**Figure 5.1 Corporate bonds issued by infrastructure providers as share of total outstanding**

<!-- Start of picture text --> % As of end-2006 /1<br>100<br>90<br>80<br>70<br>60<br>50<br>40<br>30<br>20<br>10<br>0<br>Ghana Nigeria Tanzania South Africa Zambia Kenya Mozambique Uganda Namibia Senegal Benin Burkina Faso<br><!-- End of picture text --> Sources: Corporate bond data are sourced from national stock exchanges and other national sources. Note: For countries listing bonds on the BRVM (Benin, Burkina Faso, Senegal), the applicable date for outstanding bond amounts is April 30, 2007. The Côte d’Ivoire transport, storage & shipping company, Saga CI, had a bond issue that traded in 2006 but was no longer listed at reference date.

Although it may seem that more corporate bonds than government bonds have been issued to finance infrastructure, it should be noted that it is far easier to assess the extent to which corporate issues finance infrastructure, by identifying the issuer’s industry sector _._ Many companies operating in these markets would like to borrow on longer terms by issuing bonds but many of the markets still lack a benchmark for pricing (see above). With medium- to long-term bank financing costly and scarce, and macroeconomic conditions stabilizing in a number of the focus countries, corporate bond financing is increasingly seen as a viable alternative (Peterside 2006). Further progress is needed in many countries, however, in developing a well-established yield curve, maintaining low and stable inflation rates and interest rates, improving corporate governance and transparency, developing a larger and well-regulated institutional investor base, putting in place credible rating agencies, and increasing awareness of prospective issuers and investors. In December 2006, the International Finance Corporation issued its first local-currency bond in Sub-Saharan Africa—a five-year, AAA-rated, $44.6 million bond, denominated in CFA francs and listed on the BRVM. A key purpose of the issue was to set an efficient benchmark yield, reinforce credit differentiation, and promote development of the regional bond market in the eight WAEMU member countries. Prior to this issue by the IFC, the West African Development Bank (BOAD) had been the de facto benchmark issuer on the WAEMU regional bond market, even though its bonds did not have a credit rating (IFC 2007).

Corporate-bond-trading volumes are low or nonexistent on some exchanges. Turnover ratios in these markets, where they exist, are even lower than on the government bond markets (see table 5.3). Most corporate bonds are held to maturity and not traded because of their small size and number and lack of financial product diversity. The corporate bonds listed on the Nigerian and Zambian securities markets did not trade at all during 2006, and turnover ratios were less than 3 percent in all of the other focus country markets on which corporate bonds were listed. The exceptions were Namibia, where the bondturnover ratio was 20 percent, and South Africa, 351 percent. Even South Africa’s corporate bond market is shallow compared with those of other emerging and developed-country markets and it has a relatively 51