Tuesday 13 November 2018
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africanews - 8 days ago

Africa s bond markets need gov t support: experts

Ten years after African Development Bank (AfDB) launched an initiative to develop the financial markets sector on the continent, stakeholders have called for stronger political will in the pursuit of development financing. Reviewing the progress of the African Financial Markets Initiative (AFMI), at an event in Zambia last week, the director of financial sector development at AfDB, Stefan Nalletamby said the initiative could have been ‘more effective’. ‘‘I would have liked to have already seen several domestic bond markets much more developed and relevant to the local economies, but one has to be content with what one can achieve over a ten year period,’‘ said Nalletamby. Attracting investment Participants at the workshop on ‘Local Currency Bond Markets and Financial Sector Development’, organised in partnership with Zambia’s central bank, emphasised the need for government to mobilise domestic resources for development. ‘‘Clearly, governments need to realise that part of their funding the economy should be through domestic resource mobilisation, of which the bond markets can be a very strong player,’‘noted Nalletamby. “We are trying to create new funding options for innovation on the continent, which is crucial.” The Chief Bond Markets Expert and AFMI Coordinator , Cedric Mbeng Mezui highlighted the progress made by AFMI to provide updated information on African local currency bond markets. “Currently, we have in place the first platform for providing reliable data for Africa. The major issue for investors overseas, even in Africa is to access credible data, and AFMI has provided data for 43 countries on the continent,’‘ said Mezui. Mezui also noted that AFMI in partnership with Bloomberg, had developed ‘an index bond that provides the benchmark for the performance of the African bond market’. ‘‘This initiative has been able to help us quantify performance, be able to measure performance and basically bring the African local currency market to be at par with others that have an index,’‘ explained Abhimanyu Yadav, Head of Fixed Income Currencies, Mauritius Commercial Bank. The future Considering that so many African countries do not yet have sophisticated markets, Thapelo Tsheole ,Chairman of the committee of SADC Stock Exchanges CoSSE proposed one market for countries with small economies. ‘‘I think the ultimate goal is to get a much more developed market in Botswana and in certain countries, because there is a huge potential that these markets can actually achieve,’‘ he said. The Zambian finance minister, Margaret Mwanakatwe, also expressed her aspirations for more Africans investing in bond markets. ‘‘I see that, 10 years from now, becoming the natural thing to do, where you can invest in the bond market, not just in your country, but the ability to do it internationally as a retailer.” #DidYouKnow the Bank has the most credible and knowledgeable data platform on bond markets in #Africa, the afmi_afdb? Users include mostly private sector as well as development institutions.
Interested? ??https://t.co/z3AN9Zg84J pic.twitter.com/4KoIkTniOG African Development Bank Group (AfDB_Group) July 11, 2018

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