SERGE EKUE
PRESIDENT OF THE WEST AFRICAN DEVELOPMENT BANK (BOAD)
1. Can you introduce Serge EKUE, President of WADB, to our readers?
I was appointed on August 18, 2020, by the WAMU Council of Ministers, after the favorable opinion of the Assembly of Heads of State and Government of WAMU, for a six-year term. I took office on August 28, 2020.
Prior to joining WADB, I served as Natixis’ Corporate and Investment Banking (CIB) Country Manager for the UK in London starting from 2016. I combined this responsibility with that of Market Solutions for Europe, the Middle East and Africa (EMEA), and I was also in charge of the Africa and Russia Departments of Natixis.
I also had the opportunity to manage the entity in charge of Natixis’ Market Activities for the Asia-Pacific zone for nearly six years, between 2010 and 2016, before assuming the General Management of the bank based in Hong Kong. It is therefore with twenty years of experience in international finance, structured finance and capital markets that I am taking the helm of WADB, our community development finance institution.
I am of Beninese nationality and hold an Executive MBA from HEC Paris, an advanced postgraduate degree in Banking and Finance from Paris V, and a diploma from the Institute of Political Studies in Bordeaux.
2. Mr. EKUE, you were elected to head the WADB in August 2020. What are the priorities of your mandate?
WAEMU economies are facing major development challenges. Our mission is to help them face those challenges by supporting various national and regional investment programs and private projects that promote growth and create jobs. Our aim is to mobilize the institution’s full potential so as to maximize the impact of our interventions on the preservation and creation of jobs, integration as well as the structural transformation of our sub-region. This ambition is enshrined in our 2021-2025 strategic plan, known as “Plan Djoliba”, presented to the Board of Directors and then adopted by the WAMU Council of Ministers in September 2020.
In order to respond appropriately to the growing investment needs, especially in the current context marked by the COVID-19 health crisis, our mandate will place a high priority on strengthening the Bank’s equity in order to further improve our capital adequacy and enhance our debt capacity. This seems fundamental if we are to maintain or even improve our investment grade and raise more resources on the international financial market at competitive terms for the recovery of our economies.
In addition, we will continue to focus our activities on five key sectors: energy, infrastructure (including ICT), agriculture and food security, health and education, and real estate, in particular social housing and quality hotel infrastructure. Emphasis will be placed on adequate coverage, particularly through the local financial system, of the financing needs of micro, small and medium-sized enterprises (MSMEs) to diversify the economic fabric and create jobs.
3. By virtue of your profile and your professional career, you are a market expert and therefore no stranger to the challenges of the sub-region’s financial market. Can you share with us some of these challenges and the position of WADB with respect to them?
The regional financial market is expanding. As of November 30, 2020, it had a market capitalization of XOF 9,650.12 billion, up 7.54% compared to the end of 2019. Notwithstanding this favorable development, many challenges remain, the most urgent of which are the reforms needed to enable the stock market to play its full role in serving the economies of our Union. These include the expansion of the investor base, the development of the secondary market, the issuance of new products, the harmonization of taxation as well as the increasing use of new information and communication technologies (NICT) in financial and market activities.
When it comes to broadening the investor base, it is important to work on the development and the promotion of the stock market culture within the Union and to attract new investors on our market. To that effect, discussions are underway, jointly with UMOA-Titres, in order to attract new investors to our market, in particular those outside the zone.
The attractiveness and Euroclearability of securities will stimulate competition thereby increasing the likelihood of lower rates.
This initiative will also enable the development of the secondary market, offering local investors the opportunity to trade financial instruments with a wider range of investors, including international investors.
The extension of bond maturities could pave the way for the issuance of project bonds.
As far as the use of NICTs is concerned, I am delighted with the operationalization in September 2020 of online stock exchange services, which constitute major progress on our market. This innovation should enable increased fluidity of transactions while reducing related costs. However, efforts must be pursued in order to popularize this tool.
