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Banque de l'Afrique Occidentale

(Redirected from Bank of West Africa (BAO))

Not to be confused with Bank of British West Africa.

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 1989 as the Banque Internationale de 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 in Senegal and beyond. It was liquidated in 1989 and partly succeeded by the Compagnie Bancaire de l'Afrique Occidentale.

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

Banque du Sénégal

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The Banque du Sénégal was founded by decree of Napoleon III of 21 December 1853, which established it as a discount and credit bank. Its headquarters were initially in Saint-Louis, by then the capital of French Senegal. It was the first local credit institution, intended by Faidherbe to limit the dependence of Senegalese traders on French financiers. In 1867 an agency opened in Gorée, the other commercial center of the region. Then, when Dakar became increasingly important, the bank was transferred there from Saint-Louis in 1884. Rufisque, another of the colony's so-called Four Communes, was in turn equipped with an agency in 1899.

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. In Saint-Louis, European were a minority compared with mulattoes and blacks. 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 renewed from year to year, and the French Government considered the creation of a new bank capable of issuing in the other colonies of Africa.

Banque de l'Afrique Occidentale

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

In 1901, the Banque du Sénégal was reorganized and its incorporation formally relocated to Paris, even though its operational headquarters remained in Dakar. It was granted a role of bank of issue with a geographical scope widened to all French West Africa.

Its network continued to expand, to Conakry, Porto-Novo, Grand-Bassam. In 1903, a new building was erected on the Kermel square in Dakar. The expansion continued after World War I to Lomé, Bamako, Brazzaville, Kaolack, and Cotonou.

Historians like Henri Brunschwig [fr] have pointed to the importance of the BOA in the assimilation of French West Africa into the French economic system.[1] 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.[2] 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.

The creation of and government support for the BOA was part of an attempt to inject investment into the French colonies. 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.[3] 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 [fr], the Nouvelle Société Commerciale africaine, and the Société Commerciale de l'Ouest Africain [fr] (lagging slightly were the growing plantation and mining interests of the Unilever company).[4] The BAO's board largely overlapped with the boards of these trading companies.

In 1924, the Banque Comerciale de 1'Afrique (BCA) brought the first significant competition to the BOA. When the initial privileges granted to the BOA expired in 1929, the French government granted it a further forty-year concession, with the only stipulation being that the government reserved the right to nominate the BOA's chair, and four members of its board.

In 1924, BAO expended to French Equatorial Africa buy opening branch in Brazzaville. It followed this by opening branches in Port Gentil (1928), Libreville (1930), Pointe Noire (1936), Bangui (1946), and Fort Lamy (1950).

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.[5] 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.[6] 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.[7]

The economic crisis of the early 1930s saw the collapse of the major private banks in the AOF, and the French authorised the BAO to save the BNCI by becoming its largest shareholder. At this point, the BOA regained its status as the sole investment bank in French West Africa.

Between 1941 and 1958, the Institut d'Émission de l'Afrique Occidentale Française et du Togo was spun off from BAO to administer the Franc des colonies françaises d'Afrique (FCFA) (25 December 1945).[8]

In December 1945, the CFA franc became the legal currency of the French territories of sub-Saharan Africa and the French government considered the nationalization of the BAO, but African parliamentarians – and in particular Lamine Guèye – thwarted this project.

In 1955, the issuance of banknotes was entrusted to a newly created Institut d'Emission 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

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In 1965, the BAO joined forces with the First National City Bank of New York to create the Banque internationale pour l'Afrique occidentale (BIAO). The BIAO was formed from the Côte d'Ivoire and Senegal, Niger, and several other branches of the pre-independence sections of the French colonial Bank of West Africa (BAO). Some sections in Central Africa became the Banque internationale pour la Centrafrique (BICA). The Senegalese section split from the other BIAO banks and was partially privatised in 1965, thereafter owned by the Senegalese Government and the United States Citibank company.

Political turbulence in some countries, climatic hazards, monetary reforms, then the second oil shock as well as certain internal dysfunctions put the group in difficulty at the end of the 1980s. In 1989, the BIAO Senegalese sections were liquidated into several private institutions, with a majority share of the largest going to the Senegalese MIMRAN Group.[9]

1991 to 1997 marked a general collapse of the BIAO banks across West Africa: Méridien BIAO SA and Méridien international Bank limited (MIBL) of the Bahamas consolidated banks as Méridien BIAO Burkina, Méridien BIAO Niger (later BIA-Niger), Méridien BIAO Gabon, Méridien BIAO Cameroon, Méridien BIAO Chad, and Méridien BIAO Togo. The Ivorian section survived and retained the name BIAO Côte d'Ivoire, and was itself later privatised.[10]

See also

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References

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  1. ^ Henri Brunschwig: "Politique et Economie Dans l'Empire Francais d'Afrique Noire 1870-1914". The Journal of African History, Vol. 11, No. 3 (1970), pp. 401-417.
  2. ^ Suret-Canele (1971), pp. 166-168.
  3. ^ Jean Suret-Canele. French Colonialism in Tropical Africa 1900-1945. Trans. Pica Press (1971), pp. 160-189.
  4. ^ Walter Rodney: How Europe Underdeveloped Africa. London: Bogle-L'Ouverture Publications, and Dar-Es-Salaam: Tanzanian Publishing House (1973).
  5. ^ Martin Thomas: The French Empire Between the Wars: Imperialism, Politics and Society. Manchester University Press (2005). ISBN 0-7190-6518-6
  6. ^ Patrick Manning: Francophone Sub-Saharan Africa 1880-1985, Cambridge University Press (1988), pp.50-56
  7. ^ Suret-Canele (1971), pp. 160-162.
  8. ^ "Global Financial Data". GlobalFinancialData.com. Archived from the original on 2007-09-29.
  9. ^ Entreprise & Developpement N°43 Archived 2011-07-25 at the Wayback Machine. Patrick Mestrallet, Institut Panafricain De Developpement Des Entreprises (IPDE), Benin. 05-09-2005
  10. ^ Banques africaines: Dix ans de restructurations. Jeune Afrique, 12 May 2008.

Sources

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