Gabon has launched a CFA85 billion (US$153 million) public bond on the Central African Economic and Monetary Community (CEMAC) market to finance priority projects outlined in its 2026 budget, according to the government.
The issuance is structured in two tranches. Tranche A offers a 6 percent annual interest rate over three years, while Tranche B carries a 6.5 percent rate over four years, with principal repaid in full at maturity. The subscription period runs from February 25 to May 25, with Emrald Securities Services Bourse acting as lead arranger and CCA Bourse as co-arranger.
Proceeds from the bond are split into two components. CFA60 billion (US$108 million) will be raised in cash to support government projects, while CFA25 billion (US$45 million) will be used to convert validated state arrears owed to companies into bonds. Investors holding government claims can exchange them for bonds on a 1:1 basis, provided they contribute an equal amount in cash. This mechanism aims to reduce arrears and ease cash flow pressures while bringing private creditors into the financing plan.
The bond carries a 0 percent prudential risk weighting, meaning banks subscribing to the bonds are not required to allocate regulatory capital against sovereign risk. This feature is designed to encourage participation from regional financial institutions and strengthen local capital markets.
Since 2007, Gabon has raised a cumulative CFA1,641 billion (US$2.94 billion) on the regional market through public offerings and private placements. The latest issuance reflects the government’s ongoing strategy to rely on regional financial markets and semi-concessional loans to meet fiscal needs while minimizing exposure to higher-cost external debt.
The government said the operation will fund key initiatives included in the 2026 Finance Law, helping advance infrastructure, social programs, and other development priorities. It also serves as a test of the CEMAC market’s depth and the Gabonese Treasury’s capacity to mobilize local savings amid elevated financing requirements.
Market analysts note that combining cash financing with arrears conversion is a practical approach to managing public finances. By reducing outstanding obligations to suppliers and simultaneously raising capital, Gabon strengthens fiscal discipline while supporting private sector liquidity.
The issuance is also a signal to investors of Gabon’s continued commitment to the regional bond market, reinforcing confidence in the country’s fiscal management and creditworthiness. The government has emphasized that domestic market reliance, rather than external borrowing alone, is central to its 2026 debt strategy.
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Investors have been encouraged by the clear terms, moderate interest rates, and the 0% prudential risk weighting, which make the bonds attractive for banks and institutional investors in Central Africa. Successful uptake of the bonds is expected to bolster the local financial market and set a precedent for future sovereign issuances in the region.
In summary, Gabon’s CFA85 billion ($153 million) bond issuance represents a key step in financing the 2026 budget, combining cash mobilization with arrears reduction, strengthening the regional debt market, and supporting economic and social development priorities across the country. The bond sale is a strategic move to meet fiscal targets while deepening financial market participation in the CEMAC zone.
