The African Development Bank (AfDB) has announced the addition of Morocco and Mauritius to its Bloomberg African Bond Indices (ABABI), marking “a steady progress in the Bank’s efforts to deepen the continent’s local currency bond market.”
The African Development Bank administers the ABABI, a family of African bond indices launched in February 2015 and calculated by the independent, global index provider Bloomberg.
“This is a positive development as the inclusion of Mauritius and Morocco, two of Africa’s better-rated issuers, will improve the overall credit quality of the ABABI, which now captures close to 90% of the outstanding amount of African sovereign local currency bonds,” said Stefan Nalletamby, Director of the Bank’s Financial Sector Development Department.
Nalletamby noted that in the current environment, the ABABI indices are a reliable tool for international investors to measure and track African sovereign bond markets.
“This will be even more relevant following the COVID-19 crisis as sovereign debt managers, who will need to further diversify their local currency funding instruments, will also need to adjust their strategies, enhance transparency and widen their fixed income investor base, given the increased financing needs of the economies,” he said.
The African Development Bank works to deepen the continent’s local currency bond markets and create an environment where African countries can access long-term financing.
The Bank said it will work in close collaboration with the US Group Bloomberg to provide investors with transparent and credible benchmark indices. This will provide a tool to better measure and track the performance of Africa’s bond markets.
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