Like other Central Banks around the world, the Central Bank of West African States (BCEAO) has taken action to limit the damage of COVID-19 on the economy of the Economic Union and West African currency. In a statement sent to the press on Saturday March 21, the issuing institution of the 8 member states of the zone took 8 strong measures to limit the negative impact that this crisis could have on the banking system and the financing of the economic activity in the Union.

Here are these 8 measures taken by the BCEAO:

1. Increase the resources made available to banks to enable them to maintain and increase the financing of the economy. In this regard, an initial increase of 340 billion was made to the amount that the Central Bank grants each week to the banks, bringing it to 4,750 billion;

2. Expand the scope of mechanisms available to banks to access Central Bank refinancing. In this context, the BCEAO took the initiative to list 1,700 private companies whose bills were not previously accepted in its portfolio. This action will allow the banks to access additional resources of 1,050 billion and the companies concerned to negotiate and benefit from better conditions for their loans;

3. Allocate 25 billion to the subsidy fund of the West African Development Bank (BOAD) to enable it to grant an interest rate subsidy and increase the amount of concessional loans it will grant to States for the financing of urgent investment and equipment expenditure in the context of the fight against the pandemic;

4. Remind banks and make them aware of the use of the resources available on the special window for refinancing loans granted to small and medium-sized enterprises (SMEs/SMIs). This window, without ceiling, was created within the framework of the system set up by the BCEAO in agreement with the banks and the States to promote the financing of SMEs/SMIs in the Union;

5. Put in place, with the banking system, an appropriate framework to support companies affected by the consequences of the pandemic and which are encountering difficulties in repaying the loans granted to them. The BCEAO will ask the banks to grant the appropriate extension of deadlines, in particular to SMEs/SMIs;

6. Conduct negotiations with companies issuing electronic money with a view to reducing transaction costs and encouraging populations to make greater use of digital means of payment to better limit contacts and travel;

7. Supply banks with banknotes in sufficient quantity and quality, to enable them to ensure the satisfactory operation of automatic teller machines (ATMs);

8. Organize, if necessary, the rearrangement of the schedule for the issuance of public securities on the regional financial market. The Central Bank reaffirms its determination to take any other measures that may prove necessary, within the framework of its mission, to counter the harmful effects of the Covid-19 pandemic on the economies of the Union, the document noted. —