Want steady income without the wild swings of stocks? Bonds can help. A bond is basically a loan you give to a government or company. They pay you interest (the coupon) and return your money at the end (maturity). For many people in Africa, bonds are a straightforward way to protect capital and earn predictable returns.
Government bonds: Issued by national governments (for example, South African, Kenyan, or Nigerian bonds). They’re usually safer than corporate bonds and suit long-term savers.
Treasury bills: Short-term government papers that mature in a year or less. They’re low-risk and often used for parking cash.
Corporate bonds: Issued by companies. They pay higher interest but carry higher risk—check the company’s track record before you buy.
Inflation-linked bonds: These protect you when inflation spikes. The principal or coupon adjusts with inflation so your real return holds up better.
Where to buy: Many African investors buy bonds through commercial banks, licensed brokers, or the local stock exchange. Some countries run retail bond offers directly through their treasury websites. Bond ETFs are another easy option if you want exposure without picking individual bonds.
Check the yield and maturity: Yield tells you expected return. Maturity is when you get your money back. Longer maturity usually means higher yield but more sensitivity to interest rate changes.
Look at credit risk: Ratings from agencies matter. If the issuer’s credit rating is low, you’ll get a higher coupon to compensate for the risk—think twice before chasing the highest yields.
Use laddering: Spread purchases across different maturities. If rates rise, only part of your money is locked at older, lower rates. Laddering smooths income and reduces timing risk.
Watch inflation and currency risk: In some African markets, inflation and local currency moves can erode returns. Consider inflation-linked bonds or foreign-currency bonds if you want to hedge that risk.
Tax and fees: Bond income can be taxed differently in each country. Ask your broker or bank about withholding tax and transaction fees before you buy; fees can eat into returns, especially on smaller investments.
Quick checklist before you buy: 1) Who’s the issuer and what’s their credit rating? 2) What’s the yield vs current inflation? 3) How long until maturity? 4) Are there early repayment (call) features? 5) What are the fees and tax rules?
Bonds aren’t exciting, but they work. If you want steady income, lower volatility, and a clearer plan for future cash needs, bonds deserve a look. Start small, read the prospectus, and ask questions—then build a bond strategy that fits your goals.
Ian Njoroge, accused of assaulting and robbing a traffic police officer on Kamiti Road, has been granted a bond of Ksh700,000 by Senior Principal Magistrate Ben Mark Ekhumbi. Njoroge faces multiple charges including causing actual bodily harm, robbery with violence, and resisting arrest. He was also arraigned for causing obstruction and overloading passengers.
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