2026 Perspectives for the Public Sector

A spotlight on WAEMU The advancement of regional economic blocs is a key strategic pathway for mitigating the constraint of small domestic market size, and the maturation of the West African Economic and Monetary Union (WAEMU) is pivotal to this effort, given its position as one of the world’s fastest-growing economic zones. 10 Central to this regional coherence are the economic anchors, Côte d’Ivoire and Senegal, which together account for over half (54%) of the WAEMU’s regional GDP . 11 Their prominence in the region’s financial architecture is undeniable; Côte d’Ivoire alone accounts for 58% of the outstanding listed government bonds on the regional exchange (BRVM), while companies based in Côte d’Ivoire and Senegal command over 80% of the BRVM’s total equity market capitalization. 12 This regional weight underscores why the successful deepening of the WAEMU’s capital markets is indispensable for channeling capital at scale and addressing the acute unmet business financing needs weighing on regional growth. While the region’s shared infrastructure, including the common XOF currency and regional institutions like the BRVM and UMOA Titres, has successfully established a coherent onshore curve, realizing its full potential requires targeted action. Specifically, optimizing the current friction caused by the fragmented dual debt markets and implementing the necessary legal and operational frameworks for complementary markets like repos and derivatives would significantly enhance efficiency. A price discovery platform is being finalized by UMOA Titres which will facilitate secondary market access and execution. A dedicated FCY window will also be key to attract further FCY investors in local markets. Successfully advancing these structural enhancements in the anchor markets of Côte d’Ivoire and Senegal will allow the bloc to effectively leverage its collective economic weight, improving liquidity and attracting the stable, long-term domestic and non-resident capital needed to finance structural transformation and investment gaps. In March 2025, Citi, acting as a joint bookrunner, facilitated the Republic of Côte d’Ivoire’s dual-tranche transaction, which included a CFAF 220 billion three-year tranche placed with international investors. The CFAF tranche, at a reoffer yield of 7.625%, priced comparable to the sovereign’s USD funding on a cross-currency swapped basis, demonstrating deep investor appetite for local currency paper from a major issuer in WAEMU. Sequencing Policy for Durable Participation The art of Market development is a multi-dimensional puzzle and requires continuous policy interventions to overcome stable but suboptimal equilibria. Successful models from other EMDEs, such as Peru’s government bond market reforms to consolidate fragmented issuance and institutional investor collaboration, South Africa’s bond market reforms in early 2000s or Poland’s structured approach to reducing listing barriers for SMEs, offer applicable lessons for Africa. Successful capital market development necessitates adhering to a structured policy sequence that prioritizes the establishment of core credibility. This foundational phase begins with ensuring Macroeconomic Stability. This stability must be complemented by robust Institutional Quality, involving the guarantee of rule of law, coupled with policy coherence and predictability in regulation. Only once these prerequisites are firmly in place can policy advance to the third pillar: Sovereign Curve Deepening. 13 This sequence ensures that private sector diversification and complex financial instruments can confidently follow the sovereign benchmark, enabling more durable, resilient capital formation. Only once these foundations are solid can the private sector confidently access the market, enabling diversification into corporate bonds, securitizations, and specialized instruments like green or infrastructure bonds. Foreign participation is generally beneficial, adding liquidity and competition, but must complement, not substitute, the necessary foundation built on domestic savings. This comprehensive approach reduces the risk of disorderly exits and encourages non- resident investors to transition from “fast money” to long- term allocators. 10 Soumaré, S. et al. (2021). Capital market development in sub-Saharan Africa: Progress, challenges and innovations 11 Fines, O. and Chan, P. (Eds.) (2025). Capital Formation in Africa: A Case for Private Markets 12 Fines, O. and Chan, P. (Eds.) (2025). Capital Formation in Africa: A Case for Private Markets 13 Demekas, D.G. & Nerlich, A. (2020). Creating Domestic Capital Markets in Developing Countries: Perspectives fromMarket Participants Citi Perspectives for the Public Sector 59