By Serge KOUAMELAN, Executive Director of APBEF-CI
At the heart of agricultural financing in West Africa lies a paradox, an improbability, even a fallacy that no one can ignore anymore: we produce, we store, but we do not finance.
In the UEMOA region, agriculture represents 16 to 40% of the GDP, depending on whether we refer to countries like Côte d’Ivoire and Senegal on one side, or Burkina Faso and Mali on the other. At the same time, it can mobilize up to 80% of the active population in some countries in the region.
However, less than 5% of bank credit is dedicated to agriculture. I wrote that for your attention: less than 5%. This structural imbalance reflects a very simple reality: the financial industry, through its most eminent leaders and actors, does not fully recognize the value of agricultural assets.
A massive asset… but still invisible
Every year, millions of tons of agricultural products are stored in the region. In Côte d’Ivoire, for example:
• more than 2 million tons of cocoa;
• more than 1 million tons of cashew nuts; not to mention the millions of tons of cashew apples from which we do not fully benefit, unlike a country like Brazil.
These volumes represent billions of CFA francs immobilized, rarely mobilized as bank guarantees. At the same time, post-harvest losses reach 15% to 30% in sub-Saharan Africa (FAO). Thus, we face a double inefficiency: an unfunded asset and a partially lost value.
Solid foundations, but still fragmented
Côte d’Ivoire has structured an advanced model with the Authority for the Regulation of the Warehouse Receipts System (ARRE), allowing:
• certification of stocks;
• traceability;
• legal security of stocks.
This system already allows financing of 60 to 80% of the value of stocks in certain sectors. Senegal is moving in a similar direction, with a framework in consolidation.
But these initiatives remain local.
Yet, finance only works fully on the scale of integrated markets.
What is the obstacle? The absence of prudential recognition
Today, in the UEMOA:
Banks either apply high discounts (often > 30%), or remain cautiously prudent towards these instruments.
Is it because the mechanism is faulty? No. Simply because it is not standardized and recognized at the regional level.
Standards, oh standards… And so, an asset without a clear regulatory status remains an underfunded asset.
The BCEAO moment: a structuring decision
The BCEAO now has a decisive lever to transform this tool into a regional standard.
Behind the warehouse receipt, a major potential emerges:
• billions of CFA francs of mobilizable stocks;
• an immediate financing leverage without public debt;
• a tool for stabilizing agricultural markets.
Let’s carefully examine 4 priorities to scale up
- Standardize the receipt at the UEMOA level
A common standard, recognized and accepted by all, would guarantee:
• readability;
• legal security;
• bank confidence.
- Recognize it as an eligible guarantee
Its integration into refinancing mechanisms becomes essential to trigger massive adoption. - Adapt the prudential framework
• regulation of discounts;
• better risk weighting;
• consistent treatment by banks. - Structure an agricultural financing market
In the long term:
• credits backed by stocks;
• market instruments;
• regional integration of agricultural flows.
On the road to monetizing agriculture
Let’s think out loud, that if only 10% of the agricultural stocks in the UEMOA were mobilized, several hundred billion CFA francs could be injected into the real economy. The warehouse receipt would then become what it should be: an instrument for the financial transformation of agriculture.
Conclusion: a strategic choice, not technical
The question is no longer about relevance or any other inquiry. It is about the courage to make a decision. Recognizing and promoting, through our local and regional ambitions, the warehouse receipt, is to bring agriculture into the realm of bankable assets. It is also about aligning real production with the financial system.
Guarantee, valuation, security, ownership: the winning combination for 21st century agriculture
In a region where agriculture is an economic pillar and an essential social factor, this is not a technical reform, but a determined will for economic sovereignty.
