Brookings’ AGI at the Annual Meetings: How the Central Bank of West African States is advancing domestic priorities with global partnerships

LANDRY SIGNÉ: Hello, I am Landry Signé, a Senior Fellow in the Global Economy and Development Program and the Africa Growth Initiative at the Brookings Institution. Welcome to the Foresight Africa Podcast where I engage with distinguished leaders in policy, business, academia and civil society to share unique insights and innovative solutions to Africa’s challenges while highlighting opportunities to advance engagement between Africa and the rest of the world. Today we are fortunate to be meeting on the sidelines of the World Bank Group and International Monetary Fund’s Annual Meetings, a yearly gathering of the world’s most prominent figures in development finance whether we speak about the central bankers but also ministers of finance, heads of global and regional financial institutions, corporate CEOs, entrepreneurs, civil society leaders. Welcome to the Brookings Institution Foresight Africa Podcast Governor.

JEAN-CLAUDE KASSI BROU: Thank you. Thank you very much. We are quite pleased to be here and pleased to participate in this podcast

LANDRY SIGNÉ: Before we begin, could you please state your full name and title for the recording?

JEAN-CLAUDE KASSI BROU: I am Jean Claude Kassi Brou. I am the governor of the BCEAO the Central Bank of West African States

LANDRY SIGNÉ: Amazing. I am delighted to have you join me during this very busy week and truly appreciate you taking the time to share your insights with our audience. Governor as you take part in these year’s annual meetings which priority do you see as most essential for driving sustainable and inclusive growth worldwide and why?

JEAN-CLAUDE KASSI BROU: Thank you for this question. As you indicated we are here at the annual meeting of the IMF and the World Bank and we also have to take into account the global context in which we are today in a context of high uncertainties the trade war the tariff the various tension sometimes geopolitical but also we are in the context of very important transformative action going in the world digitalization stablecoin and so on. And all this of course is coming and having an impact on many countries, particularly on the low-income country and countries in Sub-Saharan Africa.

LANDRY SIGNÉ: Absolutely

JEAN-CLAUDE KASSI BROU: And the African countries have been hit to different degree in all those shocks because this rising protectionism has had some strong impact on some of them. For some other countries, like ours in the West African Monetary Union, because of the low direct trade that we have with the United States the direct impact is not as important. But one country particularly Côte d’Ivoire has been faced with an impact because of its export – essentially cocoa – to the U.S.

But we are also very concerned about the secondary impact. What will happen if all those tensions lead to really high interest rates, high inflation and tension in the financial market and so on? This will have definitively an impact on our economy on our financial system. We are a price taker. We export a lot of agricultural product but of course those can be impacted if the demand is impacted. So, we are very concerned. We are monitoring the situation very closely. But what are the key element we see really that are necessary today to maintain this sustainable growth? I think we see first that within this context; we need to have the capacity the ability to maintain strong macroeconomic policies because this is the basis of everything. So, we need to have a good and strong fiscal policies, strong monetary policies. That means central banks need to be independent need to ensure that the monetary stability, low inflation, financial stability are maintained and need to take all the necessary action because those are the basis on which we can build. So, the second point that I would like to make is that there is a need for the international community to look at the debt issue.

LANDRY SIGNÉ: Absolutely

JEAN-CLAUDE KASSI BROU: The Sub-Saharan African countries have been hit by COVID and then immediately after COVID we had a period of high-interest rate high international tension, high price of commodity imports petroleum energy and so on. So, they have been heated by multiple shocks, and this of course has led to increase in indebtedness and today many of our countries at least in our region are facing increased debt service. So, I think there is an urgent need really this is a plea that the issue of the debt be looked at. We know the G20 initiative is providing some type of relief, but we need to go much farther because the situation is already critical because as several countries have been already in that distress situation. And some even though their debt is not critical are facing difficulty in meeting the services and they need we need to really find a solution to give that country fiscal space, because we they need to be able to invest in those key factors that will ensure long-term growth.

