Banque de l'Afrique Occidentale

Not to be confused with Bank of British West Africa.

Former BAO head office at 38, rue La Bruyère in Paris

The Banque de l'Afrique Occidentale (BAO, lit. 'Bank of Western Africa'), known from 1853 to 1901 as Banque du Sénégal and from 1965 to 1990 as the Banque Internationale pour l'Afrique Occidentale (BIAO), was a bank headquartered in Dakar. During most of its history it was the main commercial bank and bank of issue in French Senegal and French West Africa. Following independence in 1960, it remained a major financial institution and was present in 17 African countries by the late 1980s, when it experienced financial turmoil and was eventually dismantled in a restructuring led by the Banque Nationale de Paris.

Banque du Sénégal

The Banque du Sénégal was founded by decree of Napoleon III of 21 December 1853, which established it as a discount and credit bank. It started operations in 1855 in Saint-Louis, by then the capital of French Senegal, under the rule of governor Louis Faidherbe. In 1867 the bank opened an agency in Gorée, the region's other trading center under French rule. In 1884, Dakar had became increasingly important and the bank transferred its head office there from Saint-Louis. In 1899 it opened a branch in Rufisque, the last of the colony's so-called Four Communes.

The bank's ownership structure was based on the number of slaves owned or sold at the time of the legislation of 30 April 1849 which settled compensation following the abolition of slavery. The Bordeaux trading house Maurel bought shares from others and ended up holding 73 percent of the bank's capital, the other shareholders being five houses including Teisseire and Beynis, the Marseille house Charles Bohn, and five mulattoes.

The bank was granted the privilege to issue bearer banknotes for 20 years, renewed in 1874. However, at the beginning, commercial exchanges continued to be settled with convenience currencies or traditional means of exchange: gold powder, cowrie shells, iron bars, Maria Theresa thalers or silver piastres of the same weight, cotton loincloths, blocks of compressed rock salt, among others.

After 1894, the issuance privilege was only renewed from year to year. The bank had opted not to expand its activity beyond French Senegal, while the French Government wanted a bank capable of issuing money for all its sub-Saharan African colonies.

Banque de l'Afrique Occidentale

New main office of the BAO in Dakar, ca. 1904

In 1901, the Banque du Sénégal was reorganized and its incorporation formally relocated from Dakar to Paris, following the previous year's similar relocation of the Banque de l'Algérie. It was granted a role of bank of issue with a geographical scope widened to all French West Africa. From 1901 to 1919 it was the only bank active in French West Africa, whereas in French Equatorial Africa there was barely any banking activity at all.

Its network continued to expand, to Conakry in 1902, Porto-Novo in 1903, and Grand-Bassam in 1905. In 1903, a new building was erected on the Kermel square in Dakar.

The BOA played a significant role in the assimilation of French West Africa into the broader French economic system. Its founding in 1901 came after the extension of limited taxation of subjects, forced labor laws, and voting in the colonial possessions (notably the communes of Dakar and Saint-Louis, Senegal). In 1904 it was given the right to acquire shares in commercial companies, as long as investment did not exceed a quarter of its reserves. Although it was a private investment bank, the French government authorized it to print currency, and its board always included colonial officials. It received special concessions and financial stabilisation from the government, and in essence became the financial arm of the French colonial administration.

In 1880, almost all French economic interests in the area were in the form of family-run trading houses based in French port cities like Bordeaux and Marseilles. The creation of the BOA coincided with the consolidation of these trading houses into joint stock companies, the ending of formal government concessions to these houses, and the rise of a de facto monopoly of their successors. Émile Maurel (CEO of Maurel et Prom) and Henri Nouvion (managing director of Banque du Sénégal) were respectively the first president and managing director of the newly created BOA. By the 1920s, business in the AOF was dominated by just three private joint stock companies: the Compagnie Française de l'Afrique Occidentale, the Nouvelle Société Commerciale africaine, and the Société Commerciale de l'Ouest Africain (lagging slightly were the growing plantation and mining interests of the Unilever company). The BAO's board largely overlapped with the boards of these trading companies. Banking institutions, public and private, enabled colonial businesses to pull more of the West African economy into a moneyed economy and expand the replacement of traditional agriculture with large scale cash crops for export. This was most evident in the tremendous growth of groundnut plantations. The strategy of using BAO to foster inward investment was something of a failure though. Capital extraction, not capital investment was the source of French wealth in West Africa. Taxes and import/export duties coming from the African colonies to the Metropole accounted for most of the capital movement in the AOF. Tremendous legal concessions were made to the BOA, and while it dominated the banking sector, its capital remained minuscule in comparison to companies engaged in capital extraction from the AOF. The BOA held capital of 6 million francs before 1914, and that rose to 50 million in 1931, but declined thereafter. In 1940 all banks in the AOF had a total investment of just over 1.5 million francs. But forestry alone had an inward investment of almost 3.4 million francs that year.