As far as WADB is concerned, it will continue to play a structuring role in the development of the regional capital market thanks to its mission to provide long-term financing to States and the commercial sector for greater wealth creation within WAEMU.
4. We know that you are a member of UMOA-Titres’ Advisory Board (the institution’s primary governance body) in the same capacity as the Directors General of the Treasuries of WAEMU States and the Governor of the Central Bank (BCEAO). What are the relations between the West African Development Bank and UMOA-Titres?
WADB has been a member of the UMOA-Titres’ Advisory Board since its creation.
As such, it takes an active part in its work and shares its experience of financial markets.
The two institutions have been working hand in hand for several years on various topics related to market activities, including the yield curve and offshore issues in CFA franc.
5. The health crisis linked to COVID-19 has affected several economies around the world, including countries in the sub-region. As a capital market expert and WADB President, what solutions would you propose to revitalize the economies of the sub-region?
The health crisis, coupled with lockdown measures, have severely affected economies in West Africa, particularly in the WAEMU zone. The latest estimates predict a significantly lower growth rate of 0.7% in 2020, compared with 5.9% in 2019.
I would like to remind you that community institutions reacted very quickly to help Member States deal with the crisis. For its part, WADB urgently disbursed XOF 200 billion in soft loans to Member States and set up a XOF 100 billion credit line program for banks to refinance MSMEs and microfinance institutions (MFIs). Efforts already undertaken will continue to support economic recovery. Three main actions seem necessary to revitalize the economies of the zone, namely:
- Enhance resource mobilization, by diversifying sources in particular and improving tax revenue collection and access to international capital markets;
- Build and maintain support for the financial system, particularly for banks and MFIs, so that they can adequately meet the investment and cash flow needs of businesses, especially MSMEs (formal and informal), which make up the bulk of the industrial fabric;
- Support the implementation of response and recovery plans while ensuring that investment spending is more efficient and takes into account the basic needs of the most vulnerable groups, particularly young people and women. This investment spending should also serve as a lever to mobilize more resources for the private sector. Particular attention should be paid to economic sectors most affected by the health crisis (tourism, transport, catering, etc.).
6. As part of the economic recovery of WAEMU Member States, The Central Bank (BCEAO) in collaboration with UMOA-Titres has implemented a COVID-19 Social Bills program in order to meet the immediate cash flow needs arising from this pandemic. What is you assessment of this initiative?
BCEAO and UMOA-Titres should be commended for the measures taken to support Member States in raising low-cost financial resources on the regional financial market. This initiative is to be commended and encouraged insofar as it has made it possible to mobilize domestic resources (especially savings in the zone) to serve our economies. Indeed, the States have been able to issue Treasury bills known as “COVID-19 Bills”. The financing put in place has helped them meet urgent expenditures and sustain their economies.
7. The Government Securities Market has been resilient during this period of pandemic and is raising increasing amounts of funds. From 2014 to 2019, the annual volume of government securities issued, rose from XOF 2,516 billion to XOF 3,420 billion. For 2020, we are heading for more than XOF 5,000 billion (excluding “COVID-19 Bills”). All this shows the dynamism of this market. What is your assessment of the progress WAEMU government securities market has made and what recommendations do you have for market players?
As you have noted, the Government Securities Market is booming with strong growth in sovereign debt. I would like to congratulate UMOA-Titres for its dynamism and professionalism, which have made it possible to effectively manage the issuance programs for the eight States of the Union.
The funds raised have enabled our States to cope with the Covid-19 pandemic,
to finance their recovery projects and their ambitious development programs. This momentum should be maintained while reinforcing the synergy that already exists between various market players.
8. Your final word to our readers?
I would like to echo our gratitude to the highest authorities of WAEMU for the confidence and strong support that WADB enjoys. I would also like to reassure citizens of each country of the Union of our determination to work tirelessly for the continuous improvement of their living conditions. To this end, and as part of the implementation of the “Djoliba Plan”, we will ensure that for the current five-year period (2021-2025) we strengthen the impact and quality of our investments so that they contribute more to job and income creation.
