The Economic Report on Africa 2012 has urged Africa leaders to seek “an innovative financial instrument to address structural weakness in resources mobilisation and finance-long gestation infrastructural projects.”
The report posits that most African countries infrastructural development is weaken by their inability to mobilise domestic resources and the inability to attract external fund apart from foreign aid flow.
“There is need for government to come up with capital raising instrument targeted at global investors who are willing to bear high currency and country risks in their quest for high return,” the report suggests.
The report says issuing bond on capital market is a way to improve economic growth in Africa but it sounds a warning that there may be risk if there is volatility in the global financial market.
It says that government can facilitate issuance of infrastructure and municipal bonds.
It also name Diaspora bond as a financial option that could fetch Africa about $5-10billion cosidering about 16 million Africans live in Diaspora.
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