in 1918, the BAO's issuance privilege was extended to French Equatorial Africa as well as Cameroon and Togo, both under French mandate. The BAO soon opened a branch in Douala. In mid-1920, the bank's issuance privilege expired after twenty years; in subsequent years it was renewed only on an annual basis, and from 1925 on a half-yearly basis. Eventually a new agreement was signed in 1927, ratified by the French Parliament in 1928-1929 and entered into force on 1 July 1929, extending the issuance privilege by 20 years (until 1949). By then the French government had become a significant minority shareholder but stopped short of appointing the bank's leadership.

In the early 1920s two newly created competitors, the Banque Française de l'Afrique (BFA) and the Banque Comerciale Africaine (BCA), had partly eroded the BOA's monopoly over commercial banking in the region. The deterioration of economic conditions, however, led to the failure of the BFA in late July 1930 and its liquidation in 1931, which in turn put the BOA under financial stress. In the ensuing period, the BOA became more aligned with the government and started acting more like a central bank, playing a key role in restructuring the failing BCA in December 1931.

Meanwhile, the BAO's branch network kept expanding to Lomé, Bamako and Brazzaville in 1925, Cotonou and Port Gentil in 1928, Libreville in 1930, and Pointe Noire in 1937. In 1934, the BAO's main office in Côte d'Ivoire was relocated from Grand-Bassam to Abidjan, and in 1936 terminated its presence in Saint-Louis where it had started activity in the 1850s. In 1937, for the first time, a former civil servant, Georges Keller, became the BOA's chairman. By then, the French government held 32 percent of the bank's capital.

In 1940, the BAO remained under the control of Vichy France but lost access to its operations in French Equatorial Africa and Cameroon, where the privilege of money issuance was transferred to the newly created Caisse Centrale de la France Libre. In 1943, the BOA opened a counter in Magaria, and in 1944 a branch in Zinder, both near the southern border of Niger. Further openings occurred in Bangui in 1946 and Fort Lamy in 1950. Meanwhile, new competition appeared as mainland French banks including the Banque Nationale pour le Commerce et l'Industrie (BNCI), Crédit Lyonnais, and Société Générale established networks of their own in French Africa. In 1955, the BAO also lost the issuance privilege in French West Africa and Togo to the benefit of the Institut d'Émission de l'Afrique Occidentale Française et du Togo.

In the early 1960s, when many African countries gained independence, the BAO had 38 offices in Africa and contributed significantly to the financing of many infrastructures in the new countries, such as Côte d'Ivoire or Senegal.

The bank's new building in Dakar in 1961

Its last French leaders, chairman Georges Gautier and chief executive Claude Panouillot, stepped down in 1962.

Banque Internationale pour l'Afrique Occidentale

In 1965, the BAO renamed itself the Compagnie Financière France-Afrique (Cofifa) and transferred all its African banking operations to the Banque internationale pour l'Afrique occidentale (BIAO), a newly created French entity of which it owned 51 percent while the other 49 percent were owned by the First National City Bank of New York (later Citibank) which injected fresh capital into its operations. Some sections in Central Africa became the Banque internationale pour la Centrafrique (BICA), while the BIAO also owned minority stakes in the Banque Internationale du Togo (30 percent) and Banque Internationale du Burkina (25 percent), the latter originally known as the Banque Internationale des Voltas.

The BIAO's operations were subject to the often turbulent politics of the respective newly independent countries. For example, by the mid-1970s the BIAO was the only private-sector financial institution left in Niger. In June 1975, the government of Benin nationalized the BIAO there and merged it together with all other commercial banks in the country into the state-owned Banque Commerciale du Bénin. In other countries, the government merely imposed the creation of a separately capitalized subsidiary in which itself and/or other stakeholders became shareholders.

