Tiémoko Meyliet Koné, Governor, the Central Bank of West African States (Banque Centrale des Etats de l’Afrique de l’Ouest, BCEAO): Interview

Tiémoko Meyliet Koné, Governor, the Central Bank of West African States (Banque Centrale des Etats de l’Afrique de l’Ouest, BCEAO)

Interview: Tiémoko Meyliet Koné

How will Basel II and III impact the economy?

TIÉMOKO MEYLIET KONÉ: The transition toward Basel II and III aims to preserve a solid and resilient banking system across the West African Monetary Union (WAMU) region. The adoption of Basel II and III makes allowances for shifts in the regional and international financial sector, characterised by the diversification of banking products, the expansion of international banking groups’ activities and the increase in pan-African banks.

All institutions subject to this reform have put in place project teams, and several of them have carried out quantitative impact studies to evaluate their capital needs with regard to the implementation of these policies. These reports indicate that certain financial establishments are being accompanied by banking software editors to ensure compliance of their information systems. Parent company resources and external consultants also assist them throughout the steering of the project and the updating of policies and procedures.

The BCEAO is initiating several actions from June 2016 through to December 2018 to ensure the success of the reform. The central bank will guide financial establishments towards meeting their obligations by putting outreach and training programmes at the forefront of our initiatives. Outreach efforts include opening various communication channels to allow regular exchanges with stakeholders. In this regard, the Supervised Support Programme for Financial Institutions was launched in August 2017, which consists of video conferences aimed at ensuring better coordination with concerned establishments. Training sessions with the BCEAO and the Centre Africain d’Etudes Supérieures en Gestion are also envisaged.

The implementation of Basel II and III will contribute to reinforcing the capital basis of banks, therefore ensuring the solidity and resilience of the sector in relation to factors such as financial crises, financial transparency, the sound financing of the Union’s economy, and better control of all types of financial risks.

What measures have been taken to ensure the adequate regulation of digital banking activities?

KONE: By December 2016, 33 financial services had been deployed via mobile in the WAMU, or over 11% of the 271 available in sub-Saharan Africa. This includes 26 partnerships between banks and telecommunication operators, two microfinance institutions and five electronic money establishments. During 2016 over 36m users of financial services via mobile have made 716.6m transactions estimated at CFA11.3trn (€17bn). The average value of daily transactions amounted to CFA31.5bn (€47.3m) by December 2016, up from CFA20.6bn (€30.9m) in 2015. To accompany this upward trend, several initiatives have been taken on the regulatory front. These include legislation to better define conditions and procedures for issuers of electronic money and introduce new regulations aimed at promoting the activity, reinforce competition, secure transactions, and protect clients. The BCEAO has also proceeded to study the level of conformity with regulations and risks associated with new products.

How has the West African CFA franc’s peg to the euro affected economic development?

KONE: Since 2012, with the return of political stability and investment efforts to develop infrastructure, the WAMU has registered average growth of 6% against an average of 4.5% in sub-Saharan Africa, despite an unfavourable international context, a weak global economy and a persistent drop in commodity prices.

Moreover, WAMU boasts the best results with regard to price stability compared to the rest of sub-Saharan Africa. Average inflation over the last five years reached 1% against a 7% average in the region. These factors reveal that this peg does not constrain the development of the economies in these countries. As a whole, the fixed parity of the franc with the euro serves to ensure the stability of our currency, while also ensuring the absence of currency crises as well as low inflation.


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The Report: Côte d'Ivoire 2018

Banking chapter from The Report: Côte d'Ivoire 2018

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