Bond Market Development and Infrastructure Development Index; an Analysis of African Countries with the Portfolio Investment Bonds

Abstract

This paper analyses the empirical relationship between portfolio investment bonds and Infrastructure development index in Africa. The study seeks to establish if there is a statistically significant relationship between the portfolio investment bonds and infrastructure development index in Africa. Panel data of 13 countries for the period of 9 years from 2013 to 2022 was adopted. The study is supported by positivism philosophical underpinnings, a quantitative approach, multiple case design. It is a triangulation of correlation, regression, and hypothesis -testing through the linear dynamic panel data Generalized method of Momentum (GMM) model. This model estimates the empirical relationship between the key variables under study. The results from the study indicate a significant positive relationship between the portfolio dollar amount logged twice from the world bank data indicators and the infrastructure index from the Africa Infrastructure development Indicator (AIDI) also logged twice based on the model requirements. Therefore, countries that receive higher portfolio dollar amounts realize more infrastructure development. It is therefore recommended for African countries to create a Political, Economic and Regulatory supportive policies for bond market development especially the portfolio investment bonds. This paper ascertains a relationship between bond market development and Africa infrastructure development index. And develops policy discussions regarding infrastructure financing though a well-developed bond market with a variety of bond types