African borrowers are regaining access to international capital markets
African countries are beginning to access international capital markets again after prolonged challenges.
Decreasing rates and narrowing sovereign spreads have contributed to this market accessibility.
European funds are increasingly flowing into Africa, surpassing U.S. investments in impact.
African governments and companies are beginning to regain access to international capital markets, offering a renewed chance to diversify funding sources after years of being effectively shut out, according to Citigroup Inc.
'With rates coming down now, I think the markets are reopening to African issuers, namely the European markets,' said Miguel Azevedo, managing director and vice-chair of investment banking for the Middle East and Africa at Citigroup.
Azevedo pointed to Guaranty Trust Holding Co. of Nigeria's international share sale earlier this month, its first ever, as a sign of renewed investor interest. In a separate development, the Ivory Coast raised 50 billion yen ($338 million) last week through its debut Samurai bond issuance, Bloomberg reported.
The improving outlook for African borrowers is reflected in narrowing sovereign spreads. The premium investors demand to hold African dollar bonds over U.S. Treasuries has fallen to 429 basis points, its lowest since December, according to JPMorgan Chase & Co. indexes.
The spread has tightened by more than 200 basis points since April, when U.S. President Donald Trump's tariff announcements triggered market volatility.
Shift toward local trade
Azevedo also highlighted the growing flow of European funds into Africa relative to U.S. investments, calling it a potential 'blessing in disguise.' The trend, he said, is supporting economic diversification and enhancing intra-African trade.
'Forcing local trade I think it will be good for Africa,' he said. 'The world is becoming less global and it may actually help Africa. When you look at trade in Africa, it's all about how much you can do domestically these days.'
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