African countries have since 2006 paid in excess of $ 2 billion on premiums on Eurobonds they have issued.
The figure represents how much the continent has paid in excess of what the actual amount should have been.
Economists have said that the phenomenon is due to the inability of governments on the continent to make their economies attractive to investors.
Professor Godfred Bokpin who is the head of the Finance Department of the University of Ghana Business School said African governments must exercise restraint in dealing on the international capital market.
“In terms of the international market doing Eurobond, we have to be very careful, because once you don’t put your house in order, once the fundamentals of the economy is not that attractive to investors then you are likely to pay higher premium.”
Many African countries depend a lot on loans to run their governments thereby raising the debt stock of those countries.
Source: Africafeeds.com
