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Dear colleagues,
Some of you may be interested to find out about our newly published analysis in this month's Review of Development Economics on the problems of the costs of borrowing in Sub-Saharan Africa. Here's a brief abstract with reference to the original article.

This study explores macroeconomic implications of the sovereign bond rush that has been taking place in sub-Saharan Africa since 2006. The focus is on the sub-Saharan sovereign bond yields as proxies for the region's ability to raise new funds on international markets. Despite the subcontinent's tour-de-force entrance to the international bond market, this paper reveals that recent (since early 2000s) borrowing in foreign currency is not without macroeconomic risk. Empirically this paper finds that sovereign bond yields are significantly influenced by global volatility, commodity prices and global liquidity—all factors that are out of the control of the sub-Saharan economies in question. These findings suggest that portfolio repositioning by institutional investors prompted by improved growth prospects and implicit monetary policy tightening in the advanced economies or heightened risk perceptions, are likely to result in increased borrowing costs for the sub-Saharan bond issuers and affect their ability to raise funds in international markets. Furthermore, a change in borrowing costs might lead to higher debt-service costs and policy uncertainty, which in turn could lead to suboptimal investment levels and, ultimately, hinder economic development.

Gevorkyan, A. V. and Kvangraven, I. H. 2016. Assessing Recent Determinants of Borrowing Costs in Sub-Saharan Africa. Review of Development Economics.  Vol. 20(4): 721-738. DOI:10.1111/rode.12195 http://onlinelibrary.wiley.com/doi/10.1111/rode.12195/abstract

Also, a blog version of the full article, offering some key highlights is available via Interfima.org: Gevorkyan, A. V. and Kvangraven, I. H. 2016. The Trouble with Sub-Saharan African Debt. https://goo.gl/fz6U9t
Your feedback and ideas on potential research collaboration on the problems of emerging markets development and financial deepening will be most welcome.
All the best, Aleksandr V. Gevorkyan, Ph.D.
 e: [log in to unmask] tw: @avgevorkyan
w: http://agevorkyan.com
 
New book:Gevorkyan, A.V. and O. Canuto (eds). 2016. Financial Deepening and Post-Crisis Development in Emerging Markets: Current Perils and Future Dawns. New York: Palgrave Macmillan. https://goo.gl/O1PY0e





   

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