From 1975 to 1986, the BIAO's chairman and CEO was Jean Dromer. In 1977, Citibank exited the BIAO following a deterioration of its relationship with its French partners, and sold its shares to UBS (20 percent), Banco do Brasil (20 percent), and Compagnie Inter-Africaine de Banque (CIAB), a Luxembourg holding company owned by African interests (9 percent). In 1980, the BIAO established a separate subsidiary for its operations in Niger, headquartered in Niamey with offices in Zinder, Maradi, Arlit, and Tahoua. That same year, the Ivoirien government took a 30 percent stake in BIAO-Côte d'Ivoire.

Liquidation and aftermath

Building at 9, avenue de Messine in Paris (center), head office of the BIAO at the time of its liquidation

Partly as a consequence of the 1980s oil glut and of political turmoil, the BIAO entered severe financial distress at the end of the decade. In 1988, the French government directed the then state-owned Banque Nationale de Paris (BNP) to lead a restructuring. During 1989, BNP increased its share of Cofifa's equity from 40.5 to 58 percent. In April 1990, BNP initiated a drastic restructuring by indicating that it would exit most or all of the BIAO's operations in Africa.

On 1 June 1990, BNP exited the BIAO's operations in Côte d'Ivoire and Senegal which were taken over in respective rescue operations led by the Central Bank of West African States. On 14 June 1990, the BIAO initiated a process of orderly liquidation, which was entrusted to administrator Jacques Piot. BIAO Cameroon was separately liquidated later in 1990.

In March 1991, BNP sold the rest of the BIAO's African network to Meridien international Bank limited (MIBL), a holding controlled by financier Andrew Sardanis and incorporated in the Bahamas. By then, BIAO no longer had any assets left in Africa, whereas BNP had successfully sold its head office building at 9, avenue de Messine in Paris. BNP was also accused to jeopardize the BIAO to the benefit of the competing network it owned at the time in Africa under the brand Banque Internationale pour le Commerce et l'Industrie (BICI), especially after MIBL we itself liquidated in a context of fraud allegations in 1995.

In Burkina Faso, the BIAO was renamed Banque Internationale du Burkina (BIB) and eventually taken over by United Bank for Africa (UBA) in November 2008. It was renamed UBA Burkina in 2012, and subsequently held by UBA (63.7 percent), the Burkina Faso government (10.2 percent), and private shareholders including the private African-owned holding COFIPA (16.8 percent).

In Côte d'Ivoire, a 80 percent take in BIAO-CI was acquired on 25 January 2000 by Brussels-based Banque Belgolaise, while the government retained the other 20 percent. In 2006, Belgolaise in turn sold its stake to a consortium led by insurer Nouvelle Société Interafricaine d'Assurance (NSIA) with the Institution de Prévoyance Sociale, an Ivoirien public fund, as a minority participant. The bank was renamed NSIA Banque in 2014, and went public in 2017.

In Gabon, the BIAO was liquidated, as it had been earlier on in Cameroon.

In Niger, BIAO-Niger absorbed the local subsidiary of Banque Nationale de Paris, the Banque International pour le Commerce et l’industrie du Niger (BICIN), on 1 April 1989. In 1991, MIBL acquired 83.6 percent of BIAO-Niger. BIAO-Niger was then acquired by Banque Belgolaise in 1995 during the liquidation of MIBL. The bank was then successively taken over by Coris Bank International in 2011, by the Nigerien government in 2012, and eventually in 2015 by the Morocco-based BCP Group.

In Senegal, the former operations of the BIAO were renamed the Compagnie Bancaire de l'Afrique Occidentale (CBAO) in 1993, by then own by Dakar-based Mimran Group 75 percent), other local private shareholders (16 percent), and the Senegalese government (9 percent). CBAO was acquired in November 2007 by Attijariwafa Bank and renamed CBAO Groupe Attijariwafa Bank.

See also

• Banque de l'Algérie
• State Bank of Morocco
• Banque de Madagascar
• West African Economic and Monetary Union (French: Union économique et monétaire ouest-africaine)
• Central Bank of West African States (French: Banque Centrale des États de l'Afrique de l'Ouest)

References

Sources

• (French) History on the BEAC Website Archived 2010-02-16 at the Wayback Machine
• (French) French Central Bank: Qu'est ce que la Zone franc?
• Gary Wilder: The French Imperial Nation-state: Negritude and Colonial Humanism Between the Two World Wars. University of Chicago Press (2005). ISBN 0-226-89768-0
• Concentration Du Marche Bancaire : Attijariwafa arrive en force. Amadou FALL, Le Soleil (Dakar). 22 December 2008.
• AfDevInfo: CBAO
• CBAO.sn: Official site.