According to recent reports, the issuing of bonds in Africa is on the rise to help countries on the continent finance their infrastructure spending. Financing infrastructure projects in the energy, roads and railways and social sectors, was the key reason behind three most recent issuances by Zambia, Namibia and Senegal.
Debt issuance by African economies accounts for $90 billion annually, with Moody's speculating that Angola, Kenya, Rwanda, Tanzania, Uganda and Mozambique will also follow the trend by issuing inaugural bonds on the international markets in the next few years. As such, the need for development finance has become crucial in unlocking investment opportunities throughout the continent.
"The need for development finance in Africa is huge, and will continue to grow, mirroring the need for infrastructure development, micro-finance, small business finance and project development," says Professor Meshach Aziakpono, head of M.Phil. and Ph.D. in Finance Development at the University of Stellenbosch Business School.
Healthy growth is expected
He says that it is expected that by 2015 the countries that will show the highest GDP growth are, among others, Egypt, Angola, Nigeria and South Africa, all with an expected growth rate of between 4% and 6%. In sub-Saharan Africa, economies are poised to experience a huge economic boost between now and 2020. Moody's also recently stated that there is significant potential in Africa for the increased use of international capital market finance.
Prof. Aziakpono says that there is a huge shortage of qualified professionals in development finance in Africa. "Most of the practice and training regarding development finance does not focus on Africa, but rather the rest of the world. When these programmes are implemented in Africa, they fail, as the project scope does not adequately deal with the continent's unique challenges and solutions."
The University of Stellenbosch Business School recently announced the launch of its Ph.D. in Development Finance, the first of its kind on African soil, to address the need for African-trained development finance professionals. "We realised that there is a huge gap currently for highly qualified people that can do advanced research and fulfil senior positions in development finance organisations such as the Development Bank of Southern Africa (DBSA) and the World Bank.
Unique component to programme
"There are too few people on this continent qualified to fill this gap. Yet, we cannot afford to hire-in individuals from abroad, as they have had limited exposure to the context of Africa. We realised that it is better to develop the skills needed for this continent, on this continent."
The Ph.D. programme has a unique 'taught' component to it, as the first two years are spent in class, with teachings by lecturers, while the last year of the study is spent on research. Aziakpono says the structure of the new Ph.D. follows the trend in America, Europe and soon to be Australia, of a discipline-based knowledge approach.
"We want graduates to have a comprehensive knowledge overview of their chosen discipline and become exposed to the debates and theories on that study. This means they will specialise in a specific discipline, rather than just one topic within that field of study," concludes Prof. Aziakpono.