• WAEMU public debt market has become the main source of local-currency sovereign financing
• Rapid growth in issuance is exposing limits in market depth and secondary market liquidity
• Authorities call for broader investor base, stronger discipline, and deeper secondary trading

Discussions at the 8th Public Securities Market Meetings in Lomé on January 27 pointed to an operational WAEMU public debt market facing structural limits as financing needs increase.

UMOA-Titres CEO Oulimata Ndiaye, BCEAO Governor Jean-Claude Kassi Brou, and Togo’s Minister of Economy and Finance Essowè Georges Barcola all pointed to the same conclusion. The market has reached operational maturity, but it is not yet deep enough to absorb growing volumes without pressure on interest rates, liquidity, and fiscal credibility.

A market that has become a pillar of sovereign financing

On this point, there was broad consensus. Over the past decade, the WAEMU public securities market has become the central tool for sovereign financing in local currency. The BCEAO governor noted that outstanding auctioned public securities rose from 5.6% of GDP in 2014 to nearly 15% in 2025, marking a structural shift in how governments fund public policy.

Over the past decade, the WAEMU public securities market has become the central tool for sovereign financing in local currency.

UMOA-Titres highlighted qualitative progress, including more regular issuance calendars, gradual diversification of maturities, professionalization of market participants, and improved financial disclosure. In 2025, funds raised on the public securities market reached CFA11,858 billion, up more than 47% year on year, with total outstanding debt standing at CFA21,629 billion at the same date.

For Togo’s finance minister, the regional market has become an instrument of financial sovereignty. It allows governments to reduce reliance on external capital and regain control over their budget paths. Togo’s experience reflects this trend. Between 2021 and 2024, the country raised CFA500 billion to CFA700 billion each year, at times covering nearly all of its financing needs through the regional market.

The secondary market, the weak link

This success is now testing the limits of the system. The sharp rise in issuance volumes is straining a market architecture that remains incomplete, especially on the secondary segment. Despite progress, including a debt turnover ratio above 25% compared with 5% in 2016, liquidity remains insufficient to ensure fully efficient price formation.

“The liquidity of the secondary market remains limited and price formation is not yet fully optimized,” Ndiaye said.

Without a deep secondary market, sovereign debt struggles to serve as a true benchmark asset. Yield references remain fragile, extending maturities becomes more complex, and fiscal expectations are harder to anchor. The key issue is no longer the ability to raise funds, but the long-term sustainability of the model. Domestic debt is now judged not only by volumes raised, but by the market’s capacity to absorb growing issuance without excessive volatility or a loss of confidence.

While the primary market meets immediate funding needs, governments must now put in place the institutional and regulatory conditions for the secondary market to play its full role.

For Barcola, this calls for political responsibility. While the primary market meets immediate funding needs, governments must now put in place the institutional and regulatory conditions for the secondary market to play its full role.

Financial inclusion, local savings, and long-term investors

Deepening the market also requires a broader investor base. Long dominated by banks, the regional bond market now needs to attract more long-term savings. The BCEAO stressed the role of financial inclusion, noting that access to financial services rose from 45% in 2016 to nearly 75% in 2025, with a target above 90% by 2030.

Kassi Brou said this trend should expand the investor base beyond banks to households, institutional investors, and eventually some international investors. The shift is already underway. In 2025, public debt was increasingly financed not directly by banks using their own balance sheets, but through savings they collect and manage on behalf of clients.

Sovereign risk is gradually moving away from bank balance sheets toward long-term savings, including household savings products, insurance portfolios, and pension funds. This shift is often seen as a sign of financial maturity.

Holdings of public securities on behalf of savers and institutional investors rose by more than 110% year on year, while those held directly on bank balance sheets grew by only 9%.

In effect, sovereign risk is gradually moving away from bank balance sheets toward long-term savings, including household savings products, insurance portfolios, and pension funds. This shift is often seen as a sign of financial maturity.

Technology, but above all market discipline

The rise of long-term savings requires a clearer, more fluid, and more predictable trading framework. Investors need credible exit options and reliable price signals.

Modernizing market infrastructure is seen as essential. The launch on January 27 of an electronic quotation and trading platform for the secondary market is the most visible symbol of this new phase. Market participants see it as a key lever to improve price transparency and reduce trading frictions. But the BCEAO governor cautioned that technology alone is not enough.

Full disclosure, regular investor dialogue, and credible commitments have become non-negotiable conditions.

Without quotation discipline, sound practices, market ethics, and predictable issuance calendars, the platform will not generate the expected liquidity, he said. The Togolese finance minister echoed this view, stressing the responsibility of issuing governments. Full disclosure, regular investor dialogue, and credible commitments have become non-negotiable conditions.

Fiacre E. Kakpo