BCEAO releases $ 6 billion for West African economies

The BCEAO has just made a liquidity injection of 3350 billion FCFA ($ 6 billion) at a fixed rate of 2% in favor of several banks of the UMOA. A total of 87 financial institutions participated in the operation. The Central Bank of West African States (BCEAO) made a further injection of liquidity to its member countries last week. In total, 3350 billion FCFA ($ 6 billion) were disbursed by the institution.

During the auction on September 14, 87 banks in the sub-region obtained an injection of liquidity at a fixed rate of 2%. With more than 1000 billion FCFA ($ 1.8 billion), it is the Ivory Coast which obtained the most important financing, ie 31% of the funds injected.

It is followed by Senegal with more than 580 billion FCFA ($ 1 billion), Mali with 466 billion FCFA (835 million $), Benin with 434.5 billion FCFA (777 million $) and Burkina Faso with 318 billion FCFA. ($ 569 million). Niger with 241.6 billion FCFA ($ 432 million), Togo with 219 billion FCFA (…

Coronavirus and Brexit: a fatal cocktail for the British economy?

Brexit negotiations are now at an impasse. The prospect of leaving the UK without an agreement raises fears for the worst for the British economy already shattered by the Covid-19.

Coronavirus and Brexit: a fatal cocktail for the British economy?

According to the OECD, the United Kingdom will be the country most affected by the pandemic with a drop in GDP of 11.5% for this year. It could endure the worst recession in three centuries. In April the GDP fell by 20%, which means that the level of wealth fell back to its level of ... 2002! As everywhere in the world, the coronavirus mainly strikes the poorest communities. This translates into a much higher health and economic price in the UK in the northern parts of England, which are the most favorable to Brexit. The former Labor strongholds that gave their votes to Boris Johnson record the greatest number of victims of the Covid and take the brunt of the economic impact of the crisis. The economic impact is twice as violent in this part of the country as in the region of London, acquired by Europe.

Can Boris Johnson help these underprivileged regions as he pledged in the aftermath of his election victory?

In the event of a hard Brexit, the exercise seems highly improbable. Because public finances are already greatly degraded by stimulus spending linked to the pandemic; the Covid has increased regional disparities within the kingdom and Brexit will worsen them even more because it is in these poorest industrial regions that jobs are most threatened, in the automobile, aeronautics or tourism, if no agreement is found between London and Brussels. Only a major infrastructure investment program could redress these inequalities and strengthen these regions. Finance minister Rishi Shunak was planning this, but today has an even more urgent priority: to prepare a budget to revive the economy of his country.

A prospect that seems distant, according to the E and Y Institute, the rebound will not take place before 2023

The institute of former Labor Prime Minister Tony Blair is even more pessimistic: according to its experts, Great Britain risks never recovering from the current damage. The contraction of the economy will automatically compress tax revenue and therefore lower its ability to overcome the crisis. When Brexit takes effect on January 31, with or without an agreement, the country will still be struggling with the economic crisis caused by the pandemic. The difficulties are likely to worsen when the government-sponsored short-time work program ends, that is, from October. It will be a moment of truth for businesses, which by losing the safety net, may be forced to file for bankruptcy. Too concerned about their survival, businesses do not materially have the means to prepare for Brexit without an agreement. In this case, they will be exposed to a new calamity: high customs duties in trade with the continent, destroying their competitiveness. The government is well aware of this lack of preparation, it will launch a massive shock communication campaign, in the hope of waking up businesses and mobilizing them urgently so that they are ready for brexit.