WAEMU States will issue Covid-19 bonds to curb the economic impacts of the pandemic

Public finance

Thursday, 23 April 2020 16:19

WAEMU States will issue Covid-19 bonds to curb the economic impacts of the pandemic

(Togo First) - To curb the negative impacts of the Covid-19 pandemic, all eight WAEMU States will issue treasury bonds baptized Covid-19 bonds, with the support of the Central Bank of West African States (BCEAO).

According to a statement dated April 21, 2020, the bonds will have a maturity period of three months and will be issued on the regional financial market. Funds raised will take care of immediate spending related to the pandemic in the various countries concerned.

Besides the BCEAO, the UMOA securities agency will support the issuing States. In detail, a special desk will be opened at the apex bank to allow banks to refinance the bonds for three months. Lenders will be able to get cash from the issuing institution at a fixed rate of 2.50%.

The Covid-19 bonds can be refinanced from the day they are issued and no later than one month after their acquisition for the remaining term of the security.

This mechanism is one of many deployed by the BCEAO to help its member States fight against the Coronavirus, and mainly reduce its economic impacts which could be worse than those related to health.

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