As Serge Ekué emphasized last November, securitization is "the only operation" that can help increase the balance sheet of local banks tenfold, an excellent tool that "will enable us to improve the contribution of the financial sector to national development plans.”

The Banque Ouest Africaine de Développement (BOAD) just launched a securitization operation of $246 million (or CFA150 billion). The operation extends from March 20 to April 3, 2023.

Specifically, the securitization operation involves converting sovereign loans that the Bank granted its member States into negotiable securities on the regional financial market. The operation should help the BOAD quickly raise funds to partly finance part of its 2021-2025 Djoliba plan, a strategic investment program, according to Adji Sokhna Mbaye, Director of BOAD Securitization. 

The BOAD Securitization was specially created to combine financial claims or debts into a single package and convert the latter into marketable securities. It is in charge of managing receivables securitization mutual funds (FCTC).

The entity’s boss, Adji Sokhna Mbaye, said the funds raised through the securitization will be spent on key projects that are likely to improve employment, road construction, the GDP of States, and boost the production of clean water, rice, energy, as well as curb CO2 emissions.

Mbaye further noted that the recently-launched operation has one of the best risk-to-return ratios on the market. Also, she stressed, the underlying receivables benefit from a privileged status with a very high seniority and an AAA rating. This means that they have priority in case of default. Given that the BOAD is the only bank with an investment grade rating in the WAEMU, investors should trust it more.

Moreover, with the presence of a junior tranche of 1% subscribed entirely by BOAD, which is a category of securities with a lower priority in the order of repayment than the senior tranches, the Lomé-based institution indicates that it wants to strengthen the alignment of interests with investors.

Adji Sokhna Mbaye also revealed that a minimum 5% reserve account will be set up to protect investors against unexpected losses on the underlying sovereign debt. 

All these incentives should, according to the BOAD, attract regional investors who "are looking for investments with stable and predictable returns, which is a perfect fit for the characteristics of this operation."

Three management and intermediation companies (SGI Togo, Impaxis Securities, and NSIA Finance) have been selected to form the consortium responsible for placing the bonds (securities) on the regional financial market at an annual rate of 6.10% for a maturity of 2.8 years (84 months).

Good timing?

Does the BOAD’s operation have a chance of succeeding? Especially in the current regional context marked by liquidity stress? The concern is also justified given the recent cancellations of issues on the regional debt market. For example, Benin and Mali recently postponed their latest issues on the public securities market, a day before deliberations.

Answering the question, Kokouvi Etsè, the General Manager of SGI TOGO, one of the three SGIs retained for the operation, declared: "The BOAD is a benchmark issuer on our financial market and all investors interested in diversification always want some of its securities in their portfolios. The securities are issued via a securitization vehicle of sound receivables of BOAD on States [...] given its signature quality, the previous issues of BOAD have been sold and closed successfully on the regional financial market.”

Containing debt ratio

This operation enables the BOAD to raise additional funds without resorting to debt. This is because the Lomé-based Bank wants to increase its equity, to meet the financing needs induced by government development projects, as well as the needs of the private sector–projects that are at the heart of the BOAD’s Djoliba plan. 

There is also the Bank’s debt ratio which reached 250% in 2019 – a rate that Serge Ekué has been striving to contain since he took over the lender’s helm.

Increasing equity should, however, make things easier for the Bank. At present, the institution needs a capital increase of CFA554 billion to mobilize a total financing of €5 billion over the period 2021-2025 which is necessary to implement its roadmap. 

Fiacre E. Kakpo

The Togolese government held last Tuesday, March 21, a meeting with actors in the local finance industry. The goal was to encourage the actors to support the country’s issues on the WAEMU market more. 

"I would like to ask the President of the Professional Association of Banks and Financial Institutions of Togo (APBEF-Togo) to urge banks to further support the Treasury in the mobilization of resources on the regional market of public securities," Pré Simfeitcheou, the Presidential advisor and minister, said as he was chairing the meeting. 

Simfeitcheou stressed the importance of having the Togolese more involved in the financing of Togo’s economy. 

So far this year, the Togolese treasury has raised CFA103 billion on the regional money market. This is about a fifth of its annual target–CFA574 billion. The proceeds are used to finance the national budget which stands at CFA1,957 billion. 

Esaïe Edoh

Following the recent work visit of Niger’s President in Togo, the two countries have decided to create a mixed cooperation commission to boost their relations in various sectors. 

