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Central Bank of West African States
As part of its vast program to repurchase public debt securities, which is in its second phase, the Central Bank of West African States (BCEAO) plans to inject 993 billion FCFA into the economy of the UEMOA zone between September 25 and 26. The first was held last June 2023. Togo, a member of the union, will thus see 100 billion FCFA of its securities repurchased during this operation. Benin will see how many billions of FCFA of these securities repurchased? This operation by the Central Bank only in reality benefits States in the repurchase of public debts. What do the people actually gain because nothing changes in daily life? To these various concerns, Mr. Didier NOUKPO, Director of the Studies and Statistics Department of the Central Bank in Benin, provides some clarifications.
In the opinion of the Director of the Studies and Statistics Department of the Central Bank in Benin, this operation is effective. It was launched on September 25, 2023. Submissions were collected until September 26 and the value date is September 29.
As part of the operation, the amount for Benin is 80 billion FCFA and the public securities concerned have a maturity of between 3 months and 3 years.
In terms of advantages, it should be noted that one of the objectives of the operation is to improve the liquidity of banks and in return allow them to have more leverage to finance the economy, as well as the States (in priority) than the private sector. By making the banking system a little more liquid through this channel, without carrying out a new monetary issue, the Central Bank also aims to reduce the exit interest rates for issues of public securities for the States and also partially amortize the tightening of private sector financing conditions.
More precisely, the benefits for the population arise from the consolidation of the State treasury, which will promote: the continuity of payment of salaries; the payment of suppliers and service providers (current invoices and arrears if applicable) who in turn will pay remuneration to their employees. “They and civil servants will also purchase goods from other businesses and households” ; new public orders addressed to large, medium and small businesses, which will call on additional labor; the regulation of social expenses (education, health, subsidies for the prices of basic necessities, etc.).
Finally, a significant part of these resources mobilized by the Public Treasury and paid to households and businesses as remuneration will strengthen bank deposits and allow banks to have additional liquidity to finance the economy via businesses and households.
