As I head to the French resort town of Deauville this week to participate in this year’s G-8 meeting, I promise one thing new: The tone will change. This year Africa brings to the table its own good news. Senegal, for one, is preparing for a world where the assumptions of yesteryear no longer stand.
A few favorite African heads of state are always invited to G-8 summit meetings, and I’ve often been let into the club for a lively chat, a copious meal of promises and ambitious pledges, and a hearty round of preaching.
This state of affairs is no longer acceptable. Europe claims to support giving Africa, South America, Asia and the Middle East a stronger voice in the international clubs it helped to create. Perhaps it is time for Europe to show it really means what it says — and lighten its grip on the reins of planetary control.
Senegal, as you know, is not a member of the once elite G-8. We are not even a member of the G-20, which offers only one African seat despite the fact that it was supposed to reflect the new world order when it was created in 2008 as a response to the crisis that originated in the G-8 but rocked the rest of the world.
The crisis showed that the old world order is no longer credible. It’s not sustainable for the rich world to dole out advice and crumbs to the rest of us. The euro zone’s debt crisis is a case in point.
Europe claims this is a reason it should hold onto the leadership of the International Monetary Fund, but surely its increasingly poor image among international investors argues quite the reverse: The old Continent’s difficulty in managing its affairs suggests it might benefit from a bit of outside advice.
It gives me no pleasure to watch the discomfort of others, and for all the world’s sake I hope Europe finds a lasting solution for Greece, Ireland, Portugal and other countries struggling to deal with past profligacy. And, of course, Africa has had its own challenges in managing public finances.
But I cannot help but notice as I head to France that international investors appear to find Senegal more credible and a better bet than Europe’s laggards.
Investor decisions are often the most accurate bellwether of economic realities. The yields on 10-year bonds in Greece and Ireland are hovering around 10 percent as doubts linger about the governments’ ability to repay their debts. Compare that with a coupon of 8.75 percent on a recently issued Senegalese bond. Although the context is different, the point is valid: What’s attractive in the world of investments has shifted.
This year, I’ll be pulling up to the G-8 table with a fresh report that was just delivered to my desk in Dakar from African executives of Standard Bank, an African bank with strategic presence in emerging markets who have acted as the joint-bookrunners with Standard Chartered of our recent Eurobond offer. Investor confidence in Senegal is running so high that our $500 million, 10-year bond, in combination with a strategic exchange tender of our 2014 bond, was over-subscribed in just four days reaching an overwhelming $2.4 billion in sales from more than 125 institutional investors from North America, Europe and Asia.
Ours is among only a handful of sovereign bond issues to come to market from sub-Saharan Africa, but it is a clear indication that the days of reliance on donor pledges for financing are ending. Africa’s deeper economic story is tied to our ability to mobilize our own wealth. G-8 pledges to the developing world are still important but their relevance is clearly dwindling. A further upside for Africa is Senegal’s expected eligibility for the Emerging Market Bond Index Global. G-8 leaders will be reminded that the world is waking up to the intrinsic value of Africa’s economic promise and that serious investors are arriving.
Hidden beneath the shackles of outdated perceptions and obscured by the healthy unrest and much-need political reform in North Africa and around the continent lies an Africa that will insist on being heard in Deauville this week. News of the fresh confidence in Africa’s economic awakening will be shared.
Having now reached one billion inhabitants, Africa’s promise lies in its robust markets and hundreds of new companies, the measurably improved management and returns of its massive commodities, its growing service industries and educated consumer classes, and its rapidly improving infrastructure and sub-national governance.
But the words of hopeful politicians no longer need to be trusted; the order book of bullish investors has spoken.
By Abdoulaye Wade, president of the Republic of Senegal.