There was a time when an invitation to invest in the Nigerian naira would have sent shivers down the spine of even the most adventurous emerging markets fund manager. But not today. In January, investors on both sides of the Atlantic were more than happy to snap up N12.78bn ($100m) in one-year bonds issued by the African Development Bank (AfDB).
Most African countries have never had their own capital markets, but there are reasons why that could, and should, change. An ability to tap domestic markets in local currencies would benefit a growing African private sector as well as public funding on the continent. Insulation from foreign exchange movements could bring considerable advantages at both macro and micro levels.
