IMF Executive Board Concludes Article IV Consultation with West African Economic and Monetary Union

Press Release No. 14/118
March 21, 2014

On March 14 2014, the Executive Board of the International Monetary Fund (IMF) concluded the annual Discussion on Common Policies of Member Countries of the West African Economic and Monetary Union (WAEMU).1

The political and security situation in the region has stabilized. Peaceful elections took place in Mali and Togo and further progress has been made towards normalization in Côte d’Ivoire.

Regional growth remained strong and inflation moderate in 2013. After rebounding to 6.6 percent in 2012, regional growth reached 5.5 percent last year. This performance was driven by the post-crisis recovery in Côte d’Ivoire, public investment efforts, good harvests in several countries, and the beginning of oil production in Niger. Growth was particularly strong in Côte d’Ivoire, at about 9 percent, but also exceeded 5 percent in Benin, Burkina Faso, and Togo. The economy remained weak in Guinea-Bissau, and the drought in the Sahel took a heavy toll on GDP growth in post-crisis Mali. Regional inflation decreased to 1.6 percent, thanks to lower food prices.

Despite a substantial increase in public investment in 2013, the area-wide fiscal deficit (including grants) stabilized at about 3 percent of GDP. The composition of spending shifted in favor of investment, while grants and tax revenue increased in most countries. The average public debt ratio for the region recorded a small decline to about 39 percent of GDP. Monetary policy was further eased. The Central Bank of West African States (BCEAO) lowered the policy rates by 50 basis points in 2013 and increased liquidity injections as bank liquidity contracted and inflationary pressures remained moderate. Money growth remained moderate as the decline of net foreign assets was offset by strong growth in credit to the economy. Bank lending rates recorded a small decrease.

The area-wide current account deficit continued to increase in 2013 mainly owing to higher public investment and a sharp decline in gold prices. The current account deficit (including official transfers) widened to 6.7 percent in 2013. Imports of intermediate goods, equipment, and services were boosted by higher public investment in most countries. Gold exports, which now represent about 20 percent of total regional exports, dropped on account of falling international gold prices. The overall balance of payments recorded a slight deficit, which led to a small decline of official reserves to 4.7 months of next year’s extra-regional imports.

The regional surveillance framework is being reviewed to improve fiscal policy coordination. The existing criteria and enforcement mechanism suffer from a number of shortcomings. For instance, the key criterion on the basic fiscal deficit has often been violated and after debt relief the debt criterion is no longer constraining. In light of these issues, the WAEMU Commission has launched a review of the whole framework.

Executive Board Assessment2

Directors welcomed the strong growth performance and moderate inflation in the region and noted that the near-term outlook is for continued strong growth. Directors underscored that sustaining this momentum in the medium term, while preserving macroeconomic stability, will require consolidating improvements in regional security, high-quality public investment, and ambitious growth-enhancing reforms. Regional policies to improve competitiveness, foster economic, financial and trade integration, and financial sector development will enhance growth and strengthen resilience.

Directors viewed the current macroeconomic policy mix as appropriate. In light of the widening current account deficit and declining official reserves, they supported a pause in monetary easing. Given the strong growth outlook, Directors also encouraged the authorities to strengthen fiscal and debt sustainability and build buffers while maintaining public investment and expanding social safety nets. They emphasized the importance of additional efforts to improve the quality of spending and increase revenue mobilization.

Directors underscored the need to improve fiscal policy coordination, and they welcomed the ongoing review of the regional surveillance framework. Directors agreed that convergence criteria should aim at preserving fiscal and external sustainability, and that they should be simple and transparent, while leaving policy room for countries to respond to shocks. Adopting a participatory approach to the reform of the framework would increase ownership and compliance. Directors also recommended progress in the coordination of public finance management, debt management, and tax policy.

Directors welcomed the ongoing financial sector reforms, and looked forward to faster implementation. To foster financial deepening, priority should be given to developing the interbank and sovereign debt markets. Directors underscored that efforts to strengthen bank supervision should continue, so as to increase observance of prudential rules. Given that some of these rules need to be brought closer to international standards, Directors welcomed the authorities’ intention to move to Basel II and III regulation. They recommended tightening certain prudential rules in the meantime. They also encouraged further improving the crisis prevention and resolution framework.

Directors stressed the importance of enhancing regional trade integration for creating new opportunities, sustaining high growth, and increasing resilience. They encouraged coordinated action to remove nontariff barriers to trade, fill regional infrastructure gaps, and improve the business and legal environments. Directors noted the important role that structural transformation and diversification will have to play in fostering long-run growth. Efforts should also continue to improve the quality and timeliness of data.

The views expressed by Executive Directors today will form part of the Article IV consultation discussions on individual member states that take place until the next Board discussion of WAEMU common policies.

