The health crisis that is currently shaking the world leaves the Central Bank of
West African States (Bceao) which, in a statement released on Saturday, announced measures
aimed at supporting companies, banks and WAEMU member countries to cope with the effects of the
Covid-19. In view of the negative impact that this crisis could have on the banking system and the
financing of economic activity in the Union, the BCEAO, which claims to follow, with the greatest attention,
the evolution of the pandemic, has decided to increase the resources made available to banks in order to
allow them to maintain and increase the financing of the economy.
As such, a first increase of 340 billion FCfa was made to the amount that the Bceao grants
each week to the banks to bring it to 4750 billion. Another measure, the institution has decided to expand the
scope of mechanisms available to banks to access central bank refinancing.
In this context, the Bceao has taken the initiative to list 1,700 private companies whose effects
were not previously accepted in his portfolio. This action will allow banks to access
additional resources of 1050 billion FCfa and the companies concerned to negotiate and
benefit from better conditions for their loans. The BCEAO also intends to allocate 25 billion
FCfa to the bonus fund of the West African Development Bank (Boad) to enable
to grant an interest rate subsidy and increase the amount of concessional loans
that it will grant to the States for the financing of urgent investment and equipment expenditure
in the fight against the pandemic.
In addition, the financial institution reminds banks and makes them aware of the use of available resources
on the special refinancing window for loans granted to small and medium-sized enterprises
(SME/SMI). This counter, without ceiling, was created within the framework of the system set up by the Bceao in
agreement with banks and States to promote the financing of SMEs/SMIs in the Union. The BCEAO has
decided to set up, with the banking system, an appropriate framework to support businesses
affected by the consequences of the pandemic and who are having difficulty repaying loans
which have been granted to them. The Bceao intends to ask the banks to grant the deferrals
deadlines, in particular for SMEs/SMIs. It also intends to conduct negotiations with the
electronic money issuing companies with a view to reducing transaction costs and encouraging
populations to greater use of digital means of payment to better limit contact
and travel.
Issuing institution promises to supply banks with banknotes in sufficient quantity and quality
to enable them to ensure the satisfactory operation of automatic teller machines
(Gab). It does not, however, rule out organizing, if necessary, the rearrangement of the schedule for issuing
public securities on the regional financial market. The Central Bank reaffirms its determination to take all
other measures that may prove necessary, within the framework of its mission, to counter the adverse effects
of the Covid-19 pandemic on the economies of the Union.
Ndongo Kamara, chartered accountant and associate director at Nkac & Audit conseil, is nuanced
in the face of the measures announced by the BCEAO. According to him, these decisions are more favorable to the system
banking and business. On this, he indicates that it is now up to the banks to play the game by
passing on these decisions to businesses and SMEs/SMIs. Hence his appeal to the Bank
central office which must monitor the execution of these measures. Mr. Kamara adds that the issuing institution would benefit from extending the measures to the Decentralized Financial System (Sfd) which also works with a good part
smes. The latter are, according to him, the most threatened by the crisis, especially since they are less solid
than major companies. “With their high level of risk, these SMEs are not very lucky
to access bank loans. If the Sfd benefit from these assistance from the Bceao, they will have the possibility
to postpone the repayment deadlines of their customers", underlines the chartered accountant. He invites,
elsewhere, the Directorate General of Taxes and Domains (DGID) to play its part in this effort to
solidarity in favor of companies and SMEs, especially in this period when many tax operations
are carried out. Indeed, recalls Ndongo Kamara, the second installment of corporate tax (Is) and
the declarations of the Remittance of withholding tax (Vrs) and withholding tax slip (Brs) are
made before April 15. In addition, the filing of the financial statements must be made no later than the
April 30. “Given the current situation, we would benefit from pushing back the tax deadlines and using
the money owed to the tax authorities to pay salaries,” advocates Mr. Kamara.
Meeting in extraordinary session by videoconference on March 20, 2020, the Council of Ministers of the Union
West African Economic and Monetary Union (UEMOA), in its final communiqué, examined the repercussions
economic and financial effects of the global Covid-19 pandemic on the countries of the Union. According to the instance,
this situation will result in a decline in economic growth, an increase in unemployment and
negative impacts on several sectors of activity, in particular tourism, transport, construction, trade,
industry and the financial sector. Faced with this worrying situation, the ministers discussed the measures
to be taken at community and country level to support economies and enable them to
overcome the effects of this shock. In this regard, they underlined the determination of Governments to take
all the necessary measures to overcome the pandemic and limit its negative effects on the population and on
the economy.
The Council says it has taken note of the measures proposed by the Community bodies and institutions to
support the efforts under way in the Member States. Ministers welcomed the scale of the
measures envisaged, in particular to support companies in difficulty and support countries in the
pandemic management. They encouraged Community bodies and institutions to implement
of the proposed measures and to inform economic agents and the public of them through the usual channels. The
Ministers have decided to follow, with the greatest attention, the evolution of the Covid-19 pandemic in the
Member States and to meet, if necessary, in order to assess any additional measures to
counter its effects on the economies of WAEMU.