LANDRY SIGNÉ: Absolutely.

JEAN-CLAUDE KASSI BROU: Training, education, health, basic services. And without this fiscal space if two-thirds of the fiscal revenue is used to service international debt then of course it puts the future of those countries in danger. This is a high priority question to address the debt issue.

The third point I think I would like to make is also that we need to focus really on job creation.

LANDRY SIGNÉ: Absolutely

JEAN-CLAUDE KASSI BROU: I think job creation needs to be very high on the agenda. The World Bank report is saying that by 2050 we’ll have more than 620 million young people getting in the job market We need to find jobs for youth, women – decent jobs. And when we say job creation of course we think in immediately of the private sector because the private sector is the one that creates the job. So, what do we need and have to do so that we can put the private sector in the position to deliver those jobs? Because if we don’t, with the number I gave you it is going to be very difficult. So as a country of course need to focus on Improving the business environment, make it more investment friendly. And the international organizations such as the World Bank and so on need to really also support various financial initiatives to encourage the private sector to really invest and to do that I think their program need to be oriented. They are doing it already, but they need to intensify because without energy we are not going to have the private investment. Without infrastructure it may not be possible. We need to focus also on training, specific training to really cater to the need of the private sector. We need to make sure that all the necessary ingredient for investment Private investment are there, and I think this is a key element.

And then the last point I would like to make on this is that we are seeing today as I said at the very beginning a very dynamic transformation in our economies through digitalization.

LANDRY SIGNÉ: Absolutely.

JEAN-CLAUDE KASSI BROU: It’s a reality. It is there and it is impacting. Today we are speaking about artificial intelligence. We need to make sure that we do not get into a big divide between the developed world and the developing country the African countries. African countries also need to take the train of digitalization, the train of artificial intelligence. And how much productivity we can get in those instruments to accelerate growth in agriculture, agro-industry, tourism, health, and education. In all those key factors. Digitalization to me really is something that we need to really look at very critically so that we really embark because the world has already left.

LANDRY SIGNÉ: Yes

JEAN-CLAUDE KASSI BROU: And we need in Sub-Saharan Africa to really embark on that. And this of course needs a global strategy that will involve training education investment and so on So that really, and the proper regulatory environment, will encourage innovation. While at the same time also of course managing the risk that those new instruments can bring to the system.

LANDRY SIGNÉ: Fantastic, Governor. I really like your comprehensive approach and systematically covering the challenges but also the opportunities

JEAN-CLAUDE KASSI BROU: Exactly

LANDRY SIGNÉ:  That allow to have concrete solutions.

JEAN-CLAUDE KASSI BROU: Exactly

LANDRY SIGNÉ: Governor, what insights or lessons from these discussions or from your broader scope of work should global leaders act on to strengthen resiliency and address today’s most pressing economic and social challenges?

JEAN-CLAUDE KASSI BROU: I think as indicated of course the world is facing some uncertainties countries are coping with that and what we see already is some readjustment in some of the trade and so on. We see that world growth according to the IMF is slightly below what was initially envisaged. I think the most important thing really is that it’s meant it’s critical to maintain cooperation because the world will always face challenges.

LANDRY SIGNÉ: Absolutely

JEAN-CLAUDE KASSI BROU: There will always be challenges. That’s part of the world the humanity, but anytime challenges occur the only way to address them collectively in the interest of everybody is through proper cooperation.

LANDRY SIGNÉ: Absolutely

JEAN-CLAUDE KASSI BROU: That’s why we strongly believe multilateralism is important. It still has its role because otherwise we get into a situation where each one is trying to pull away looking at his own when the solution is collectively.

