Article           
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id eprints-20629
recordtype eprints
institution SOAS, University of London
collection SOAS Research Online
language English
language_search English
description This article discusses the role that local currency bond markets (LCBMs) can play in the long-term financing of sustainable development of Sub-Saharan African (SSA) economies and presents an empirical analysis of the factors which may hinder or promote the development of such markets in SSA. Using a new dataset for 27 SSA countries, our findings support earlier research on SSA and other regions, showing that LCBM development is related to country size, larger banking systems, greater trade openness and better regulatory frameworks and the rule of law. Foreign investor participation broadens the investor base and can give a boost to LCBM development, yet it may also increase volatility of international capital flows. Hence, with view to the experience of emerging economies in other regions, capital market liberalisation should be pursued only very cautiously and in pace with solid financial and institutional development.
format Journal Article
author Berensmann, Kathrin
author_facet Berensmann, Kathrin
Dafe, Florence
Volz, Ulrich
authorStr Berensmann, Kathrin
author_letter Berensmann, Kathrin
author2 Dafe, Florence
Volz, Ulrich
author2Str Dafe, Florence
Volz, Ulrich
title Developing Local Currency Bond Markets for Long-term Development Financing in Sub-Saharan Africa
publisher Oxford University Press
publishDate 2015
url https://eprints.soas.ac.uk/20629/

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