Demand for Equipment in Africa Tied to Bond Investments

url-1There is a strong need for construction equipment to Africa because many nations are investing heavily into building infrastructure and other projects. Funding all of these infrastructure projects are debt investment companies, from the US, that issue bonds to African nations. Examples include work in Ghana, Kenya, Ethiopia, Ivory Coast and Nigeria. African nations raised $19 billion during the past two years in bonds, which is 10 times more than what was raised in bonds per year during the previous decade. In turn, companies in these nations reach out to a trusted freight forwarder who can supply heavy machinery shipping rates and logistics services.

However, it seems that many US debt investment companies might soon cease many of their bonds to Africa. If this occurs, then the demand for construction equipment in Africa might decrease. There are many reasons why US debt investment companies are afraid of issuing bonds to Africa in 2015. The US Federal Reserve is anticipated to raise interest rates, which will impact the second half of 2015. Lower oil prices are hampering many nations in Africa that are still dependent on oil. And a stronger US Dollar means that some African nations cannot repay the bond.

Some African nations are looking beyond the US for an investment. Recently, Kenya received a $700 million loan from the International Monetary Fund, and Angola received a $500 million loan from the World Bank. The loans could be used to fund infrastructure projects in these nations, including some for transportation. Hopefully, the bonds continue to provide investments in Africa, because many ocean freight shipping companies, including carriers, depend on the opportunities in Africa.

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