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Economic Brief - Diaspora Bonds: Some Lessons for African Countries
This economic brief draws out lessons from the most publicized Diaspora bond issuances globally – that of Israel, India and Ethiopia with the aim of exploring their applicability to the African context. It intends to provide insight to potential African issuers on what aspects to ponder prior to issuance. This economic brief concludes that Diaspora bonds are an important fundraising vehicle but that critical to their success in Africa are both soft and hard factors: intensive marketing based on disaggregated data on the Diaspora and credit enhancement to entice investors and reduce risk perception. In this regard, development finance institutions such as the African Development Bank have a critical role to play in providing statistical data, advisory services and risk mitigating financial instruments to help African countries realize their aspirations to issue.