Over the last decade, private capital investors have focused almost exclusively on the developed world, particularly the US. As these markets become increasingly saturated with capital, leading to falling lending standards and returns, it is time for private investors to look further afield. One region which has been overlooked by private credit allocators is Sub-Saharan Africa, a vast region of 48 countries which has a host of positive tailwinds that we believe make it an exciting proposition.
The Rise of Sub-Saharan Africa
Sub-Saharan Africa appeared on the radar screen of international investors in the early-2010s, when countries in the region started to issue Eurobonds in earnest. The path of increasing access to international capital markets has also been paved by credit rating agencies’ expanded focus on Africa, with the United Nations Development Programme (UNDP) partnering with S&P in 2003 “to fund the agency’s rating activity of African sovereign borrowers and provide technical country support”.
Today, just over 30 SSA nations are rated by at least one of the big three rating agencies (S&P, Moody’s and Fitch), compared to only one country in the years before 2000 (South Africa).
At the same time, though, SSA still only makes up for less than 10% of J.P. Morgan’s EMBIGD Index of Emerging Markets US dollar (USD) bonds, compared to around 34% for Latin America (Latam). While those ratios roughly align with the relative size of the two regions’ economies, SSA’s population is around twice the size of Latam, highlighting the need for increased international capital to boost Gross Domestic Product (GDP) per capita and welfare.
You can now read the full whitepaper at the link below
Supporting documents
Click link to download and view these filesSub Saharan Africa: The Resurgence
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