CASE STUDY
L&G LSF African Government Bond UCITS ETF
CATEGORY
Demand
Capital market tool
Anchoring
Geography
Countries eligible under the Liquidity and Sustainability Facility (LSF)
LISTING EXCHANGE
London Stock Exchange (LSE)
SECTOR
Financial Services; Sovereign Debt
DFI / DONOR INTERVENTION
MOBILIST
TRANSACTION SIZE
N/A
TRANSACTION YEAR
2026
Structure and Capital Market Tool
MOBILIST supported the launch of the ETF, which is designed to broaden the institutional investor base in African sovereign debt markets. The fund aims to help African governments access more investment and provides UK investors with a new pathway to invest in African markets.
The investment is part of MOBILIST's broader engagement with the LSF. The programme also supported the launch of the iBoxx LSF USD African Sovereign Index in 2024, which aimed to establish the foundations for new Africa-focused investment products and to attract a broader range of investors to African sovereign debt. The new ETF tracks the iBoxx LSF USD African Sovereign Index.
Background and Market Context
Launched at COP26 in Glasgow, the Liquidity and Sustainability Facility (LSF) was designed by the United Nations Economic Commission for Africa (ECA), in collaboration with the African Export-Import Bank (Afreximbank). The LSF's objectives are to support African sovereign Eurobonds and corporate issuances, lower the cost of finance, and increase liquidity in African capital markets.
In August 2026, UK-based financial services group Legal & General (L&G) partnered with the LSF to launch an African Government Bond UCITS exchange-traded fund (ETF) with seed capital from the UK government's MOBILIST programme. The significance of this transaction lies in the effects that come with lowering the cost of sovereign debt for the rest of a given economy. Sovereign bond yields have important impacts for broader debt market development in EMDEs. Markets tend to use yields on benchmark government securities to price a range of other financial instruments, such as corporate bonds. Lowering the cost of capital for governments thus contributes not only to government savings, but to improved debt markets within a country.
Development Impact
This transaction illustrates a demand-side intervention, with development capital seeding a third-party offering and thus playing a catalytic role in market building, supporting the creation of new investment products and broadening the universe of investors for African issuances. A broader investor base can contribute to more active secondary markets and price transparency. This, in turn, can lower liquidity premia for African sovereign and private issuers.