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A trend analysis of Eurobond yields in Africa

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  • Misheck Mutize

Abstract

This study applies econometric forecasting methods to estimate the trend of Eurobond yields in eight African countries over the period from January 2010 to May 2020. Results of the analyses show that the majority of countries' bond yields are forecasted to be on an upward trend. This implies that if African countries do not act to address the rising interest burden, they are at risk of falling into debt trap. This study thus recommends that countries should design their own yield curves and be more determinant in the amount of interest they should pay on Eurobond bonds. In addition, they should leverage on the high demand of African Eurobonds to bargain for competitive yields, improve the integrity and transparency in managing Eurobond proceeds to establish lines of accountability.

Suggested Citation

  • Misheck Mutize, 2022. "A trend analysis of Eurobond yields in Africa," International Journal of Monetary Economics and Finance, Inderscience Enterprises Ltd, vol. 15(1), pages 19-34.
    • Handle: RePEc:ids:ijmefi:v:15:y:2022:i:1:p:19-34
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    References listed on IDEAS

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    1. Christian Senga & Danny Cassimon & Dennis Essers, 2018. "Sub-Saharan African Eurobond yields: What really matters beyond global factors?," Review of Development Finance Journal, Chartered Institute of Development Finance, vol. 8(1), pages 49-62.
    2. Guduza, Sinazo & Phiri, Andrew, 2017. "Efficient Market Hypothesis: Evidence from the JSE equity and bond markets," MPRA Paper 83487, University Library of Munich, Germany.
    3. Farmer, Roger E. A., 2014. "How the Economy Works: Confidence, Crashes and Self-Fulfilling Prophecies," OUP Catalogue, Oxford University Press, number 9780199360307, Decembrie.
    4. Olusegun Ayodele Akanbi, 2016. "External debt accumulation in sub-Saharan African countries: how fast is safe?," International Journal of Sustainable Economy, Inderscience Enterprises Ltd, vol. 8(2), pages 93-110.
    5. Carlos Fonseca Marinheiro, 2011. "Fiscal sustainability and the accuracy of macroeconomic forecasts: Do supranational forecasts rather than government forecasts make a difference?," International Journal of Sustainable Economy, Inderscience Enterprises Ltd, vol. 3(2), pages 185-209.
    6. Misheck Mutize & McBride M. Nkhalamba, 2020. "The impact of sovereign credit rating changes on government bond yields in South Africa," International Journal of Sustainable Economy, Inderscience Enterprises Ltd, vol. 12(1), pages 81-100.
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