Sub-Saharan Africa returns to financial markets after two years

Financial ratings agency Standard & Poor’s (S&P) says Ivory Coast’s debt issuance, the region’s first in two years, paves the way for other countries in sub-Saharan Africa.

“While Côte d’Ivoire’s $2.6 billion (€2.3 billion) debt issuance comes as financing conditions remain restrictive, purchase orders have reached a country record of more than $8.0 billion (7. 3 billion euros); in our opinion, “This shows that investors continue to have an appetite for the country’s debt, even if at a higher price,” say analysts at this rating agency.

In a commentary on Ivory Coast’s debt issuance last week with interest rates of around 8% a year, S&P said the return to markets “could pave the way for other Eurobond issuances in the region.”

Conditions, however, may vary as “investors will differentiate between different emerging markets based on their economic performance and economic outlook, fiscal consolidation outlook, and how they have implemented economic reform plans and donor relations.” , they admit.

The issue, made by Côte d’Ivoire, one of the most developed financial markets in sub-Saharan Africa, consisted of two tranches, one for $1.1 billion, about one billion euros, with a maturity of nine years and an interest rate of 7.875 . %, and another $1.5 billion, equivalent to €1.3 billion, with a maturity of 13 years and an annual interest rate of 8.5%, S&P notes.

The government will use most of these funds to finance the development of projects under the country’s sustainable development framework in areas such as infrastructure and basic services, employment, renewable energy and pollution control, and energy management. S&P comment.

High interest rates charged to African countries, which are perceived as riskier loans, have in recent years prevented countries in the region from using international financial markets to take on debt and finance economic development.