For the past fifteen years or so, West African economies have been undergoing a gradual evolution marked by the expansion of the financial sector. The development of the government securities market, the growth of bank credit, the rise of fintechs, and the diversification of savings products are gradually changing how economic activity is financed. This transformation remains less visible than major infrastructure projects or industrial investments, but it is profoundly changing the way the region's economies function.

This evolution is part of a broader phenomenon often described as financialization. This term refers to the process by which the financial sector takes on an increasingly prominent role in the economy, but also to a transformation of the financing methods themselves. In a financialized economy, financing no longer relies solely on banks and traditional credit, but increasingly on capital markets, securities issuance, institutional investors, and financial products. Economic decisions then become more influenced by financial conditions, interest rates, and markets, and less directly by the production of goods and services.

In the West African Economic and Monetary Union (WAEMU), the regional financial market has become increasingly important. Government bond issuance has risen sharply over the past decade, driven by the financing needs of member states. According to data from the WAEMU Securities Agency, fundraising on the regional market now exceeds several trillion CFA francs annually, compared to significantly lower amounts in the early 2010s. This development has made it possible to mobilize more local savings and, in some cases, reduce the immediate need for external financing.

The banking system has also expanded, with an increase in the volume of credit and a diversification of financial services. While the rate of bank account ownership remains moderate, the rise of mobile money and digital services has broadened access to financial transactions. In Senegal, the number of electronic payment accounts far exceeds that of traditional bank accounts, illustrating the rapid pace of change. This growth facilitates the flow of savings and provides new sources of financing for governments and some businesses.

This growth of the financial sector offers clear advantages. It allows for the mobilization of domestic resources, the financing of public investments, and the support of credit development. A more active financial market can contribute to stabilizing the economy by offering financing instruments in local currency and diversifying sources of capital. In economies where access to international markets sometimes remains uncertain, this capacity for local financing is a significant asset.

However, this trend also raises questions of balance. A growing share of savings is now directed towards government bonds or financial investments considered safer, which can limit the resources available for productive investment. Banks, for example, may be incentivized to buy government bonds rather than finance businesses, as the risk is lower and the procedures simpler. This phenomenon can slow the development of the private sector and reduce the impact of credit on real growth.

The rapid growth of financial activities also raises the question of regulation. A more developed financial system requires robust rules to prevent imbalances, whether excessive debt, risk concentration, or credit misallocation. The goal is not to stifle financialization, but to ensure that it supports the development of the real economy rather than hindering it.

The ongoing transformation shows that West African economies are gradually entering a phase where finance plays an increasingly central role. This evolution can support growth if it is accompanied by productive investment, a dynamic private sector, and sound financial institutions. Otherwise, the expansion of the financial sector risks benefiting investment operations more than sustainable wealth creation.