Title: Local Sources Of Financing For Infrastructure In Africa: A Cross-Country Analysis
Abstract: No AccessPolicy Research Working Papers22 Jun 2013Local Sources Of Financing For Infrastructure In Africa: A Cross-Country AnalysisAuthors/Editors: Jacqueline Irving, Astrid ManrothJacqueline Irving, Astrid Manrothhttps://doi.org/10.1596/1813-9450-4878SectionsAboutPDF (0.5 MB) ToolsAdd to favoritesDownload CitationsTrack Citations ShareFacebookTwitterLinked In Abstract:With the exception of South Africa, local financial markets in sub-Saharan Africa remain underdeveloped and small, with a particular dearth of financing with maturity terms commensurate with the medium- to long-term horizons of infrastructure projects. But as financial market reforms gather momentum, there is growing awareness of the need to tap local and regional sources. Drawing on a comprehensive new database constructed for the purpose of this research, the paper assesses the actual and potential role of local financial systems for 24 African countries in financing infrastructure. The paper concludes that further development and more appropriate regulation of local institutional investors would help them realize their potential as financing sources, for which they are better suited than local banks because their liabilities would better match the longer terms of infrastructure projects. There are clear signs of positive change: private pension providers are emerging in Africa, there is a shift from defined benefit toward defined contribution plans, and African institutional investors have begun taking a more diversified portfolio approach in asset allocation. Although capital markets remain underdeveloped, new issuers in infrastructure sectors-particularly of corporate bonds-are coming to market in several countries, in some cases constituting the debut issue. More than half of the corporate bonds listed at end-2006 on these countries' markets were by companies in infrastructure sectors. More cross-border listings and investment within the region-in both corporate bonds and equity issues-including by local institutional investors, could help overcome local capital markets' impediments and may hold significant promise for financing cross-country infrastructure projects. Previous bookNext book FiguresReferencesRecommendedDetailsCited ByExploring innovative energy infrastructure financing in Ghana: benefits, challenges and strategiesInternational Journal of Energy Sector Management, Vol.16, No.26 July 2021Financing long-term infrastructure post-COVID-19: is pension funds an option for Africa?Journal of Sustainable Finance & Investment, Vol.1115 March 2021The impact of socio-political and economic environments on private sector participation in energy infrastructure delivery in GhanaJournal of Engineering, Design and Technology, Vol.15, No.2Barriers to bond financing for public-private partnership infrastructure projects in emerging marketsJournal of Financial Management of Property and Construction, Vol.22, No.1Public Investment as a Driver of Economic Development and Growth: What Is the Appropriate Role of Public-Private Partnerships?Institutional Investment in Infrastructure in Emerging Markets and Developing EconomiesSSRN Electronic JournalInfrastructure in South Africa: Who is to finance and who is to pay?Development Southern Africa, Vol.27, No.2 View Published: April 2009 Copyright & Permissions Related RegionsAfricaRelated TopicsFinance and Financial Sector DevelopmentPrivate Sector DevelopmentTransport KeywordsBANK LENDINGCAPITAL MARKETSCENTRAL BANKSCORPORATE BONDSDIVERSIFIED PORTFOLIOEQUITY ISSUESEXPENDITUREEXTERNAL DEBTFINANCIAL MARKETFINANCIAL SYSTEMSINSTITUTIONAL INVESTORSINTERNATIONAL BANKINTERNATIONAL DEVELOPMENTLOCAL BANKSLOCAL FINANCIAL MARKETSMARKET REFORMSMATURITYPENSIONSECURITIESSECURITIES EXCHANGES PDF DownloadLoading ...