Magaye Gaye, economist, spoke about the possible acquisition of Société Générale by the State of Senegal. During an interview with Radio Sénégal Internationale, he welcomed this initiative, which he described as “very good”.
“It is an excellent approach to seek to strengthen the national banking system,” he said. According to him, Senegal’s financing needs are immense, reaching 18,000 billion CFA francs over the next five years. This situation calls for in-depth reflection on financing arrangements.
For Magaye Gaye, the addition of an additional Senegalese public bank is not a bad thing, especially in a context where the banking sector is mainly controlled by foreign interests. He deplores a certain mismatch between the objectives of foreign banks, often speculative and oriented towards the short term, and the priority needs of Senegal, which require long-term financing for development.
He also pointed out financing conditions that he considers inappropriate and a “very restrictive” monetary framework.
However, the economist invites the authorities to exercise caution in this operation: “It is important to acquire Société Générale at the right price.” He recommends carefully examining recapitalization needs, checking the quality of the portfolio and taking into account possible doubtful debts.
According to him, an approach based on net assets – that is, the difference between assets and debts – would be ideal for this transaction.
Faced with this takeover project, a legitimate question arises: why not strengthen the National Economic Development Bank (BNDE), which already belongs 82% to the Senegalese state?
Magaye Gaye recognizes that this option could be relevant. However, he points out that Société Générale has lost significant market share over the years. According to him, the reasons given by the bank to justify its withdrawal from Africa such as geopolitical risks are not the only explanations: “There are probably internal difficulties and a loss of competitiveness which weighed in this decision”.
To consider strengthening the BNDE, Magaye Gaye recommends an in-depth audit, which could extend to the Priority Investment Guarantee Fund (FONGIP) and the Sovereign Fund for Strategic Investments (FONSIS). If the takeover of Société Générale proves appropriate, he suggests that it be carried out through BNDE.
The economist identifies three main alternatives to meet the country’s financing needs, with the creation of a new public bank, in addition to or as an alternative to the takeover of Société Générale.
According to him, the Post Office must also be transformed into a postal bank. This option would rely on the extensive network of agencies and the land assets of the Post Office, despite its organizational and financial challenges.
“The Post Office’s recapitalization needs are estimated at 174 billion CFA francs, an amount close to the sale price set by Société Générale,” explains Magaye Gaye. But also to strengthen the BNDE and consolidate existing structures, in particular FONGIP and FONSIS, following rigorous audits.
