The surplus liquidity on the international financial markets and the reform progress in many countries are increasingly attracting investors seeking higher yields to "exotic" destinations. Kenya, Ghana and Namibia are good examples, to name but a few.

However, liquidity is still low in the local financial markets, so institutional investors are still mainly focusing on the stock exchanges of South Africa, Egypt, Nigeria and Morocco. For many African governments, fostering the development of local capital markets ? particularly the bond markets ? is at the top of the agenda.

After all, strong and liquid bond markets are a buffer against financial shocks and currency fluctuations as well as a key source of funding for domestic companies. Germany’s initiative to promote Africa’s local bond markets during the German presidency of the G8 could make an important contribution to their development.

Back in the global spotlight:
With the big China-Africa summit in Beijing last November, China ushered in a new era of Chinese-African relations. China publicly demonstrated its increasing commitment to Africa in the form of soft loans and investment projects, thus returning the “forgotten continent” to the global spotlight. Even though the Chinese model is certainly not a panacea for Africa, China has re-sharpened the Western world’s focus on Africa after a long period of neglect.