The West African Development Bank (BOAD) said Monday it invests part of its liquidity in sovereign bonds issued by member states as part of routine treasury management, seeking to reassure investors at a time of rising debt issuance across the region.
In a note sent to investors, the Togo-based institution said its purchases of public bonds were distinct from the budget support it provides to governments in the eight-member West African Economic and Monetary Union (WAEMU).
“In order to optimise treasury management and mitigate cost of carry, BOAD invests a portion of its available liquidity in the regional market, notably in bonds issued by member countries,” the lender said.
It described such instruments as among the safest financial assets in the WAEMU zone and stressed that in more than five decades of operations it had not recorded any payment default by a sovereign issuer within the bloc.
BOAD, headquartered in Lomé, finances development projects and provides loans and grants to member countries. It said that while budget support operations are part of its development mandate, its holdings of sovereign bonds are “exclusively part of its asset management strategy”.
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The clarification comes as WAEMU countries increasingly turn to the regional debt market to plug widening financing gaps.
According to BOAD’s June 2025 financial statements, its portfolio of Ivorian sovereign bonds rose by nearly 360 percent over a six-month period, while its exposure to Senegalese bonds increased by almost 65 percent.
Regional issuance is expected to climb sharply this year. UMOA-Titres, the agency that coordinates public securities issuance for the bloc, has forecast that WAEMU debt sales will rise by 27.7 percent to 15.143 trillion CFA francs (around $27.86 billion) in 2026.
Several member states have already outlined ambitious borrowing plans.
Ivory Coast, the region’s economic powerhouse, said it intends to raise 4.221 trillion CFA francs (about $7.69 billion) on the regional market this year.
Senegal, meanwhile, plans to mobilise 4.132 trillion CFA francs (roughly $7.54 billion), even as it grapples with the fallout from a previously undisclosed debt overhang.
Senegal’s debt burden surged to 132 percent of gross domestic product at the end of 2024, up from 78 percent the previous year, according to the International Monetary Fund. The IMF froze its lending programme with Dakar after the discovery of misreported debt figures under the previous administration.
So far this year, Senegal has raised 590 billion CFA francs (around $1.06 billion) in five issuances on the regional market, with significant allocations to investors based in Togo and Senegal.
Analysts say the growing reliance on domestic and regional markets reflects tighter global financing conditions and more limited access to international capital markets for lower-rated sovereigns.
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For BOAD, investing in member states’ bonds allows it to earn returns on idle liquidity while supporting the development of the regional financial market. However, rising debt levels among some sovereigns have heightened scrutiny of intra-regional exposure.
By emphasising the separation between its treasury operations and development lending, BOAD appears keen to reassure investors that its balance sheet management remains prudent amid expanding regional borrowing.
As WAEMU countries seek to finance infrastructure, social spending and fiscal deficits, the strength and stability of the regional bond market will remain central to the bloc’s economic outlook.
The West African Development Bank (BOAD) is the development finance institution of the West African Economic and Monetary Union (WAEMU), a bloc of eight countries that share the CFA franc currency. Established in 1973 and headquartered in Lomé, Togo, BOAD finances public and private sector projects aimed at promoting regional integration and economic development.
Its member states are Benin, Burkina Faso, Ivory Coast, Guinea-Bissau, Mali, Niger, Senegal and Togo. The union’s monetary policy is managed by the regional central bank, BCEAO, while public debt issuance on the regional market is coordinated by UMOA-Titres.
In recent years, WAEMU governments have increasingly relied on the regional bond market to finance budget deficits, infrastructure projects and social spending, particularly as access to international capital markets has tightened due to rising global interest rates and investor caution toward frontier economies.
Debt issuance in the regional market has expanded steadily, with sovereigns issuing Treasury bills and bonds denominated in CFA francs. This has helped deepen local capital markets but also raised concerns about growing sovereign debt burdens and the concentration of exposure within the region’s financial system.
Senegal’s debt situation has drawn particular attention after authorities disclosed previously misreported liabilities, prompting the International Monetary Fund to suspend its lending programme. Meanwhile, Ivory Coast, the bloc’s largest economy, continues to be one of the most active issuers on the regional market.
As a development bank, BOAD provides long-term financing, loans and grants to member states. In parallel, like many multilateral lenders, it manages liquidity through investments in financial instruments, including sovereign bonds. The distinction between development lending and treasury asset management has become more prominent as regional borrowing volumes increase and investors scrutinise institutional exposure to sovereign risk.
