Eurobonds have become a cornerstone of Africa’s financial toolkit, funding essential infrastructure projects such as Kenya’s freeway system. However, their potential has been undermined in cases of poor governance, as demonstrated by the “tuna bond” scandal in Mozambique. To fully leverage the benefits of Eurobonds, governments should prioritise the establishment of robust governance frameworks and proactive engagement with investors to rebuild confidence. Clear accountability and consistent communication will ensure these instruments are used to support meaningful development.
The emergence of ESG-linked funding mechanisms is reshaping Africa’s sovereign debt landscape. Instruments like sustainability-linked bonds, social bonds and debt-for-nature swaps align financing with global environmental and social priorities, offering the dual benefits of expanding the investor base and addressing sustainability challenges. Initiatives such as the Seychelles blue bond demonstrate the promise of these tools. However, scaling their impact requires an expanded ESG-focused investor pool and strengthened collaboration between governments, multilateral institutions, and private sector stakeholders.
Multilateral development banks and development finance institutions remain indispensable in stabilising Africa’s debt ecosystem. Their involvement not only improves credibility but also mitigates risk perceptions and attracts broader investment opportunities. Successful examples, including Ghana’s ESLA bond and innovative special-purpose vehicle structures tied to energy revenues, highlight the transformative role these institutions play. By bridging the gap between public and private stakeholders, multilaterals are driving financial innovation and advancing Africa’s economic sustainability.
African banks are uniquely positioned to reshape debt strategies on the continent. Their understanding of local market dynamics equips them to craft solutions that address regional challenges effectively. By leveraging their expertise, these institutions can reduce risk premiums, promote responsible borrowing practices, and give the tools governments need to navigate complex financial landscapes.
Trust and transparency form the bedrock of any sustainable debt strategy. Governments should ensure that borrowed funds are used responsibly and produce tangible benefits for citizens. Regular engagement with international investors, through roadshows and ongoing updates, helps to counter misconceptions and highlight the diversity of economic opportunities within Africa. SA’s proactive engagement with stakeholders provides a strong example of how transparency can improve market access and borrowing conditions.
As the global financial community gathers for events like the recent Global Banking & Markets: Africa Bonds, Loans & ESG 2025 Conference, the focus must shift towards actionable solutions that drive progress. By embedding sustainability, prioritising collaboration, and encouraging innovation, Africa can move beyond short-term remedies and lay the groundwork for a resilient financial future that drives progress and development.
This article was sponsored by Nedbank Corporate and Investment Banking.
