Sovereign bonds attract investors, offer opportunities but also pitfalls

Sovereign bond markets have been widely promoted as one among several solutions for sub-Saharan African (SSA) economies to diversify and deepen their sources of financing. An important new study by Judith Tyson of the UK’s Overseas Development Institute (ODI)* observes that, since the 2008 global financial crisis, SSA (excluding South Africa) has provided a boom market for the investment banks that run loan books and investors looking to higher yield options than the instruments offered in depressed, record-low-interest western economies.