Strong bond market key to Africa’s development – Stanbic’s Head of Global Markets
The Head of Global Markets at Stanbic Bank Ghana, Afua Twumwaa Bulley, has emphasised the need for Africa, particularly the West African subregion, to establish a resilient bond market to address its growing developmental and fiscal challenges.
Speaking at the West Africa Bond Market Conference during a panel discussion on the theme “Building the Architecture for a Resilient Bond Market – Settlement, Clearing, Regulation, and Best Practice,” Mrs Bulley noted that the region continues to grapple with high debt levels, limited fiscal capacity, and significant infrastructural demands. These dynamics, she said, have necessitated a rethinking of how countries mobilise financing for development.
“The subregion faces peculiar macroeconomic dynamics and challenges. These include high debt levels, constrained fiscal space, and substantial developmental needs. Often, in seeking to meet these demands, we resort to short-term borrowing, which is both expensive and unsustainable,” she explained.
According to her, the current financing models, particularly the overreliance on short-term domestic borrowing and external debt, not only escalate debt servicing costs but also expose local currencies to significant volatility.
“Typically, we borrow short-term from commercial banks at high costs or raise funds externally, which puts pressure on our currencies. This cycle is not sustainable. It is critical that the subregion finds an alternative – and in my view, the most viable alternative is the development of a resilient bond market,” Mrs Bulley added.
The Stanbic Bank executive argued that a robust and well-regulated bond market would provide governments with access to long-term, affordable capital to fund infrastructure and other critical sectors. Over the past decade, several West African countries have undertaken pension reforms, creating a growing pool of long-term funds. These funds need suitable vehicles for deployment, and a resilient bond market offers the ideal avenue for channelling them into productive, development-focused investments.
Beyond sovereign borrowing, she highlighted the transformative potential of bonds for the private sector.
“A well-developed bond market doesn’t only benefit governments. It also provides the private sector with access to long-term capital, fostering entrepreneurship and job creation, which are essential for economic growth,” she noted.
She further added that deepening bond markets across the continent would not only support macroeconomic stability but also reduce the region’s dependence on external aid and volatile commodity revenues.
“If we’re able to get this right and accelerate reforms in the right direction, this sets the tone for the subregion to gradually reduce its reliance on external funding and shield itself from global market shocks,” Mrs Bulley stated.
The West Africa Bond Market Conference is a premier industry event jointly hosted by the Ghana Stock Exchange and the International Capital Market Association (ICMA). This high-level gathering convenes senior market participants, including policymakers, regulators, central banks, financial institutions, and market infrastructure providers, to engage in in-depth discussions on the current state and future direction of West Africa’s bond markets. The conference serves as a critical platform for knowledge exchange, regional collaboration, and the promotion of deeper, more integrated capital markets across the subregion.