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ISSN 0378-651X © OECD 2007
Government Debt Management and Bond Markets
in Africa
Hans Blommestein and Greg Horman
This article presents highlights from the forthcoming OECD cross-country
study Public Debt Management and Bond Markets in Africa.
Debt managers from an increasing number of emerging market jurisdictions
face challenges similar to those of their counterparts from advanced
markets due to competitive pressures from global finance and the related
need to implement OECD leading practices in this policy area. The article
shows that OECD standards in public debt management and related market
operations are, therefore, of great importance for public debt management
and bond market development in Africa. Several African debt managers
have introduced the leading debt management practices of OECD countries,
use them for designing new debt strategies (including for managing
contingent liabilities), and have made impressive progress in developing
their local government securities markets. Many countries in the region are
taking advantage of debt reduction initiatives. Avoiding falling back into
positions of unsustainable debt is identified as a key challenge for many
African governments.
OECD financial policy makers are increasingly interested in developments
in emerging markets, including those on the African continent. Moreover,
emerging markets (including the latest emerging market region, Africa) are
an increasingly important asset class for investors from the OECD area.
Thus, the policy conclusions and priorities identified here are of interest to
not only African countries but also the OECD area and other emerging
market countries. Local bond markets in several African countries have
gained in strength in terms of liquidity and maturity structure, making them
more attractive for important categories of OECD investors and less
vulnerable to exchange rate shocks.