The commission will mostly focus on security and transport issues. It will hold its first meeting in the last quarter of this year, in Lomé. 

Ahead of the commission’s operationalization, however, the ministries of transport, trade, and finance of the two nations will hold a meeting in Niamey next month. The preliminary encounter will focus on issues related to goods transport and the Lomé-Niamey corridor. 

Another meeting will follow, in Niamey again, but between the ministries of security and defense of Togo and Niger. On the occasion, participants will share their experiences in fighting against terrorism and extremism.

By establishing the new commission, Togo and Niger are committed "to working together to ease the free movement of people and goods within ECOWAS and to the full realization of goals of the African Continental Free Trade Area (AfCFTA)." They are also committed to fighting transnational organized crime, terrorism, and illicit trafficking, which they both face.

Esaïe Edoh 

The Port Management Association of West and Central Africa, PMAWCA, is holding a meeting in Lomé, Togo, on March 21-24. 

“Finance experts and legal affairs practitioners in ports will reflect on key issues like a follow-up of port concessions, procedures of liaising portions of ports domain,” the Association wrote on its website. 

The meeting aims to bolster regional cooperation relative to port management and port competitiveness. This is in a context where the port of Lomé is among the top 100 ports in the world, the fourth best port in Africa, and the first in West Africa, in terms of container traffic. 

The PMAWCA was established in October 1972 under the auspices of the Economic Commission for Africa (ECA). It covers ports in West Africa, Mauritania, and Angola. It takes into account a coastline of about 12,000 km and ports that handle about 300 million tons of maritime import/export trade for the subregion (excluding crude oil).

In 2018, the number of members of the association was 40, up from 9 in 1972. 

Ayi Renaud Dossavi

Togo and South Africa are working on bolstering their relationship. Last Thursday, the two sides opened a meeting to this end. The meeting was held between a ministerial delegation from South Africa and the Togolese ministry of investment promotion. 

Specifically, both sides are working on action plans for investment projects to develop in Togo. Projects of interest fall under Togo’s 2025 government roadmap and they are in the following sectors: agribusiness, energy, water, telecom, roads, ports, and airports infrastructure.

According to the ministry of investment promotion, the South African initiative will restart cooperation between the two countries, after it slowed due to Covid-19. 

The meeting follows many similar ones held with investors from Africa, Europe, and Asia. It aligns with Togo’s ambition to attract more investors and contribute to its economic development.

Esaïe Edoh

The Yoto III municipality in Togo needs CFA4.16 billion to implement its development strategy over the next five years. The strategy was validated on March 15, 2023, in Gboto Vodoupé, the head district of the municipality. 

The funds, according to the municipal council, will finance agricultural and entrepreneurial projects. They will also help improve the quality of social services and boost environmental management, social cohesion, governance, and local finance management. 

To get the money, the local authorities plan to partner with companies and international organizations that operate in Togo. 

Already, the municipality can count on Lome Multipurpose Terminal (LMT), Scan Togo, the International Organization of the Francophonie (IOF), and the Etablissement de Travaux Géologiques et Miniers (ETGM as they contributed to the strategy’s elaboration. 

Esaïe Edoh 

Green Industry Plast-Togo (GIP) won Challenge Works’ Afri-Plastics Challenge. The Togolese company won £1 million to scale its plastic waste collection, sorting, and recycling solution. 

GIP is one of the nine teams of innovators from sub-Saharan Africa to which Challenge Works awarded a package of £4.1 million in the final stage of its contest, which was held on 13-16 March 2023 in Nairobi, Kenya. 

Launched in July 2021, Afri-Plastics Challenge was organized alongside the Canadian government. It received 1,141 entries from sub-Saharan Africa.

The Challenge registered 1,141 entries from all parts of Africa. The final stage occurred on 13-16 March 2023 in Nairobi, Kenya, with 240 projects selected. 

GIP Togo and its promoter, Bemah Gado from Togo, were among the three finalists that won the prize under the strand “Accelerating Growth”. The other two were Chanja Datti from Nigeria and Mega Gas from Kenya. They were respectively awarded £750,000 and £500,000.

With the help of local authorities, GIP-Togo set up plastic waste collection units and sorting facilities in Togo's main cities. The waste collected is recycled.

Since it was launched in 2017, GIP Togo has been backed by the Support Fund for Youth Economic Initiatives (FAIEJ). The latter also backed its participation in the Afri-Plastics Challenge. 

Ayi Renaud Dossavi