WAEMU: Selected Economic and Financial Indicators, 2010–2018



2010 2011 2012 2013 2014 2015 2016 2017 2018


      Est. Proj. Proj. Proj. Proj. Proj.
  (Annual percentage change)  

National income and prices


GDP at constant prices

4.2 1.2 6.6 5.5 6.5 6.3 7.1 6.7 6.3

GDP per capita at constant prices

1.2 -1.7 3.7 2.6 3.6 3.4 4.1 3.8 3.4

Broad money to GDP

8.3 6.3 -1.6 5.3

Consumer prices (average)

1.4 3.9 2.4 1.6 2.3 2.2 2.2 2.2 2.2

Terms of trade

-0.4 6.4 -1.0 -0.8 1.2 0.9 -0.6 -0.7 -0.4

Nominal effective exchange rates

-4.3 1.7 -2.3

Real effective exchange rates

-6.3 1.0 -2.7
  (Percent of GDP)  

National accounts


Gross national savings

14.9 17.6 14.4 15.1 14.6 15.5 15.9 16.1 16.5

Gross domestic investment

19.7 19.0 20.0 21.9 22.2 22.6 22.9 23.1 23.4

Of which: public investment

5.8 5.7 6.6 7.8 8.6 8.4 8.7 8.8 8.9
  (Annual changes in percent of beginning-of-period broad money)  

Money and credit 1


Net foreign assets

3.1 1.0 -2.1 -4.3

Net domestic assets

12.6 9.7 11.9 14.8

Broad money

15.7 10.7 9.8 10.6
  (Percent of GDP, unless otherwise indicated)  

Government financial operations 2


Government total revenue, excl. grants

17.9 16.6 19.0 19.4 19.4 19.4 19.8 20.2 20.4

Government expenditure

23.3 23.2 24.8 25.3 26.9 25.5 25.7 25.8 25.8

Overall fiscal balance, excl. grants

-5.4 -6.5 -5.8 -5.9 -7.5 -6.1 -5.9 -5.7 -5.4

Official grants

2.3 2.5 2.2 2.9 3.2 2.9 2.8 2.7 2.5

Overall fiscal balance, incl. grants

-3.1 -4.0 -3.6 -3.0 -4.3 -3.2 -3.1 -3.0 -2.9

Basic fiscal balance, incl. grants & HIPC

-0.7 -2.1 -2.1 -0.9 -1.1 -0.9 -0.8 -0.7 -0.6

External sector


Exports of goods and services 3

29.1 29.0 29.1 27.8 26.2 26.4 26.5 26.4 26.7

Imports of goods and services 3

36.4 33.4 37.0 39.0 37.6 36.6 36.2 35.8 36.1

Current account, excl. grants 4

-6.8 -3.3 -7.1 -10.5 -10.4 -9.1 -9.0 -8.6 -8.4

Current account, incl. grants 4

-5.0 -2.0 -5.6 -6.7 -7.6 -7.1 -7.0 -7.0 -7.0

External public debt

32.5 31.5 26.5 26.8 27.8 27.8 27.6 27.3 27.1

Total public debt

44.4 44.3 39.7 38.8 38.7 38.5 38.2 37.5 37.1

Broad money

28.6 30.4 29.9 31.5

Memorandum items:


Nominal GDP (billions of CFA francs)

34,779 36,688 40,200 43,220 47,056 51,117 55,869 60,869 66,068.8

Nominal GDP per capita (US dollars)

714 768 756 816 895 961 1,040 1,122 1,202.7

CFA franc per US dollars, average

495 472 511 494

Euro per US dollars, average

0.76 0.72 0.78 0.75

Foreign exchange cover ratio 5

99.9 97.2 98.4 91.2

Reserves in months of imports


(excl. intra-WAEMU imports)

6.6 5.7 5.0 4.7

Sources: IMF, African Department database; World Economic Outlook; IMF staff estimates.
1The estimates for 2013 refer to annual change at end-June, with the beginning-of-period referring to end-June 2012.
2Fiscal data for 2014 reflect a strong increase in the fiscal deficit of Niger, following a new project in the hydrocarbon sector.
3Excluding intraregional trade.
4Data up to 2011 are corrected for intraregional trade discrepancies by BCEAO.
5Gross official reserves divided by short-term domestic liabilities (IMF definition). The estimates for end-September 2013.

1Under Article IV of the IMF's Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country's economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board. At the conclusion of the discussion, the Managing Director, as Chairman of the Board, summarizes the views of Executive Directors, and this summary is transmitted to the country's authorities. An explanation of any qualifiers used in summings up can be found here:

2 At the conclusion of the discussion, the Managing Director, as Chairman of the Board, summarizes the views of Executive Directors, and this summary is transmitted to the country's authorities. An explanation of any qualifiers used in summings up can be found here:


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