Bond Markets in Africa

54 Pages Posted: 28 Feb 2013

See all articles by Yibin Mu

Yibin Mu

International Monetary Fund; Harvard University; World Bank

Peter Phelps

University of Cambridge

Janet Gale Stotsky

International Monetary Fund (IMF)

Date Written: January 2013


African bond markets have been steadily growing in recent years, but nonetheless remain undeveloped. African countries would benefit from greater access to financing and deeper financial markets. This paper compiles a unique set of data on corporate bond markets in Africa. It then applies an econometric model to analyze the key determinants of African government securities market and corporate bond market capitalization. Government securities market capitalization is directly related to better institutions and interest rate volatility, and inversely related to the fiscal balance, higher interest rate spreads, exchange rate volatility, and current and capital account openness. Corporate bond market capitalization is directly linked to economic size, the level of development of the economy and financial markets, better institutions, and interest rate volatility, and inversely related to higher interest rate spreads and current account openness. Policy implications follow.

Keywords: Africa, African bond markets, Bond markets, Corporate sector, Cross country analysis, Economic models, corporate bonds, government securities

JEL Classification: G00, G01, G23, G28, H60

Suggested Citation

Mu, Yibin and Phelps, Peter and Stotsky, Janet G., Bond Markets in Africa (January 2013). IMF Working Paper No. 13/12, Available at SSRN:

Yibin Mu (Contact Author)

International Monetary Fund ( email )

1700 19th Street, NW
Washington, DC 20431
United States

Harvard University ( email )

Cambridge, MA 02138
United States

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

Peter Phelps

University of Cambridge ( email )

Trinity Ln
Cambridge, CB2 1TN
United Kingdom

Janet G. Stotsky

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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