Sub Saharan Africa S Risk Perception Premium In The Search Of Missing Factors

Policymakers from the sub-Saharan Africa (SSA) region often flag a mispricing of their sovereign debt presumably originating from a perception risk by international investors that lead to "unjustifiably" high borrowing costs. Against this background, this paper explores the extent to which a potential SSA premium exists in the financial markets following a broader two-fold approach. Firstly, using a sample of 1592 international primary sovereign fixed coupon bonds issued between 2003-2021 from Bond Radar by 89 countries, we find that SSA countries pay significantly higher coupon at issuance compared to their peers from other regions. Secondly, we assess whether there is any bias against SSA countries in the secondary market that would result in higher refinancing cost. Based on an unbalanced panel of quarterly data covering 107 countries over 1990 – 2022, we find that SSA countries pay higher refinancing costs in the secondary market. The paper further explores whether there are other factors overlooked by the literature that matter for the risk pricing by international investors. In that respect, we explore the sensitivity of spreads to some structural dimensions where SSA countries face acute challenges―the transparency of budget process, the importance of the informal sector, the level of financial development, and the quality of public institutions. The results show that the excess premium estimated for SSA countries vanishes when these structural factors are accounted for in the regressions.

Through a range of articles, this book explores the changing nature of risk in contemporary African societies. It provides a valuable addition to the current debate on the concept of risk, which has traditionally been skewed in favor of a European historical experience. The contributions illustrate that technological hazards, pollution, and climate change - as well as the introduction of new forms of insurance and the restructuring of civil society - are just some of the recent developments that invite us to be skeptical of prevailing notions of risk in the African context. The reader is encouraged to move away from focusing on the vulnerability of Africa as a pre-modern society to consider more localized and contemporary perspectives of risk. In exploring new ways of conceptualizing risk in Africa, the book addresses the challenge of making theoretical and methodological advances in risk research relevant to understanding the processes of social change on the continent. (Series: Articles on African Studies / Beitrage zur Afrikaforschung - Vol. 51)

Sustainable infrastructure development is vital for Africa s prosperity. And now is the time to begin the transformation. This volume is the culmination of an unprecedented effort to document, analyze, and interpret the full extent of the challenge in developing Sub-Saharan Africa s infrastructure sectors. As a result, it represents the most comprehensive reference currently available on infrastructure in the region. The book covers the five main economic infrastructure sectors information and communication technology, irrigation, power, transport, and water and sanitation. 'Africa s Infrastructure: A Time for Transformation' reflects the collaboration of a wide array of African regional institutions and development partners under the auspices of the Infrastructure Consortium for Africa. It presents the findings of the Africa Infrastructure Country Diagnostic (AICD), a project launched following a commitment in 2005 by the international community (after the G8 summit at Gleneagles, Scotland) to scale up financial support for infrastructure development in Africa. The lack of reliable information in this area made it difficult to evaluate the success of past interventions, prioritize current allocations, and provide benchmarks for measuring future progress, hence the need for the AICD. Africa s infrastructure sectors lag well behind those of the rest of the world, and the gap is widening. Some of the main policy-relevant findings highlighted in the book include the following: infrastructure in the region is exceptionally expensive, with tariffs being many times higher than those found elsewhere. Inadequate and expensive infrastructure is retarding growth by 2 percentage points each year. Solving the problem will cost over US$90 billion per year, which is more than twice what is being spent in Africa today. However, money alone is not the answer. Prudent policies, wise management, and sound maintenance can improve efficiency, thereby stretching the infrastructure dollar. There is the potential to recover an additional US$17 billion a year from within the existing infrastructure resource envelope simply by improving efficiency. For example, improved revenue collection and utility management could generate US$3.3 billion per year. Regional power trade could reduce annual costs by US$2 billion. And deregulating the trucking industry could reduce freight costs by one-half. So, raising more funds without also tackling inefficiencies would be like pouring water into a leaking bucket. Finally, the power sector and fragile states represent particular challenges. Even if every efficiency in every infrastructure sector could be captured, a substantial funding gap of $31 billion a year would remain. Nevertheless, the African people and economies cannot wait any longer. Now is the time to begin the transformation to sustainable development.

This book focuses on Africa’s challenges, achievements, and failures over the past several centuries using an interdisciplinary approach that combines theory and fact and evidence-based practices and interventions in public health, and argues that most of the health problems in Africa are not a result of scarce or lack of resources, but of the misconceived and misplaced priorities that have left the continent behind every other on the globe in terms of health, education, and equitable distribution of opportunities and access to (quality) health as agreed by the United Nations member states at Alma-Ata in 1978.

The Covid-19 pandemic has aggravated the tension between large development needs in infrastructure and scarce public resources. To alleviate this tension and promote a strong and job-rich recovery from the crisis, Africa needs to mobilize more financing from and to the private sector.

Sub-Saharan African countries are facing an unprecedented health and economic crisis that is likely to severely hurt credit quality and raise non-performing loans from already high levels. Banks have a critical role to play not only during the crisis by providing temporarily relief to businesses and households, but also during the recovery by supporting economic activity and facilitating the structural transformations engaged by the pandemic.

This open access book analyses barriers and challenges associated with the financing of clean energy access in sub-Saharan Africa. By considering various economic, financial, political, environmental and social factors, it explores the consequences of energy poverty across the region and maps the real and perceived investment risks for potential capital providers, both domestic and international. Furthermore, it analyses risk mitigation strategies and innovative financing structures available to the public and private sectors, which are aimed at leveraging capital in the clean energy sector at scale and fostering the creation of an enabling business and investment environment. More specifically, the present book analyses how to (i) enhance capital allocation in projects and organisations that foster clean energy access in the region, (ii) mobilize private capital at scale and (iii) decrease the cost of financing through risk mitigation strategies. Going beyond traditional approaches, the book also considers socioeconomic and cultural aspects associated with investment barriers across the subcontinent. Moreover, it urges the public and private spheres to become more actively involved in tackling this pressing development issue, and provides policy recommendations for the public sector, including proposals for business model evolution at multilateral agencies and development institutions. It will appeal to a wide readership of both academics and professionals working in the energy industry, the financial sector and the political sphere, as well as to general readers interested in the ongoing debate about energy, sustainable development and finance.

The dry forests and woodlands of Sub-Saharan Africa are major ecosystems, with a broad range of strong economic and cultural incentives for keeping them intact. However, few people are aware of their importance, compared to tropical rainforests, despite them being home to more than half of the continent's population. This unique book brings together scientific knowledge on this topic from East, West, and Southern Africa and describes the relationships between forests, woodlands, people and their livelihoods. Dry forest is defined as vegetation dominated by woody plants, primarily trees, the canopy of which covers more than 10 per cent of the ground surface, occurring in climates with a dry season of three months or more. This broad definition - wider than those used by many authors - incorporates vegetation types commonly termed woodland, shrubland, thicket, savanna, wooded grassland, as well as dry forest in its strict sense. The book provides a comparative analysis of management experiences from the different geographic regions, emphasizing the need to balance the utilization of dry forests and woodland products between current and future human needs. Further, the book explores the techniques and strategies that can be deployed to improve the management of African dry forests and woodlands for the benefit of all, but more importantly, the communities that live off these vegetation formations. Thus, the book lays a foundation for improving the management of dry forests and woodlands for the wide range of products and services they provide.