West African Financial Markets Enter New Era as Securities Settlement Shifts to T+2 Cycle

ABIDJAN, Côte d’Ivoire—In a landmark decision that promises to reshape the landscape of regional finance, the Central Securities Depository and Settlement Bank (DC/BR) has approved the acceleration of securities transaction settlements from three days to just two, marking a significant leap forward for the West African Economic and Monetary Union’s financial infrastructure.

A Watershed Moment for Regional Finance

The decision, ratified during the DC/BR’s Board of Directors meeting on October 21, 2025, in Abidjan, represents more than just a technical adjustment—it signals West Africa’s commitment to aligning with global financial standards while addressing local market needs. The shift from T+3 to T+2 settlement cycles, scheduled for implementation in December 2025, comes after extensive consultation with market participants and regulatory approval from the Financial Markets Authority of the West African Monetary Union (AMF-UMOA).

Faman Touré, President of the DC/BR Board of Directors, presided over the historic session that also saw the adoption of late settlement modalities, creating a comprehensive framework for the new operational reality. “This isn’t merely about shaving a day off settlement times,” explains Dr. Aminata Coulibaly, a financial markets professor at the University of Abidjan. “It’s about fundamentally enhancing market efficiency, reducing systemic risk, and sending a clear message to international investors that West Africa is serious about financial modernization.”

The Mechanics Behind the Move

For those unfamiliar with market operations, settlement cycles refer to the time between the execution of a trade and the final transfer of securities and cash. Under the current T+3 system, investors must wait three business days after a transaction before securities and funds officially change hands. The new T+2 framework compresses this timeline, requiring completion within two business days.

The implications extend far beyond mere convenience. “Reducing settlement time directly correlates with diminished counterparty risk,” notes Jean-Paul Mensah, a veteran trader with fifteen years of experience across West African exchanges. “When the gap between trade and settlement narrows, the window for something to go wrong—whether from buyer default, technical failure, or market volatility—shrinks considerably.”

Liquidity Implications and Market Efficiency

Perhaps the most immediate benefit for everyday investors will be improved market liquidity. The accelerated settlement means funds from securities sales become available more quickly, enabling reinvestment or withdrawal in a shorter timeframe. This enhanced fluidity could potentially attract more participants to the regional market, particularly institutional investors who prioritize efficient capital movement.

“Think of it as upgrading from a two-lane road to a four-lane highway,” illustrates financial analyst Mariam Diallo. “The same number of vehicles might use it initially, but the increased capacity and speed reduce congestion and make the journey smoother for everyone. For West African markets, this could mean reduced transaction costs, tighter bid-ask spreads, and ultimately, more competitive pricing.”

Aligning with Global Standards

The move to T+2 places the West African regional market in step with major financial centers worldwide. The United States transitioned to T+2 in 2017, followed by European markets, while some Asian exchanges have implemented even faster cycles. This synchronization isn’t merely about keeping up with neighbors—it’s about practical integration.

“International investors often face additional complexities when dealing with markets operating on different settlement cycles,” explains investment manager Samuel Ouedraogo. “By aligning with global standards, West Africa reduces friction for foreign capital, potentially lowering the barrier to entry for international institutions that might have previously considered the region’s different settlement timeline an operational headache.”

The Operational Challenge

Implementing such a fundamental change requires significant coordination across the financial ecosystem. Brokerage firms, commercial banks, custodians, and investors all must adjust their internal processes to accommodate the compressed timeline. The DC/BR has emphasized that the December implementation date follows months of preparation and testing with market participants.

“The transition isn’t without its challenges,” acknowledges a operations director at a major Abidjan-based brokerage who requested anonymity. “Back-office systems, reconciliation processes, and even client communication all need adjustment. But the long-term benefits unquestionably justify the short-term disruption.”

The DC/BR’s Expanding Role

As the specialized financial institution of the UMOA headquartered in Abidjan, the DC/BR plays a critical role in the region’s financial infrastructure. Its mandate includes centralizing securities custody for members and ensuring the smooth execution of settlement and delivery operations following stock market transactions, while fulfilling a community public service mission.

This settlement acceleration represents just one facet of the institution’s broader modernization agenda. “The DC/BR has quietly been building the technological and regulatory foundations for a more sophisticated financial marketplace,” observes economic researcher Fatoumata Bamba. “From enhanced electronic systems to clearer regulatory frameworks, these incremental improvements collectively create an environment where more ambitious reforms like T+2 become feasible.”

Broader Economic Implications

Beyond the technical aspects of securities settlement, this development carries symbolic weight for West Africa’s economic trajectory. Financial market efficiency directly influences capital allocation, potentially directing investment toward more productive sectors of the economy. Efficient markets also tend to be more resilient markets, better equipped to absorb shocks without systemic disruption.

“What we’re witnessing is the financial infrastructure catching up with the region’s economic ambitions,” suggests development economist Dr. Kwame N’Dri. “When you combine this settlement acceleration with other regional integration initiatives, you see a pattern of institution-building that could significantly enhance West Africa’s competitiveness in the coming decades.”

Investor Perspectives

For investors with portfolios spanning multiple African markets, the harmonization of settlement cycles simplifies cross-border operations. “Managing settlements across different timelines adds complexity and cost,” explains portfolio manager Chantal Yedan. “This move toward regional standardization, particularly when aligned with global norms, makes West African markets more accessible to pan-African investment strategies.”

Retail investors, too, stand to benefit from the increased efficiency. “The faster I can access my funds after a sale, the more flexibly I can respond to new opportunities,” shares small investor Pierre Gbegbo. “In volatile markets, that extra day can make a meaningful difference in investment outcomes.”

The Road Ahead

As December implementation approaches, market participants are fine-tuning their systems and procedures. The DC/BR has committed to providing comprehensive guidance and support throughout the transition, with particular attention to the newly adopted late settlement modalities that will govern exceptions to the standard T+2 cycle.

Could T+1 be on the distant horizon? While most experts consider such a move premature for the region’s current infrastructure, the successful implementation of T+2 would undoubtedly build momentum for future enhancements. “Financial market evolution is a journey, not a destination,” reflects regulatory specialist Adama Sarr. “Today T+2, tomorrow perhaps real-time settlement—what matters is maintaining this trajectory of continuous improvement.”

The West African financial community now watches with anticipation as this reform moves from boardroom approval to operational reality. If successfully implemented, the T+2 settlement cycle could mark a turning point in the region’s financial development—one business day at a time.

This report is based on original coverage by Mahamadi Sebogo. Full credit and acknowledgment to the original source at Sidwaya.info. For complete details and direct sourcing, readers are encouraged to consult the original publication.