The West African Development Bank BOAD sent a note to investors on Monday, explaining its cash management strategy, which involves investing in public bonds issued by member countries, and clarifying how this differs from the budget support it provides member countries.

The statement to investors, seen by Reuters, comes at a time when members of the West African Economic and Monetary Union (WAEMU) are relying heavily on the regional market to raise cash.

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“In order to optimize 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, which are regarded as among the safest financial instruments across the WAEMU region,” the Togo-based lender said in the statement.

“Over more than fifty years of operations, the institution has not recorded any payment default by a sovereign issuer.”

BOAD provides budget support to member countries in the form of loans and grants. It said its purchase of sovereign bonds, however, was “exclusively part of its asset management strategy”.

Its June 2025 financial statement showed that its portfolio of Ivorian bonds had increased by nearly 360% over six months, while its Senegalese portfolio increased by nearly 65%.

WAEMU debt issuance is expected to rise 27.7% to 15.143 trillion CFA francs ($27.86 billion) in 2026, Arouna Sow, an official at regional debt agency UMOA-Titres, said at a conference in January.

Economic powerhouse Ivory Coast announced at the same UMOA-Titres conference that it plans to raise 4.221 trillion CFA francs ($7.69 billion) during the year.

Senegal, whose government is grappling with a hidden debt crisis left by the previous administration, said it plans to raise 4.132 trillion CFA francs ($7.54 billion).

Its debt burden ballooned to 132% of gross domestic product at the end of 2024 from 78% in 2023, according to the International Monetary Fund, which froze its lending programme after the discovery of misreported debt.

Senegal has raised 590 billion CFA francs ($1.06 billion) on the regional market in five issuances so far this year, with significant allocations made to bidders based in Togo and Senegal.

REUTERS