(Ecofin Agency) - While raising funds remains essential to finance budget deficits and infrastructure spending, the ongoing high interest rates may significantly strain these countries' repayment capacities.

Between Jan. and Sep. 2024, the member countries of the Sahel States Alliance (AES)—Burkina Faso, Mali, and Niger—raised about CFA1,866.5 billion (around $3.12 billion) on the regional WAEMU market. These nations are facing significant security and economic challenges, which is reflected in their need for financial support. They account for 34% of the total amounts raised in the UEMOA public securities market, according to data compiled by the Ecofin Agency.

Burkina Faso stands out with CFA635.79 billion raised, demonstrating a strong presence on the debt market and representing 13% of regional issuances. However, the country continues to grapple with high interest rates, with yields reaching 9.54% for 12-month maturities. This is significantly higher than rates in economies like Côte d'Ivoire or Benin, where rates typically range between 6% and 7% for similar terms. On top of that, Ouagadougou has already repaid CFA388 billion, maintaining its debt level on the market at CFA2,061.86 billion. With 12.55% of the region’s total debt, Burkina Faso ranks among the top borrowers in the union.

Mali is in a similar boat. Bamako raised CFA528.95 billion, accounting for 12% of the total raised on the WAEMU market during the same period. Despite managing repayments carefully—totaling CFA501.15 billion during the nine months—interest rates remain stubbornly high. For short maturities, yields climb to 9.73% for six months and stay above 9% for maturities of up to three years. Mali’s current debt is CFA1,989.63 billion, which makes up 12.12% of the region's total debt. The country is navigating an uncertain economic and political landscape, where borrowing costs reflect investors’ cautious stance amid ongoing internal tensions.

Niger has raised CFA701.76 billion in 2024, marking a notable comeback after a six-month absence due to ECOWAS sanctions. However, the borrowing conditions are even tougher. The country faces rates that reach 10.40% for 12-month maturities, making it one of the highest financing costs in the region. Although Niger's debt level of CFA1,432.31 billion represents a modest share (8.72% of regional debt), accessing financial markets has become increasingly challenging. The nation is dealing with growing needs for security and infrastructure, placing it in a difficult position where urgent short-term financing needs clash with budgetary constraints imposed by high rates.