Basel II-III in the WAEMU, eight years on: the era of working arrangements

On 1 January 2018, the BCEAO's new prudential framework entered into force for credit institutions of the West African Monetary Union: a transposition of Basel II and Basel III rules, adapted to the zone's economies, covering capital, governance and risk management.

Eight years later, the subject remains alive, and the central bank keeps investing in it: the BCEAO's training centre was still organising a regional seminar on Basel II-III prudential regulation in March 2026, a sign that implementation remains a work in progress, not a given.

It is the classic trajectory of prudential regulation: the first phase is declarative, texts get adopted, committees created, reports produced; the second is operational, and it is the one that counts: does the internal capital adequacy assessment process (ICAAP) actually work? Does the risk function have the means of its organisation chart? Would the arrangements survive a thorough inspection?

A gap between the two is normal; not knowing it is not. An institution that discovers its weaknesses during the inspection pays full price; one that measured them beforehand arrives with a remediation plan already underway, which changes the conversation with the supervisor.

The Basel architecture holds in three pillars: quantitative capital and liquidity requirements; the supervisory review process, of which the ICAAP is the institution-side centrepiece; and market discipline through disclosure. The first pillar gets calculated, the third gets published; it is the second that separates institutions.

For the ICAAP is not a ratio, it is a living process: risk identification beyond pillar 1, stress scenarios, a risk appetite validated by governance bodies, and a real loop between capital and strategy. It is precisely that process nature that makes it so hard to simulate on the eve of an inspection.

The zone has seen pan-African banking groups emerge across several jurisdictions, WAEMU, CEMAC and beyond, each with its supervisor and calendar. In practice, the maturity of arrangements varies strongly from one subsidiary to the next, along local histories and teams.

Yet it is the consolidated reading that supervisors, rating agencies and investors increasingly look at. A group measuring all its subsidiaries on the same base turns a patchwork of local compliances into a steerable, demonstrable group trajectory.

This is where the maturity framework logic applies to prudential matters: decomposing each requirement, ICAAP, governance, credit risk, operational risk, continuity, into observable criteria; assessing each arrangement honestly; and converting the gaps into a dated roadmap. For a regional banking group, the same exercise on each subsidiary additionally yields a consolidated reading few executive committees possess.

Our catalogue holds 39 frameworks dedicated to BCEAO / UEMOA and BEAC / CEMAC arrangements, capital adequacy included. Eight years after entry into force, the competitive advantage is no longer being compliant on paper: it is knowing precisely where you stand, before you are told.