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Localising Sovereign Debt: The Rise of Local Currency Bond Markets in Sub-Saharan Africa

Dafe, F., Essers, D. & Volz, U. (2017). Localising Sovereign Debt: The Rise of Local Currency Bond Markets in Sub-Saharan Africa (202). London, UK: SOAS University of London.


This paper analyses the development of local currency sovereign bond markets (LCBMs), a potentially important but often overlooked source of longer-term public finance, in Sub-Saharan Africa (SSA). We construct a novel dataset comprising 28 SSA countries for the period 2000-2014 to identify the main correlates of LCBM capitalization, of local currency bond (LCB) tenors and of LCB issue yields. Our econometric analysis is complemented by case studies of Ghana, Kenya and Nigeria, where we further investigate the drivers of LCBM development and place LCBMs in a broader public debt context. We find that LCBMs have become important sources of financing in SSA but that new vulnerabilities emerge from the costs of domestic borrowing, short bond tenors and the composition of the investor base.

Publication Type: Monograph (Working Paper)
Additional Information: © Copyright is held by the author or authors of each working paper. SOAS Department of Economics Working Papers cannot be republished, reprinted or reproduced in any format without the written permission of the paper’s author or authors.
Publisher Keywords: Public debt; local currency bond markets; long-term finance; Sub-Saharan Africa.; Public debt; Local currency bond markets; Sub-Saharan Africa
Subjects: H Social Sciences > HB Economic Theory
Departments: School of Policy & Global Affairs > Economics
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