Authors
Paul Mukoki, Kalu Ojah, Odongo Kodongo
Publication date
2023/6/1
Journal
African Finance Journal
Volume
25
Issue
1
Pages
1-25
Publisher
AfricaGrowth Institute
Description
Among other factors, a key prerequisite for enabling public debt markets to support infrastructure financing is a robust market liquidity. We deploy a combination of nonparametric and parametric techniques to analyze a newly assembled primary dataset from eight of the most viable national bond markets in Sub-Saharan Africa (SSA), to ascertain their liquidity status for possibly enabling financing of infrastructures. Whilst 4 of these markets are deemed relatively liquid, 3-4 are assessed to be of low liquidity, with the sovereign bond markets unsurprisingly perceived to be more liquid than the corporate bond markets. Only the South African and Nigerian corporate bond markets are deemed to be currently capable of rallying private sector capital for possible infrastructure financing. Key impediments against bond market liquidity in SSA are irregular issuances of bonds, lack of bond primary dealers, narrow investor base …
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