Why Africa pays the highest costs to borrow money
Citigroup’s Daniel Lebetkin has helped steer almost all of the $18 billion in international bond sales from Africa this year. From Nigeria to Kenya, he’s watched investors snap up debt at a blistering pace. One thing hasn’t changed: African nations pay more to borrow.“It’s certainly unfortunate,” says Lebetkin. “There’s just a structural difference in yields.”It’s a view shared widely among policymakers and investors, who point out that even as global interest rates fall and Africa’s markets mature, the region’s borrowing costs are still the highest in the world. Some argue it’s justified, given the track record of default in places like Ghana and Zambia, and the region’s turbulent politics and corruption scandals. Plus, African countries tend to be small and relatively new borrowers.
