The African Development Bank (AfDB) has announced the addition of Morocco and Mauritius to its Bloomberg African Bond (ABABI) indexes, which marks, according to the Bank, a “steady progression in the Bank's efforts to deepen the continent's local currency bond market.”

The African Development Bank administers ABABI, a family of African bond indices launched in February 2015 and calculated by the independent global index provider Bloomberg

“This is a positive development because the inclusion of Mauritius and Morocco, two of the highest-rated African issuers, will improve the overall credit quality of ABABI, which now captures nearly 90% of outstanding African sovereign bonds in local currency,” said Stefan Nalletamby, Director of the Bank's Financial Sector Development Department.

Stefan Nalletamby noted that in the current environment, ABABI indices are a reliable tool for international investors to measure and monitor African sovereign bond markets.

“This will be even more relevant after the Covid-19 crisis because sovereign debt managers, who will need to further diversify their local currency funding instruments, will also need to adjust their strategies, improve transparency and broaden their bond investor base, given the increasing financing needs of economies,” he added.

The pan-African financial institution explained that it is working to deepen the continent's local currency bond markets. It will thus create an environment in which African countries can access long-term financing.

The bank stressed that it will work closely with the American financial group, Bloomberg, to provide investors with transparent and credible benchmarks. This will, she points out, make it possible to have a tool to better measure and monitor the performance of African bond markets