At a high-profile international conference on Artificial Intelligence hosted by the Central Bank of West African States (BCEAO) in Dakar last week, central bank governors from across Francophone and Lusophone Africa gathered to extol the promise of artificial intelligence. Discussions were rich, reflective, and commendably forward-looking.
What they weren’t, however, was timely.
While speeches waxed lyrical about machine learning optimizing monetary policy and AI-powered systems enhancing financial oversight, millions of citizens across West Africa were facing the real-world consequences of a sweeping regulatory enforcement by the BCEAO: frozen accounts, stalled transactions, and fintech startups teetering on the edge of collapse. Amid glowing tributes to a digital future, not a single governor publicly addressed the financial paralysis now affecting the present.
AI Ambitions Amid Analog Agony
The conference, themed “Artificial Intelligence: Opportunities and Challenges for Central Banks,” was undeniably significant. BCEAO Governor Jean-Claude Kassi Brou opened the event by acknowledging that AI remained largely experimental within central banks but insisted it must form a cornerstone of future digital transformation strategies. Other regional central bankers echoed these sentiments, stressing ethics, transparency, and the need to preserve human judgment. There was also talk of White Papers, focal point networks, and institutional strategies with the precision of a doctoral thesis.
Missing entirely was any mention of the fintech sector crisis — a curious silence, considering that just blocks away, fintech users queued at kiosks trying, in vain, to access their own money.
Since May 1, when the BCEAO began enforcing Instruction №001–01–2024, an obscure but now infamous regulation, over 90% of fintech companies operating in Senegal alone saw their services suspended for not having secured required licenses. Across the West African Economic and Monetary Union (WAEMU), digital wallets froze, payments failed, and salaries went unpaid. If AI is to become a lever for economic stability, someone appears to have forgotten to test the clutch.
In a press conference prior to the AI conference, BCEAO Senegal Director François Sène defended the institution’s actions, citing multiple extensions to application deadlines and extensive support to fintechs trying to comply. He attributed the mass shutdowns to incomplete submissions.
“The applications we received had many missing elements,” Sène said, presumably with the calm of a man who doesn’t have his payroll stuck in an e-wallet. “We held regular discussions with these companies.”
Yet, many fintech operators say the process lacked transparency, consistency, and a clear roadmap. After nearly a year and a half of back-and-forth, only nine licenses have reportedly been issued across the entire WAEMU zone. Meanwhile, over a hundred companies in Senegal alone were effectively told to stop operating — some within days of the BCEAO finally approving a handful of licenses.
Eric-Franklin Tavares of Paylican, an Ivorian fintech, put it more bluntly: “After about a year and a half, we don’t have half a dozen approved players — including major market actors. That’s not insignificant.” His concern? Regulators appear to be enforcing European-style requirements without the institutional capacity — or transparency — to match.
Regulation in Theory, Recession in Practice
The official rationale behind Instruction №001–01–2024 is sound: bolster depositor protection, combat financial crime, and elevate operational standards. With Senegal recently removed from the Financial Action Task Force (FATF) grey list, regulatory tightening is both expected and necessary.
But timing and communication are everything.
The BCEAO’s phased deadlines — July 2024, then January 2025, and finally April 30 — seemed to buy time. But approvals only began trickling out after the May 1 enforcement date had passed, plunging the ecosystem into uncertainty. Many fintechs say they were still in “advanced review stages” and expected to continue operating as normal while waiting.
Instead, they found themselves summarily shut down.
The BCEAO’s AI Reflection Committee (CRIA), established in July 2024 to plot a roadmap for AI integration, might want to reflect a little harder on its own fintech rollout. At the AI conference, Governors envisioned a future where predictive analytics streamline monetary policy and deep learning guards against systemic risks.
Meanwhile, in the present, small businesses are reverting to cash, salaries are being hand-delivered, and gig workers are locked out of their livelihoods. It’s not exactly the kind of scenario that inspires investor confidence.
And yet, silence.
The fact that no central banker on the AI panel addressed the fintech crisis — either in remarks or Q&A — suggests an institutional blind spot: a belief that future-forward thinking can be paraded independently of present accountability. It’s as though fintech is a separate world from AI, when in fact, the two are inextricably linked. Without a stable fintech ecosystem, the data and infrastructure that AI relies on in developing economies simply won’t exist.
The BCEAO insists that these measures are necessary to prevent money laundering and terrorist financing. But for the startups caught in the bureaucratic net, that rationale offers cold comfort. Some companies, like DEXCHANGE, have issued public reassurances, while others quietly await updates on their long-pending applications. One fintech founder reportedly lost an investment deal over the uncertainty. Others are preparing legal challenges.
“Today it’s the fintechs. Tomorrow, another measure could jeopardize any other company or startup in our ecosystem,” warned Mohamed Thiam of HR tech firm Socium.
In that context, the AI conference’s earnest optimism — calls for “rigorous implementation plans” and “technical partnerships” — feels somewhat surreal, like planning a smart home while the roof is on fire.
The Bottom Line
To be clear, no one disputes the need for regulation. But enforcement must be commensurate with institutional capacity and carried out with predictability and transparency. Otherwise, the BCEAO risks suffocating the very fintech innovation it claims to support.
As central banks dream of AI-enhanced futures, they must not lose sight of their duty to manage present-day shocks — particularly ones of their own making. Fintech is not the enemy; it’s a critical partner in financial inclusion, digital identity, and poverty alleviation.
Silence may be golden, but in this case, it’s sounding increasingly tone-deaf.
Until the BCEAO can resolve the fintech licensing bottleneck and restore public trust, no amount of AI enthusiasm will convince users, investors, or innovators that West Africa is a safe bet for digital transformation. For now, the fintech sector remains suspended between promise and paralysis — waiting not for algorithms, but for answers.