On January 16, 2025, Benin achieved historic fundraising on the international financial market. By combining a bond issue and a commercial loan, the country mobilized USD 1 billion to finance its development ambitions. This dual operation schedules a financial closing for the bond issue on January 23 and for the bond buyback on January 29, 2025.
Successful Eurobond with Strong Demand
A 500 million USD bond issue constitutes the first part of this strategy. The order book reached 3.5 billion USD, seven times the initially sought amount. Having attracted more than sixty international investors, this strong demand illustrates the confidence in Benin. The operation, arranged by Citigroup Inc., JP Morgan Chase & Co, and Société Générale, followed a three-day roadshow.
The interest rate for this euro bond is set at 6.48 %, slightly lower than the 6.50 % recorded during the 2024 issue. A dollar-euro exchange hedge reduces the yield by 75 basis points, optimizing the public debt cost. This strategy, combined with strong demand, strengthens the country’s position in financial markets.
This success is based on proactive management and effective communication with creditors. Established trust allows not only to obtain favorable conditions but also to consolidate the foundations of rigorous debt management.
Advantageous Commercial Loan with Deutsche Bank
Simultaneously with the bond issue, Benin concluded a 500 EUR million commercial loan with Deutsche Bank. This financing, with an interest rate of 6 % over 15 years, includes a partial guarantee of 200 million EUR from the International Development Association (IDA). This guarantee reduces risks for investors and offers favorable conditions for Benin.
The funds obtained will allow the repurchase of part of the 2032 Eurobond. This move will extend the debt’s maturity while reducing its service cost. This strategy frees up capital for structuring projects aligned with the Sustainable Development Goals (SDGs). Beyond debt management, this fundraising aims to promote sustainable economic growth. Priority sectors include infrastructure, energy, and education.
Changing African Financial Market
The success of this fundraising illustrates a significant evolution in the African financial market, particularly in sovereign debt. Benin opens 2025 with an innovative operation, thus reinforcing its leadership position in public debt management in Africa. Favorable conditions in the global financial market, marked by monetary policy easing, benefit developing economies. Low inflationary pressure and low interest rates offer opportunities to access external financing at reduced costs.
According to Moody’s, Sub-Saharan countries should continue to benefit from favorable conditions this year. Easing global monetary policies, particularly those of the US Federal Reserve, will positively influence the region’s financing costs. After two years of exclusion, five Sub-Saharan states reintegrated the Eurobond market in 2024, namely Côte d’Ivoire, Benin, Kenya, Senegal, and Angola. Benin’s experience in public debt management and fundraising serves as an example for other regional economies.
Public Debt Management : Model of Rigor
Benin’s Finance Minister, Romuald Wadagni, emphasizes the importance of rigorous public debt management. Benin’s public debt represents 53.7 % of GDP, a ratio deemed sustainable. The budget deficit remains controlled, and the average debt maturity reaches 8.9 years, reflecting the maturity of financial commitments.
The national economic strategy aims to reduce debt costs while supporting long-term development projects. The funds raised during these operations finance essential infrastructure and strategic sectors. This approach aims to create a favorable environment for inclusive and sustainable growth. Rigorous public finance management strengthens the country’s credibility on international markets and attracts more investments.
