A report published on africanofilter.org says biased media coverage of African elections raises what African countries pay to borrow. It puts the cost at up to $4.2 billion a year in inflated interest payments.1
The report compares African countries with peers, scores coverage for bias, and tests how those scores line up with sovereign bond yields. It combines a quantitative look across election periods with case studies.1 It finds that African countries get more coverage during general elections, with a disproportionate focus on violence and election fraud. It says this is more pronounced than coverage of non-African countries with similar political risk, and that "violence" is strongly associated with Africa in election headlines.1
The report then links sentiment to cost. Negative coverage, it says, raises perceived risk and so borrowing costs, while positive sentiment goes with lower risk and lower yields. It concludes that international investors see African countries as higher risk than their conditions justify, and that these countries pay significantly more for credit than countries in similar political and socio-economic positions.1 The $4.2 billion figure comes from applying that finding to a group of African countries.1
The authors state the limits. The study measures one channel, how risk sentiment moves the cost of debt. They say it is reasonable to assume tourism and other drivers of development finance are affected in the same way, but that is an assumption. Findings on foreign direct investment and stock flows are in an annexure.1 The summary does not name the countries in the group, give the yield figures, or identify the outlets whose coverage was scored.1
