In an attempt to mitigate the adverse effects of the coronavirus pandemic, UEMOA member states, in collaboration with technical and financial partners, have validated a program known as “Covid-19 Social Bonds” raising CFA 1,172 billion in the process, APA can report.By Abdourahmane Diallo
This new instrument, set up by the UEMOA-Securities Agency, in partnership with the Central Bank of West African States (BCEAO), is expected to allow the member countries of the West African Economic and Monetary Union (UEMOA) to mobilize financial resources to enable them deal with emergencies related to the fight against the pandemic.
The “Covid-19 Social Bonds” are 3-month Treasury Bonds issued by auction at discounted rates less than or equal to 3.75 percent.
They benefit not only from access to the classic BCEAO window, but also from access to a special Covid 3-month refinancing window at a fixed policy rate of 2.5 percent over their lifetime.
According to the regional financial institution, the execution of the “Covid-19 Social Bonds” program during the months of April and May 2020 was a resounding success with the participation of 85 UEMOA investors, representing overall average issuing coverage of around 368 percent and a weighted average issuing rate of 3.1433 percent.
The dispersion of rates around this weighted average varies between 2.7574 percent and 3.5208 percent.
The significant level of mobilization of investors in a relatively short time demonstrates not only the commitment of the actors for the development of the UEMOA Public Securities Market, but also and above all, the high level of their social responsibility in the face of the magnitude of the health crisis rocking the world, the UEMOA-Securities said.
For the latter, the “success” of this Covid-19 Social Bond program confirms bright prospects through adapted reforms that will allow the deepening of the primary market ushering the birth of new products, but also a revitalization public securities of the UEMOA secondary market.