Angola, Kenya Among African Nations to Raise Debt, Moody’s Says

Six sub-Saharan African nations including Angola and Kenya may each raise at least $500 million in debut foreign bond sales in the “next few years” to fund infrastructure spending, Moody’s Investors Service said.

Rwanda, Tanzania, Uganda and Mozambique may also sell their first foreign-currency bonds, setting a benchmark yield for companies, including state-owned ones, that may want to borrow from overseas markets, Aurelien Mali, a senior analyst, wrote today in an e-mailed report.

“There is significant potential in Africa for the increased use of international capital market finance,” Mali said. “International debt issuance will likely be led by the region’s sovereigns, driven by the need to finance a portion of their infrastructure needs.”

Economies in sub-Saharan Africa excluding South Africa, have traditionally been more reliant on selling securities maturing in two years or less in domestic markets, which are often less liquid than developed ones, as well as sourcing donor aid, commercial bank loans and private credit, he said.

That’s changing as international bond sales over the past year by Namibia and Zambia, which were oversubscribed by five times and 20 times respectively, highlight that investors’ appetite for riskier, higher-yielding debt is rising, he said.

Even still, “funding via international debt securities, albeit growing, will likely remain a limited portion of gross capital inflows to the region,” Mali said.

Infrastructure Spending

Inadequate road networks, power generation and water supplies shave at least two percentage points off sub-Saharan Africa’s economic growth annually, according to the World Bank. Infrastructure development in the region requires an estimated $93 billion a year of investment to overcome capacity shortages, the Washington-based lender said on its website.

Thirteen of 54 countries in Africa have issued foreign- currency denominated debt on international markets, Mali said.

Overseas debt issuances from African nations have been hampered by the fact that some have no sovereign credit rating, are contending with political instability or lack the resources to go through the process, he said.

To contact the reporter on this story: Sarah McGregor in Nairobi at

To contact the editor responsible for this story: Nasreen Seria at

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