The first quarterly consultation meeting for the year 2023 between the National Directorate for Benin of the Central Bank of West African States (BCEAO) and the Managing Directors of credit institutions was held this Friday, March 24, 2023 in Cotonou. Three main points were discussed at the meeting. A press briefing with economic journalists was organized at the end of the exchanges by Mr. Emmanuel ASSILAMEHOO, National Director of the BCEAO and Mr. Lazare NOULEKOU, President of the Professional Association of Banks and Financial Institutions of Benin (APBEF).
The state of the national banking system at the end of December 2022; the situation of the repatriation of export earnings and the measures initiated by credit institutions with regard to exporting companies; the implementation by credit institutions of vigilance measures and reporting to the National Financial Information Processing Unit (CENTIF) of suspicious AML/CFT transactions. These are the three points discussed between the ND of the BCEAO for Benin and the general managers of the credit institutions.
Among the three main points discussed, what has focused the minds concerns the results of the repatriation of export earnings to the place at the end of December 2022 which were presented by the Professional Association of Banks and Financial Institutions of Benin (APBEF). Indeed, according to the results, the rate of collection of receipts by companies stood at 89.4% instead of the 100% required by the texts in force. Credit institutions have been sensitized with a view to inducing companies to reach this rate. In the meantime, transfers for external payments in foreign currencies from companies in default of repatriation of export earnings will no longer be executed by banks and the BCEAO. In addition, the sanctions provided for in the matter by the law in force will be taken against the companies in breach. It should be noted that the law punishes the company with a fine, the minimum of which is equal to the amount of the value to which the offense or attempted offense relates and the maximum is twice the amount of the value, without prejudice the application of the same penalty to representatives of the company as perpetrators or accomplices in the same acts (Article 45 of the law on the litigation of offenses against the Regulation of external financial relations of WAEMU member States). Thus, proceedings will be taken in Benin against companies in breach of this regulation.
Increase in bank loans
This first quarterly consultation meeting between the National Director of the BCEAO and the General Managers of credit institutions, for the year 2023, made it possible to take stock of financial support for companies. With regard to the state of the banking system, the indicators revealed that the activity of credit institutions increased overall during the 2022 financial year. The total balance sheet consolidated by 12.56%, posting at 5,924.5 billion CFA francs against 5,263.3 billion at the end of December 2021. Bank loans grew by 33.04% to 2,627.4 billion against 1,974.8 billion in 2021. They notably benefited the sectors “Buildings, public works” and “Wholesale/retail trade and restaurant”. The quality of the market’s portfolio continued to improve. Indeed, the gross portfolio deterioration rate in Benin stood at 7.18% at the end of December 2022 against 16.7% a year earlier. This rate is lower than the average of 8.4% recorded in the Union during the same period. In addition, the market emerged globally solvent with a solvency ratio of 14.65% for a required standard of 11.250% minimum. However, credit institutions have been asked to be vigilant with regard to the evolution of their cash deficit and the debit rate applied to customers.
What about the fight against money laundering and the financing of terrorism?
On examining the third point, the BCEAO listened to the Managing Directors of credit institutions on the measures taken within them to comply with their obligations in the fight against money laundering and the financing of terrorism, in particular in with regard to the regularity and exhaustiveness of the declarations of suspicious transactions to the CENTIF. In addition, during the session, the managing directors were also made aware of the effect of avoiding any speculation on the new orientations of monetary policy in the Union and on the decisions to normalize the regulation of liquidity by the Central Bank at its counters. This first meeting was an opportunity for the Central Bank to listen to the specific concerns of the banking profession and the constraints faced by financial players in Benin.
Abdul Wahab ADO
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