West African Banking Reform Creates a Two-Speed Integration in UMOA

The West African Monetary Union (UMOA), also known as the West African Monetary Union, is undergoing significant banking reform that is creating a two-speed integration across its member states. This reform, initiated by the adoption of the Uniform Banking Law in June 2023, aims to expand supervision to include payment institutions, electronic money institutions, and banking holding companies, among others.

Benin and Senegal are the first two states to fully transpose the new law into their national legislation. Benin did so with Law No. 2024-14 on September 2, 2024, followed by Senegal with Law No. 2025-03 on February 11, 2025. However, six other member states—Burkina Faso, Côte d'Ivoire, Guinea-Bissau, Mali, Niger, and Togo—have not yet completed the process as of August 5, 2026.

The reform strengthens supervision and control over financial flows, including a revision of foreign-exchange rules in December 2024, which enhances the Central Bank of West African States (BCEAO) control over cross-border financial activities. This has been done with a focus on anti-money laundering and counter-terrorism financing goals.

In terms of capital requirements, UMOA authorities raised the minimum capital for banks from 10 billion CFA francs to 20 billion CFA francs in December 2023, with a two-year compliance period. However, finance companies are still subject to a 3 billion CFA francs threshold. These stringent capital requirements and stricter supervisory rules favor larger incumbents and cross-border banking groups over smaller local lenders.

The Commission Bancaire de l’UMOA, the supranational banking supervisor overseeing all eight member states, faces challenges due to the uneven transposition of the law. This creates different legal conditions inside what is supposed to be a single supervisory area. The reform is not just about updating regulations; it reflects broader efforts to control financial intermediation, cross-border capital movements, and data flow in a region where the CFA franc system already integrates monetary policies under the BCEAO.