Bond Market Development and Infrastructure Investment Gap: Lessons for the African Continent

Abstract

This paper, seeks to draw lessons for the African continent based on the experiences of three pioneer countries in bonds issuance for infrastructure financing. Theoretical foundation: The preferred habitat theory served as the study's lenses.it focuses on the bond market participants' choices for bonds as a financing option. Methodology: The authors conducted a systematic review of the literature using the SALSA framework, which is a search, appraisal, synthesis, and analysis framework. Findings; There is a pressing demand for bond market development in Africa. Developed and developing economies widely utilize bonds to bridge worldwide infrastructure investment gaps. Whereas some African nations have embraced them, there is still a lot to be done. Amongst others, is the need to familiarize with the various bonds available as a financing tool for infrastructure, the contribution of bond markets globally, the motivation for various bond market participants not disregarding the bond market processes and enablers. Practicability: This study solely employed a secondary literature analysis; other researchers can do the same investigation using different methods like the qualitative techniques that entail interviews or quantitative approaches. It also highlighted the bond processes and enablers based on the experiences of three countries that pioneered bond issuance. Further research can look at more or different countries for drawing lessons. Originality; This is the first article to present an overview of bonds, bond market participants, processes and enablers. As well as, the first paper to draw lessons for African countries based on the first-time experiences of Senegal, South Africa and United states of America.