Africa’s Cost of Capital Is Easing—But Boardrooms Shouldn’t Be Fooled

Tuesday, 16th September 2025.

非洲记者报道

In the last 18 months, Africa’s credit story has improved from “can they refinance?” to “what price will they pay?” Spreads over U.S. Treasuries that blew out in 2022 have narrowed, but remain steep. Moody’s puts Kenya and Nigeria’s risk premia at roughly 500 basis points—better than the panic days, still punishing versus peers. That matters because it sets the floor for everyone’s cost of money: sovereigns, banks, and ultimately the private sector trying to finance growth.

Kenya illustrates both the opportunity and the ceiling. In February 2024—when markets doubted Nairobi could clear a looming $2 billion Eurobond—the government tapped investors and rolled the debt, triggering a sharp shilling rebound and restoring basic confidence. It doubled down in February 2025 with an 11-year issue to refinance 2019 notes maturing through 2027, pushing the next big bullet to 2028. That maturity ladder looks smarter; the price still bites.

Investors noticed. By June 2025, yields on Kenya’s 2028 Eurobond had fallen to about 8.3% from 10.4% a year earlier—a two-point swing that lowers sovereign interest bills and, at the margin, gives banks space to price corporate risk less punitively. But 8-ish percent in dollars is still a high hurdle for private projects that earn shillings. CFOs won’t forget that currency basis risk can erase thin equity cushions.

Policy is the lever that keeps cost curves trending down. The IMF’s April 2025 Sub-Saharan Africa outlook sharpened the context: growth revised to 3.8% and a policy landscape complicated by fragile recoveries, sticky inflation, and election calendars that tempt fiscal drift. For treasuries and central banks, the task is credibility—primary balances that actually improve, FX regimes that actually clear, and state-owned enterprises that actually pay their way. For boards, the question is how to finance strategy under a risk premium that may remain “higher for longer.”

Three implications follow. First, term is now strategic, not cosmetic. The region’s refinancing “second act” will reward issuers that widen their menu beyond plain-vanilla bullets: amortizers, sustainability-linked structures with auditable KPIs, and blended packages that combine concessional tranches with market debt. Moody’s is explicit: concessional flows helped curb FX debt costs but cannot neutralize high market rates—so structure must do more work.

Second, local-currency depth is an enterprise issue, not only a statecraft goal. If you’re a mid-cap agro-processor or a digital-infrastructure operator, your natural hedge is revenue in local currency; your vulnerability is importing equipment in dollars. The financing answer is rarely “all-dollar” or “all-local,” but an intentional stack: a base of shilling term debt, a smaller USD slice matched to export or hard-currency revenues, and pre-agreed hedges that kick in when volatility breaches bands. That blend keeps EBITDA shocks survivable.

Third, operational cash excellence is now a competitive moat. With benchmark spreads still elevated, the cheapest “capital raise” is cycle discipline: days-sales-outstanding pulled down through supply-chain finance and e-invoicing; inventory turns up via tighter S&OP and near-shore buffers; working-capital programs that make procurement and treasury talk in the same language. A well-run cash office is worth 100–200 basis points on your effective cost of funds without printing a prospectus.

The meta-story is simple. The Eurobond window is not “back”—it is half-open, and investors are choosy. Issuers with credible reforms, clean disclosures, and purpose-built structures will print at tolerable coupons; others will pay up or sit out. The task for African boardrooms is to treat cost of capital as a design variable, not a weather report—engineer it down with structure, policy, and cash discipline, and only then step into the market. The reward isn’t just cheaper debt; it’s strategic room to build, even in a world that still charges a premium for your ZIP code.