Beyond Aid : New Sources and Innovative Mechanisms for Financing Development in Sub-Saharan Africa

Given Sub-Saharan Africa's enormous resource needs for growth, poverty reduction, and other Millennium Development Goals, the development community has little choice but to continue to explore new sources of financing, innovative private-to-private sector solutions, and public-private partnerships to mobilize additional international financing. The paper suggests several new instruments for improving access to capital. An analysis of country creditworthiness suggests that many countries in the region may be more creditworthy than previously believed. Establishing sovereign rating benchmarks and credit enhancement through guarantee instruments provided by multilateral aid agencies would facilitate market access. Creative financial structuring, such as the International Financing Facility for Immunization, would help front-load aid commitments, although these may not result in additional financing in the long run. Preliminary estimates suggest that Sub-Saharan African countries can potentially raise USD 1-3 billion by reducing the cost of international migrant remittances, USD 5-10 billion by issuing diaspora bonds, and USD 17 billion by securitizing future remittances and other future receivables. African countries that have recently received debt relief however need to be cautious when resorting to market-based borrowing.

Bibliographic Details

Main Authors:	Mohapatra, Sanket, Ratha, Dilip, Plaza, Sonia
Language:	English
Published:	World Bank, Washington, DC 2008-04
Subjects:	ACCESS TO CAPITAL, ACCUMULATION OF DEBT, ASSET CLASS, ASYMMETRIC INFORMATION, BACKED SECURITIES, BALANCE OF PAYMENTS, BANK CREDIT, BANK GUARANTEES, BANK LENDING, BANK LOANS, BANKING CORPORATIONS, BANKING SYSTEM, BANKRUPTCY, BANKRUPTCY LAWS, BASIS POINT, BASIS POINTS, BOND BANK, BOND FINANCING, BOND FUND, BOND INDEX, BOND ISSUANCE, BOND ISSUE, BOND MARKETS, BONDHOLDERS, BONDS, BORROWER, BORROWING COSTS, BUY BACK, CAPITAL FLOWS, CAPITAL MARKET, CAPITAL MARKET ACTIVITIES, CAPITAL MARKETS, CAPITAL OUTFLOWS, CHECKS, COLLATERAL, COLLATERALIZATION, COMMERCIAL BANK, COMMERCIAL BANK LENDING, COMMERCIAL TERMS, COMMODITY PRICE, CONTINGENT LIABILITIES, CONTRACT ENFORCEMENT, CONTRACTUAL OBLIGATIONS, CORPORATE BONDS, COUPON, CREDIT AGENCIES, CREDIT CARD, CREDIT ENHANCEMENT, CREDIT GUARANTEES, CREDIT HISTORY, CREDIT RATING, CREDIT RATING AGENCIES, CREDIT RATINGS, CREDIT RISK, CREDIT RISKS, CREDITOR, CREDITOR RIGHTS, CREDITORS, CREDITWORTHINESS, CURRENCY, CURRENCY DEVALUATION, DEBT, DEBT FORGIVENESS, DEBT INSTRUMENT, DEBT ISSUERS, DEBT RELIEF, DEBT SOURCE, DEBT STOCK, DEBT STOCKS, DEBT-SERVICE, DEBTS, DEFAULT RATING, DERIVATIVE, DERIVATIVE INSTRUMENTS, DEVALUATION, DEVELOPING COUNTRIES, DEVELOPING COUNTRY, DEVELOPMENT