African Nations Continue to Tap International Capital Markets Despite Geopolitical Uncertainty

Despite concerns about the conflict in Iran impacting investor sentiment, African governments are successfully raising funds from international markets. Citibank reports a more than two-thirds increase in African sovereign bond deals this year, facilitating $6.2 billion in debt issuance—70% higher than the same period last year.

Emerging market analysts note that while food and energy prices have seen modest increases, these haven’t triggered broader inflationary pressures across consumption baskets. “Oil at $80 a barrel is an okay scenario for the majority of Africa,” with several countries benefiting as net oil exporters.

Recent issuances include Angola’s bond earlier this year, followed by deals from the Democratic Republic of Congo (DRC) and the Republic of Congo. This continued market access reflects improved economic fundamentals compared to previous shocks like post-COVID recovery and the Russia-Ukraine conflict.

Private Placements Gain Traction

Governments are increasingly utilizing private placements—direct sales to institutional investors that bypass public markets—to raise funds more quickly. The Republic of Congo recently raised $850 million through a private placement, earmarking proceeds for domestic debt refinancing, following a similar $700 million raise in February.

Angola also tapped Japan’s “samurai market” with a yen-denominated private placement last December, while Gabon and Cameroon have utilized similar approaches.

Favorable Market Conditions Support Access

The continent benefits from tight credit spreads globally, making African bonds more attractive to yield-seeking investors. Previously overlooked markets like Gabon and Cameroon are now receiving greater scrutiny as investors search for double-digit returns.

Improving foreign exchange reserves in countries like Ghana, Angola, Ivory Coast, and the DRC—with many showing current account surpluses—further support investor confidence.