The African Development Bank (AfDB) has added Zambia and Ghana to its African Bond Index (ABI), expanding the index to the eight most liquid sovereign bond markets in Africa.
The ABI provides investors with a tool with which to measure and track the performance of Africa’s bond markets.
The composite index now comprises South Africa, Egypt, Nigeria, Kenya, Botswana and Namibia local currency sovereign indices, with Ghana and Zambia joining this month.
“More African countries are increasingly looking to domestic capital markets to source much-needed financing for economic development. We expect to include more countries to [the ABI] as soon as reliable pricing information is made available,” said AfDB financial sector development director Stefan Nalletamby.
The ABI is managed in collaboration with the African Financial Markets Initiative, which works to deepen the continent’s local currency bond markets, while creating an environment where African countries can access financing at variable terms.
Meanwhile, in December, the AfDB approved the creation of the first African multijurisdictional fixed-income enhanced exchange-traded fund – the African Domestic Bond Fund (ADBF) – which will track the performance of the ABI. The ADBF is expected to be launched in September.