Oulimata Ndiaye Diasse said states in the eight-nation West African and Monetary Union (WAEMU) sought cheaper rates compared with international markets to finance budget and infrastructure projects.
Benin, Burkina Faso, Guinea-Bissau, Ivory Coast, Mali, Niger, Senegal and Togo, which make up the monetary union, together raised 1,590 billion CFA Francs ($2.61 billion) in the first three months of the year.
Diasse said that, although average interest rates on the regional market had increased by around two to three points compared with last year due to increased risks following coups and political turmoil in the region, it was still easier for the states to access the market.
"Access to international markets has been closed in recent years for our states. The cost of borrowing, which was extremely high, strongly discouraged large issuers such as Ivory Coast, Senegal and Benin, forcing them to depend largely on the regional market," Diasse said.
Regional economic powerhouse Ivory Coast led debt issuance with around 674.55 billion CFA Francs ($1.11 billion) raised.
It returned to the international Eurobonds market in January after two years, raising $2.6 billion in an issuance that was oversubscribed.
Diasse added that the states are expected to tap the market in the next three quarters for a further 5,500 billion CFA francs ($9 billion) in fresh issuance of short-term maturities but with slightly higher interest rates.
The political instability in Niger, Burkina Faso and Mali has contributed to the increase in interest rates.
"All these geopolitical crises in the sub-region create uncertainties that led investors not to come to our market, or to demand higher returns," she said.
The three countries have together witnessed five military coups since 2020. Niger was sanctioned and suspended from the regional market after a military coup in July last year.
The sanctions forced it to default on debt in the regional market totalling around $520 million. The sanctions were lifted in February.
In a separate statement on Friday, UMOA-Titres said that Niger had initiated plans to repay its debts, starting with the payment of at least half of the interest it owed as of Friday April 26.
It added that Niger was also considering a special issue of securities with short and medium term maturities, which would be used primarily to clear the capital it owed.