Diaspora Bonds: Some Lessons for African Countries

This economic brief draws out lessons from the mostpublicized Diaspora bond issuances globally – that of Israel, India andEthiopia with the aim of exploring their applicability to the African context.It intends to provide insight to potential African issuers on what aspects toponder prior to issuance. This economic brief concludes that Diaspora bonds arean important fundraising vehicle but that critical to their success in Africaare both soft and hard factors: intensive marketing based on disaggregated dataon the Diaspora and credit enhancement to entice investors and reduce riskperception. In this regard, development finance institutions such as theAfrican Development Bank have a critical role to play in providing statisticaldata, advisory services and risk mitigating financial instruments to helpAfrican countries realize their aspirations to issue.