At the start of the year, the regional debt market is operating fully as a price-driven market. Its depth and capacity to absorb large volumes are no longer in question. Instead, budgetary, political, and institutional fundamentals are once again shaping borrowing costs.

Côte d’Ivoire raised more than 320 billion CFA francs ($569.1 million) in its first market operation of the year, setting the tone for a busy week on the WAEMU debt market. Benin mobilized 60 billion CFA francs the following day, while Mali secured 44 billion CFA francs shortly thereafter.

With subscription rates significantly exceeding 100 percent, the regional debt market has begun 2026 with strong momentum. The current scale of operations marks a shift from a few years ago, when 20 billion CFA franc tranches underscored the limited depth of the UMOA market. Following a record 11 trillion CFA francs ($19.5 billion) raised in 2025, the activity at the start of this year confirms the regional market is now capable of providing large-scale financing to member states.

While the publication of official 2026 financing targets is still pending, liquidity is clearly available. Banks and institutional investors are participating, and auctions are clearing smoothly, with no visible strain on volumes.

A deep but disciplined market?

This abundance does not imply indiscriminate lending. The first auctions of 2026 extend a dynamic observed last year, in which selectivity has quietly taken hold. All states find buyers, but at different prices. This differentiation is most visible in the structure of maturities.

Liquidity remains abundant and relatively non-discriminatory for short-term debt. Treasury bills with maturities of three, six, or twelve months continue to be widely subscribed at moderate yields. Benin is financing itself at around 5 percent for three months, while Mali remains below 6.1 percent for six months. At these shorter horizons, investors view the risk as manageable. It primarily relates to immediate cash flow needs within a regional settlement framework still seen as solid.

The picture changes for medium- and long-term debt. The three-year maturity, which has become a benchmark for investors, provides an initial illustration. Benin is financing itself at 6.34 percent, the lowest level observed at the start of the year. Côte d’Ivoire, the economic engine of the zone, must concede 6.81 percent, around 7 percent higher at the same maturity. Market participants largely attribute this moderate premium to the scale of its financing needs. In 2025, Côte d’Ivoire raised more than 5 trillion CFA francs via UMOA-Titres, more than ten times the volume mobilized by Benin, its closest challenger on rates.

When maturity becomes a test

The contrast is more striking with Mali. At 8.42 percent for three years, the country pays nearly a third more than Benin and approximately 24 percent more than Côte d’Ivoire to raise funds. Every 100 billion CFA francs borrowed results in more than 2 billion CFA francs in additional interest over the life of the security. For many observers, this premium does not reflect budgetary or macroeconomic weaknesses alone. It also incorporates broader institutional uncertainty, which becomes more apparent as maturities lengthen. In the medium term, the market is no longer just financing a state, but the stability of the regional framework in which the debt must be honored.

This interpretation is reinforced at longer maturities. Benin is still able to raise funds at five and seven years at yields between 6.4 percent and 6.9 percent, a sign of relative confidence in its budgetary and institutional trajectory. By contrast, Mali sees its costs rise sharply. The required yield for a five-year maturity exceeds 8 percent. As maturities extend, investors increasingly assess the durability of the monetary and financial framework. This occurs in a context where debates surrounding the regional anchoring of the Alliance of Sahel States (AES) countries fuel growing investor caution. As in 2025, these countries, along with Senegal, which remains affected by the episode of its hidden debt, now operate under an explicit risk premium.

Fiacre E. Kakpo