What Determines Bond Market Development in Sub-Saharan Africa?.
Material type: TextSeries: IMF Working PapersPublisher: Washington : International Monetary Fund, 2009Copyright date: ©2009Description: 1 online resource (34 pages)Content type: text Media type: computer Carrier type: online resourceISBN: 9781452740980Subject(s): Bond market -- Africa, Sub-Saharan -- Econometric models | Capital market -- Africa, Sub-Saharan -- Econometric models | Economic development -- Africa, Sub-Saharan -- Econometric modelsGenre/Form: Electronic books.Additional physical formats: Print version:: What Determines Bond Market Development in Sub-Saharan Africa?DDC classification: 332.67 | 332.673096 LOC classification: HG5822 -- .A345 2009ebOnline resources: Click to ViewIntro -- Contents -- I. Introduction -- II. Debt Markets in sub-Saharan Africa: An Overview -- III. Macroeconomic and Financial Issues in the Development of Debt Markets in sub-Saharan Africa -- IV. The Role of Institutional Investors in Bond Market Development -- V. Is Government Debt Market Crowding Out the Corporated Debt Market? -- VI. What Drives Bond Market Development in sub-Saharan Africa? -- A. Methodology -- B. Empirical Analysis -- VII. Conclusions, Recommendations, and Policy Implications -- References -- Tables -- 1. Domestic and External Debts to GDP -- 2. Average Domestic Debt, 1990-08 -- 3. Cross-Country Comparison of Financial Systems -- 4. Financial Sector Depth and Domestic Depth, 2008 -- 5. Assets of Nonbank Institutional Investors -- 6. Overall Savings and Investment Balances in sub-Saharan Africa, 1991-08 -- Figures -- 1. Domestic and External Debt (1980-08) -- 2. Financial Sector Depth and Domestic Debt, 2008 -- 3. Ratio of M2 to GDP and Domestic Bonds as a Share of GDP -- 4. Stock Market Capitalization and Domestic Bonds as a Share of GDP -- 5. Private Savings and Domestic Debt as a Share of GDP -- Appendix -- I. Statistical Data -- Appendix Tables -- 7. Overall Savings and Investment Balances, 1991 -- 8. Current Account Balances, 1991-08 -- 9. Regression Results -- 10. Correlation of Explanatory Variables -- 11. Multivariate Analysis -- 12. Sensitivity Analysis.
This study empirically analyzes the determinants of bond market development in a cross section of 23 sub-Saharan African (SSA) countries between 1990 and 2008. It considers the stage of development and the size of the bond market, as well as the historical, structural, institutional and macroeconomic factors driving bond market development in SSA. The study finds that the savings constraint is a key impediment to domestic bond markets development as well as financial market deepening, as it results in a low level of financial intermediation by the banks. Overall, the results show that a confluence of factors matters for the development of domestic bond markets in SSA; these include structure of the economy, investment profile, law and order, size of the banking sector, the level of economic development, and various macroeconomic factors. Policy implications include increased efforts to strengthen the investment environment and the need for a regional approach to bond market development.
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