Benin report - Institut Africain de la Gouvernance

CHAPTER FIVE: CORPORATE GOVERNANCE__________________________________________________________________________union. SYSCOHADA – which is used in Francophone Africa – is thereforenot quite suitable, and the 16 Francophone African countries have not yettaken appropriate measures to move from SYSCOA to SYSCOHADA.535. This situation has created a stalemate, as evidenced by the absence of meetingssince 2001 to review the accounting system. Each country has developed itsown view on future accounting developments, losing sight of the need toharmonise the different systems. Hence, the Benin association received 685million CFA franc to move towards the International Accounting Standardsunder the Accounting Bodies in West Africa (ABWA), which regroups 12countries. The two leading countries (Nigeria and Ghana) have startedadapting to some of the standards, whereas the Francophone countries stillseem to be dragging their feet.536. Benin‟s accounting system, therefore, seems to be torn betweenSYSCOHADA and the ABWA system (drafted only for WAEMU). Anofficial from the National Centre of Accounting Training (CENAFOC)reported several cases of revising the budgets of enterprises or publiccompanies drafted on the basis of SYSCOA in order to transfer them toSYSCOHADA. The need to harmonise accounting systems is all the moreimportant since the development of the regional stock exchange depends onquality financial and accounting information. However, even if theInternational Federation of Accountants (IFAC) were to contribute toharmonising the standards and actions of all accords of the subregion, it wouldbe necessary to hold meetings mainly to plan the establishment of a Pan-African accounting institution.537. Banking standards. Beninese banks are governed by a prudential mechanismdefined by the WAEMU Council of Ministers in June 1999. The mechanismhas two main objectives:to enhance the solvency and stability of the banking system; andto provide greater protection for depositors within the context ofliberalising monetary, banking and financial activities.538. These rules, harmonised with the definitions of the WAEMU BankAccounting Plan, also take into consideration the prescriptions of the BaselCommittee on the assessment of risks, as well as the commitments of thebanking system under the 1988 Capital Agreement. Three key standards areused to assess the solvency of banks in WAEMU (in conjunction with thelevel of statutory equity capital of each institution): the holding of minimumcapital, rules of risk cover, and a limit on fixed assets and equity participation.Three other prudential standards mainly concern the setting of a ceiling forindividual risks: limits on loans to major shareholders, managers and staff;medium and long-term employment cover with stable resources; and liquidityand portfolio structure. Apart from two banks, Benin‟s banking sector seemsto comply with all these standards and rules.188