African countries struggle to repay bonds over openness issues
Money raised from Rwanda’s dollar bond in 2013 was used to repay loans for construction of the Kigali Convention Centre. It is set to be completed early next year. Zambia and Rwanda have been transparent about the details of their bonds, how they were raised, the commissions earned, and the breakdown of how they were spent. PHOTO | DANIEL S NTWARI |
Three years ago, international investors were little concerned about the transparency of sovereign bonds, in favour of higher payouts. However, this is changing as countries find it difficult to issue bonds that are being considered risky due to transparency and accountability issues.
Some sub-Saharan African economies are struggling with rising interest repayments on their international bonds. Falling commodity and oil prices, as well as falling currencies, have led to higher repayments on their Eurobonds as investors demand transparency on their listings and spending of the proceeds.
