African Fixed Income Guidebook-Interview with Bank Group Treasurer, Pierre Van Petheghem
"The publication of a guide with relevant information on the status of financial markets in Africa should also be considered as a contribution to the development of the financial markets of member countries, but in an indirect way", said the AfDB Treasury, Pierre Van Petheghem, following the publication of a guide entitled: "Africa Fixed Income Guidebook".
Question: Mr. Treasurer, why have you written a guide with information on the status of financial markets in Africa?
Answer: One of the priority missions of the Bank is to develop capital markets in its regional member countries. There are several ways of doing so. Indeed, the Bank contributes directly to the development of these markets by issuing bonds in African currencies. In this regard, I would like to remind you that the Bank has already issued bonds in the following African currencies: the South-African Rand, the Botswana Pula Botswana, the Tanzanian Shilling, the Ghanaian Cedi, the Nigerian Naira and the Kenyan Shilling. This is a direct way of drawing the attention of international investors to African domestic markets. The publication of a guide with relevant information on the status of financial markets in Africa should also be considered as a contribution to the development of the financial markets of member countries, but in an indirect way. Indeed, given the demand for financing in local currencies and the level of development of the various markets, the Bank cannot issue bonds in all African countries. However, this guide covers all markets on the continent. It puts together information on the various financing and risk management instruments on these markets, along with information on each country’s financial and fiscal regulatory framework. In short, the purpose of this guide is to present the status of capital markets in all African countries so as to scale up the interest of international and domestic investors in operational opportunities on the markets.
Question: And what is peculiar about this guide, given that similar guides have already been published?
Answer: The peculiarity of this guide lies in the Bank’s privileged position on the financial scene in the world in general, and in Africa, in particular. Because of its activities, the Bank is in regular contact with all the regulatory organs (Ministries of Finance and central banks) of regional member countries. It also has working relations with all major banks on the continent. This unique position makes it possible for the Bank to gather information, which is not easily available to other key players (at least collectively) in African capital markets. The comments we have received so far show that we have filled a gap.
Question: For whom is the guide designed?
Answer: The guide is intended for any person looking for information on African capital markets. For each country, the reader is given an overview of the financial system, as well as information on the fixed income financial instruments market, the foreign exchange market, the derivatives market and the importance of foreign investor participation. In addition, the guide presents a list of key contacts in the financial sector.
Question: Considering that African bond markets are weak and that data are limited, was it easy to prepare the guide?
Answer: The main difficulty in preparing the guide was the fact that the local markets are weak and lack modern facilities. Our concern was to give a true picture of the current status of markets in each country. Data collection was fairly complicated because many countries do not yet have centralized data systems. In certain cases, we had to confirm the initial data by comparing with other sources.
Question: Who were the stakeholders?
Answer: The Bank worked with Central Banks, rating agencies and commercial banks in the countries involved.
Question: As we know, promoting the integration of the African financial markets into the world market is a long and exalting task. Will this initiative be sustained and carried out regularly?
Answer: The President of the Bank has congratulated the treasury on this initiative, and has urged us to work for the development of capital markets in Africa. The treasury is ready to take up the challenge, and will take appropriate measures to maintain the Bank’s excellent contribution to the development of capital markets in Africa.