Ivory Coast failed to issue local currency debt in March, while Senegal, Mali, Niger and Burkina Faso have cancelled or postponed bond issuance in recent weeks.
Ivory Coast, the biggest economy in the West African Economic and Monetary Union, failed to raise 85 billion CFA francs through bonds issued at an interest rate of around 5.5%. It returned to the market to raise the funds at an interest rate above 6%. “When market conditions are not favourable at a given time, we withdraw to come back with a better offer,” he said, adding that the next bond issuance will take into account the realities of the market and interest rates will be adjusted.Mali, Benin, Burkina Faso and Senegal have all had to postpone debt auctions. Senegal returned to the market to raise over 201 billion CFA at an interest rate above 6%, the finance ministry said in a statement on March 31.
“With the BCEAO tightening monetary conditions to contain elevated inflationary pressures and preserve FX reserves, the cost of funds for banks has increased,” Kwapong said. Countries will have to seek bilateral assistance to avoid budget deficits and continue to finance projects, said Soualiou Fadiga, executive director of the regional stockbrokers association.
Very soon even South Africa will be affected by this,this country is slowly becoming Zimbabwe financially, the Currency is getting weaker and weaker daily