China bond market opening offers no panacea to debt-laden African states

African governments are exploring the issuance of panda bonds in China's domestic debt market, but significant challenges remain.

While over $18 billion in panda bonds were issued in 2023, issues like the yuan's limited global trading and high debt loads hinder progress.

President Xi Jinping recently expressed support for this initiative during a summit, emphasizing closer ties between Africa and China.

Countries like Kenya are considering issuing panda bonds, with Kenya planning a $500 million debut this financial year.

However, the dominance of the dollar and liquidity concerns complicate the shift to yuan-denominated funding.

Experts suggest African nations should persist in pursuing panda bonds, potentially enlisting partners to facilitate this transition.