Benin has issued US$500 million in seven-year Islamic bonds, or sukuks, as the West African country continues to diversify its sources of external financing amid volatile global capital markets, the government said on Thursday.
The sukuk carries a coupon of 4.92 percent after a full dollar–euro hedge, the government said in a statement, making it one of the lowest-priced Islamic bond issuances by a sub-Saharan African sovereign in recent years.
Alongside the sukuk, Benin also reopened its 2038 Eurobond, raising an additional amount equivalent to US$350 million at a coupon of 6.19 percent, also fully hedged, the statement said.
The dual operation brings Benin’s total international market issuance this week to about US$850 million and underscores investor appetite for the country’s debt, despite tighter global financial conditions and rising borrowing costs for many emerging and frontier markets.
Benin, rated B+ by S&P Global and Fitch, has built a track record as one of the most active and consistent issuers in the West African sovereign bond market. It has previously accessed international markets through conventional Eurobonds as well as Islamic finance instruments, including Africa’s first sovereign international sukuk in 2019.
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The government said the latest sukuk issue was structured to attract a broad base of investors, including those focused on Sharia-compliant assets. Sukuks differ from conventional bonds in that they are backed by tangible assets and comply with Islamic finance principles that prohibit interest payments.
Officials did not disclose which assets underpin the new sukuk, but Benin has previously used public infrastructure, including government buildings and transport projects, as part of similar structures.
The transaction comes as Benin seeks to finance priority investments in infrastructure, education and social services, while maintaining access to international capital markets. The country has also relied heavily on regional bond markets within the West African Economic and Monetary Union (WAEMU), where it is considered a benchmark issuer.
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Benin’s public finances have faced pressure in recent years from security spending linked to regional instability and from the economic fallout of global shocks. However, the government has sought to preserve fiscal discipline and maintain investor confidence through a mix of external and domestic financing.
The reopening of the 2038 Eurobond allows Benin to increase the size and liquidity of an existing instrument rather than issuing a new long-dated bond, a strategy often used to manage refinancing risks and smooth debt maturities.
Benin did not provide details on the allocation of proceeds from the sukuk and the Eurobond tap but said the funds would support budgetary needs in line with the country’s medium-term development plans.
The issuance adds to a growing number of African sovereigns turning to Islamic finance as a complementary funding source, alongside conventional bonds and multilateral financing, as they seek to broaden their investor base and manage borrowing costs.
