Lagos — For bond investors, Africa has been a happy hunting ground this year. Its local-currency and dollar securities easily outperformed those of emerging markets overall as investors piled into a continent offering high yields and starting to recover from the commodity bust of three years ago. But risks abound, among them policy tightening in advanced economies, local and global politics, weakening currencies and another fall in oil prices. And then there is credit risk. This year, Mozambique and Republic of Congo missed Eurobond payments, while countries including Cameroon and Zambia agreed or began talks on bail-outs with the International Monetary Fund. And since Namibia and SA were downgraded to junk, the continent has been left without any investment-grade foreign-currency issuers. Christine Lagarde, for one, thinks Africa’s debt problems "could very well" worsen in 2018 as the dollar appreciates and the US raises interest rates, according to an interview with Quartz magazin...
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