BANK, DOMESTIC BANKS, EMERGING MARKET, EMERGING MARKET COUNTRIES, EMERGING MARKETS, EQUIPMENT, EQUITY FLOWS, EQUITY STAKES, EXPORTERS, EXTERNAL BORROWING, EXTERNAL FINANCE, EXTERNAL FINANCES, FINANCIAL CRISIS, FINANCIAL DEVELOPMENT, FINANCIAL FLOWS, FINANCIAL FUTURE, FINANCIAL INSTITUTIONS, FINANCIAL MARKETS, FINANCIAL STRUCTURES, FINANCIAL SUPPORT, FINANCIAL SYSTEM, FIXED INVESTMENTS, FOREIGN CURRENCY, FOREIGN CURRENCY DEBT, FOREIGN DIRECT INVESTMENT, FOREIGN EXCHANGE, FOREIGN INVESTORS, GLOBAL BANKING, GLOBAL DEBT, GLOBAL DEVELOPMENT FINANCE, GOVERNMENT DEBT, GROSS DOMESTIC PRODUCT, HOST COUNTRIES, HOST COUNTRY, IMMUNIZATION, INCOME DIFFERENTIALS, INFORMATION ASYMMETRIES, INFORMATIONAL ASYMMETRIES, INSURANCE, INSURANCE COMPANIES, INSURANCE MARKET, INTEREST RATE, INTEREST RATE SPREAD, INTEREST RATES, INTERNATIONAL BANK, INTERNATIONAL BOND, INTERNATIONAL BOND ISSUES, INTERNATIONAL BOND MARKET, INTERNATIONAL BONDS, INTERNATIONAL CAPITAL, INTERNATIONAL CAPITAL MARKETS, INTERNATIONAL DEBT, INTERNATIONAL DEVELOPMENT, INTERNATIONAL FINANCIAL INSTITUTIONS, INTERNATIONAL INVESTORS, INTERNATIONAL MARKETS, INTERNATIONAL RATING AGENCIES, INTERNATIONAL RATING AGENCY, INTERNATIONAL SETTLEMENTS, INVESTING, INVESTMENT BANKING, INVESTMENT DECISIONS, INVESTMENT PROJECTS, INVESTMENT RATE, INVESTOR INTEREST, LEGAL ENVIRONMENT, LEGAL SYSTEMS, LENDERS, LEVIES, LEVY, LINE OF CREDIT, LIQUIDITY, LIQUIDITY CRISES, LIQUIDITY CRISIS, LOAN, LOAN MARKETS, LOCAL CURRENCIES, LOCAL CURRENCY, LONG-TERM CAPITAL, LONG-TERM DEBT, MACROECONOMIC ENVIRONMENT, MACROECONOMIC INSTABILITY, MACROECONOMIC MANAGEMENT, MARKET ACCESS, MATURITIES, MATURITY, MATURITY MISMATCH, MOBILE PHONE, MONETARY FUND, NATIONAL BANKS, PARTIAL CREDIT, PARTIAL GUARANTEES, PARTIAL RISK, PENSION, PLEDGES, POLITICAL RISK, PORTFOLIO, PORTFOLIO DIVERSIFICATION, PORTFOLIO FLOWS, PRIVATE BOND, PRIVATE CAPITAL, PRIVATE DEBT, PRIVATE DEBT FLOWS, PRIVATE FINANCING, PRIVATE FOREIGN INVESTORS, PRIVATE INVESTMENT, PROPERTY RIGHTS, PUBLIC ASSET, PUBLIC DEBT, PUBLIC INVESTMENT, RATES OF RETURN, RELIANCE ON SHORT-TERM DEBT, REMITTANCE, REMITTANCE SERVICE, REMITTANCE SERVICES, REMITTANCES, REPAYMENTS, RETURNS, RISKY BORROWERS, SALE OF SECURITIES, SECURITIES, SHORT-TERM CAPITAL, SHORT-TERM DEBT, SHORT-TERM EXTERNAL DEBT, SOVEREIGN BOND, SOVEREIGN ENTITIES, SOVEREIGN RATING, SOVEREIGN RATINGS, SOVEREIGN RISK, STOCK MARKETS, TAX, TELECOMMUNICATIONS, TERRORISM, TRADE CREDIT, TRADE CREDITS, TRADE FINANCE, TRADE FINANCING, TRADING, TRANSACTION, TRANSACTION COSTS, TRANSPARENCY, TREASURY, TREATY, TRUSTEE,
Online Access:	http://documents.worldbank.org/curated/en/2008/04/9391169/beyond-aid-new-sources-innovative-mechanisms-financing-development-sub-saharan-africa https://hdl.handle.net/10986/6701
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