International sukuk: Benin issues $500 million, a first in Africa

Benin successfully carried out an international fundraising of $850 million on January 22, 2026, marked by the inaugural issue of a $500 million sovereign Sukuk. A historic operation, the first of its kind for an African state, which demonstrates the country’s growing attractiveness to international investors and its strategy to diversify financing.

Benin announced on January 22, 2026, a total international financing operation of $850 million, structured around two bond issues. The main innovation lies in the inaugural issue of a sovereign Sukuk of $500 million, with a seven-year maturity. It is the first issue of this kind by an African state on international markets. This operation is complemented by a reopening of the Eurobond maturing in 2038, for $350 million.

The Sukuk was issued with a coupon of 4.92%, denominated in euros, thanks to a full currency hedging arrangement between the dollar and the euro. This mechanism helps stabilize the cost of debt service and limit the budgetary exposure to exchange-rate fluctuations. The reopening of the 2038 Eurobond was done on the same basis, with a coupon of 6.19% in euros. According to authorities, the conditions obtained are more favorable than those observed on the secondary market, in a global context marked by persistent rate volatility.

More than Eight Times Oversubscribed

Investor demand greatly exceeded the amounts sought. The order books reached over $7 billion, i.e., an oversubscription level of more than eight times the total issue. This mobilization involved a diversified investor base, including funds specializing in Islamic finance, mainly in the Middle East, as well as asset managers in Europe, North America and Asia. The entry of Gulf investors, attracted by the Sukuk’s Sharia compliance, marks a notable broadening of Benin’s creditor profile.

This operation is part of a forward-looking preparation strategy. Since 2025, Benin’s authorities have intensified meetings with international investors, notably in Doha, Abu Dhabi, Dubai and London. These discussions covered the country’s macroeconomic trajectory, the budget reforms implemented, and the desire to diversify external financing instruments.

Technically, the Sukuk rests on an international structure compliant with Islamic finance principles. The issue is backed by a vehicle specifically tasked with holding underlying assets and redistributing to investors income from activities considered licit, without recourse to an interest-based mechanism. Compliance with Sharia rules was validated by an independent supervisory committee, which issued formal certification. Authorities have not disclosed details on the exact nature of the mobilized assets, but indicate that the structure adheres to international standards, notably those of AAOIFI.

Refinancing the Debt

The funds raised will be allocated primarily to financing the 2026 budget, to refinancing existing maturities, and to improving the overall profile of public debt. The stated objective is to lengthen the average maturity of the debt, to reduce its cost, and to limit exchange-rate risks, rather than increasing the overall debt level.

On the macroeconomic front, the impact on the debt-to-GDP ratio is presented as contained. This operation continues the country’s prior international issuances, including a 500 million euro Sustainable Eurobond in 2021 and a 500 million dollar conventional bond in 2025. This coherence is meant to strengthen Benin’s credibility with institutional investors and rating agencies.

Beyond its national implications, this issuance also marks a milestone for African markets. By accessing for the first time the international Sukuk market, Benin opens the door to a broader use of Islamic finance by African states, as a complementary financing tool and a means of diversifying financial partnerships.