Business in Ghana

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Archive for September 9th, 2014

Spending Like There is a Tomorrow

Posted by Business in Ghana on September 9, 2014

By Sri Mulyani Indrawati

In June, Kenya set a new African record.  At $ 2 billion, the country’s sovereign bond debut was four times oversubscribed. Only one month later, Senegal broke this high. Zambia and Cote d’Ivoire have been similarly successful in what some call an African bond bonanza.

Interest rates in traditional markets are so low that investors are going after sub-Saharan debt for its high return rates averaging between 5.5 and 7.5 percent. But they are also attracted by the continent’s promising growth rates, its economic stability, rising exports, and growing private investment.

This is a good thing.

To sustain growth and fight poverty, Africa needs to ramp up investment, particularly to generate more electricity given that 600 million Africans have no access to power. The infrastructure investment gap, estimated to be around $75 billion per year, can be narrowed by, among other measures, raising debt. Read the rest of this entry »

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