Sovereign bonds (debt issued by governments) are a popular form of financing for many sub-Saharan African countries. One reason for this is that sovereign bonds have fewer conditions attached to them than the loans available from traditional sources such as the International Monetary Fund (IMF).

For low and middle-income countries, however, the irresponsible use of sovereign bonds can create boom and bust cycles that leave economies devastated; this was the case in the 1990s with the Asian financial crisis.

In this paper, the author suggests that governments should be held more accountable for the way in which these funds are used by national institutions and development agencies. The author also suggests that investors should place further conditions on sovereign bonds.

• Part I of this study examines the current situation of sovereign bonds issued in sub-Saharan Africa.
• Part II considers the risks associated with sovereign bonds and their prevalence today.