So, I think to me listening to all the discussion that we had today is really we have to maintain this cooperation. And I think the meeting at the World Bank the IMF is a very good opportunity because all the leaders of the world are present. All the leaders of the world participate in the discussion. They understand the challenge, and they see collectively what need to be taken so that the world really can move forward. I think to me this is critical because this is the opportunity we have to make sure that while we are addressing all those issues we do not also forget the specific and the urgent need of the low-income countries, Sub-Saharan African countries, that are facing difficult challenges as I indicated. And I think that if we can do that, I think we’ll have really addressed a big part of the road. Because the issues are various. All the things that I have indicated the action that need to be taken these really need to be done collectively.

LANDRY SIGNÉ: Powerful Mr Governor I really like the working together stronger together

JEAN-CLAUDE KASSI BROU: Exactly

LANDRY SIGNÉ: Make me think about the Ubuntu Philosophy

JEAN-CLAUDE KASSI BROU: Exactly

LANDRY SIGNÉ: I am because you are

JEAN-CLAUDE KASSI BROU: Exactly

LANDRY SIGNÉ: I am because we are

JEAN-CLAUDE KASSI BROU: Exactly

LANDRY SIGNÉ: Governor how are international financial institutions adapting their mandates and instruments to an evolving geopolitical trade and economic landscape and where can they most effectively lead transformative change?

JEAN-CLAUDE KASSI BROU: What can they do for effective change I think those can be really found in line with the thing that I have already indicated, and they have been doing that. They have been adapting to the needs of the client because they have been listening. They have taken the time to listen and understand the challenges that each constituency face and particularly as an African speaking for my region, the specifics of the African countries.

LANDRY SIGNÉ: Yes.

JEAN-CLAUDE KASSI BROU: And we’ve seen for example in the IMF instruments such as an instrument to address emergency crisis situation, a rapid disbursement instrument has been put in place, instruments for to address food crisis have been put in place. The institution has adapted its instruments to really address those needs because those are realities.

I think there is also of course work on beside the main key instruments to try to see how to address specific instruments with collaboration with other institutions really to address newer development challenges such as the climate for example with a very important issue that need to be addressed because many of our countries are suffering from the impact of climate change. The World Bank also has addressed its instruments to address all those new challenges. I was listening to the president of the World Bank saying that really, they have gone through internal process to reduce the time preparation of project to make sure that the delivery time is reduced.

LANDRY SIGNÉ: Absolutely.

JEAN-CLAUDE KASSI BROU: Because the longer it is the more country and the people are penalized. So, I think the institution I’ve been working and I as I said world Bank on the climate change on climate the issue is to be realistic and see how to address it. Looking at the transition that is realistic in the sense that many of our countries have resources that need to be used to support the economic and social development, but we need to move forward, and I think the bank has taken is taking the step in that direction.

LANDRY SIGNÉ: Fantastic. And finally, Governor, what bold actionable ideas from this week do you see shaping global policy or practice and how do you plan to translate them into tangible results?

JEAN-CLAUDE KASSI BROU: As I said the key is to make sure that despite all those turbulence is to remain focused on the key things that we need to do to ensure that we go through those turbulences and that we are ready and stronger when we get out of the turbulences And I think we need to focus on issues like strong economic policies.

LANDRY SIGNÉ: Absolutely.

JEAN-CLAUDE KASSI BROU: We have to ensure good governance because this is what will ensure credibility to the population that we are serving. But credibility also to all the partners. That’s extremely important. Good governance because we thought that there is nothing that we can do We also need to focus on the key element that will help the population the economy, really continue to believe and continue to work to our improvement. So, we need to create the proper environment so that all energies can be completely lifted to address the challenges and go over and beyond those challenges for proper human and social development for all youths, women and all social categories. That’s critical.

LANDRY SIGNÉ: What a beautiful way to conclude Mr Governor!

JEAN-CLAUDE KASSI BROU: Thank you very much.

LANDRY SIGNÉ: Thank you so much for joining us.

JEAN-CLAUDE KASSI BROU: Thank you. Thank you.

LANDRY SIGNÉ: Amazing.