IMF Executive Board Concludes 2025 Discussions on Common Policies of Member Countries of the West African Economic and Monetary Union
IMF News, May 6, 2025
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- Published: May 6, 2025
Growth, inflation, and macroeconomic outlook
- Economic growth rose above 6 percent in 2024, near the average of the past decade, with heterogeneity across countries and widening gaps in per capita income among member countries.
- Inflation: after rising above target for much of 2024, inflation has fallen back within its target range since November 2024, driven by easing regional food price inflation and an appropriately tight monetary policy.
- The acceleration in GDP growth in 2024 is due to the start of production of large hydrocarbon projects in Niger and Senegal.
External balances and reserve dynamics
- The WAEMU’s current account deficit narrowed significantly in 2024 after widening in 2021-2023.
- Reserves rebounded in late 2024 and early 2025 and are back above minimum adequate levels due mainly to:
- windfall revenues from the annual cocoa harvest,
- high commodity prices,
- several IMF disbursements,
- exports of new hydrocarbon resources in Niger and Senegal.
- The Central Bank of West African States’ (BCEAO) response to external reserves pressures included tightening monetary policy via raising rates and containing the quantities of liquidity injected into the regional banking system.
- The WAEMU’s external position is assessed to have been moderately weaker than fundamentals and desirable policy settings in 2024.
Public debt, fiscal policy, and convergence framework
- Public debt ratios have increased significantly and heterogeneously in recent years due to large fiscal deficits and stock-flow adjustments.
- Public debt continued to increase in 2024 beyond levels projected during the previous discussions, with particularly high debt in Senegal.
- Higher debt issuances have led to heavier reliance on financing on the regional market, which has limited absorptive capacity and relatively high costs, posing risks to external reserves.
- The Council of Ministers has agreed to submit for approval by Heads of State a proposal by the WAEMU Commission for a revised Convergence Pact maintaining the previous fiscal deficit and public debt ceilings of 3 and 70 percent of GDP, respectively.
- Rapid adoption of this pact would signal a stronger commitment to debt sustainability and help guide sound fiscal policies.
Executive Board assessment and policy recommendations
- Directors welcomed strong growth, inflation within the target range, and progress in reducing fiscal and external imbalances, while noting significant divergence within the region.
- Key policy priorities and recommendations:
- Commitment to debt sustainability through progress towards fiscal consolidation, measures to contain debt‑creating stock‑flow adjustments, and close monitoring of regional financing capacity.
- Rapid adoption of the reintroduced WAEMU Convergence Pact with:
- a well‑designed escape clause,
- a correction mechanism,
- credible enforcement.
- Fiscal adjustment should be driven by revenue mobilization to protect priority spending.
- Transparent and accurate reporting of fiscal data and enhanced debt transparency.
- Monetary policy should continue to be closely calibrated to external buffers and inflation developments; a cautious stance remains appropriate until there is a sustained recovery in reserve adequacy.
- Introduce macroprudential regulatory measures to help restrain sovereign exposures, and capital surcharges to manage concentration risk.
- Closely monitor bank soundness indicators, address remaining FSAP recommendations, and take steps to facilitate removal of WAEMU members from the FATF grey list.
- Avoid contingent liability risks from leveraging any planned stabilization fund; continue promoting regional integration and institutional strengthening.
- Support policies to diversify the economy and strengthen resilience; continue progress on the new fast payment system to promote efficiency, inclusion, and regional integration.
Financial sector and sovereign‑bank nexus
- The banking system remains resilient but maintains large exposures to regional sovereigns, posing risks to financial stability.
- Directors encouraged macroprudential measures, capital surcharges for concentration risk, and monitoring and implementation of FSAP recommendations.
Regional integration and institutions
- Directors emphasized that prosperity depends on political cohesion, economic integration, and strengthening the regional institutional framework and infrastructure.
- A planned stabilization fund could demonstrate regional solidarity for members impacted by idiosyncratic shocks, but contingent liability risks through leveraging should be avoided.
- Progress on a new fast payment system is welcomed as supportive of efficiency, inclusion, and regional integration.
Key statistics and indicators (as presented)
- Nominal GDP (2024, millions of US Dollars): 219,784
- GDP per capita (2024, US Dollars): 1,447
- Headcount ratio at $1.90 a day (2011 PPP, percent of population): 23.1
- Undernourishment (percent of population): 12.5
- Total population (2023, millions): 145.3
- Urban population (2023, percent of total): 40.6
- Life expectancy at birth (2022, years): 61.1
- Gini index: 35.4
- Income share held by highest 10 percent of population: 28.4
- Income share held by lowest 20 percent of population: 7.7
- GDP at constant prices (Annual percentage change): 2021: 6.2; 2022: 5.9; 2023: 5.3; 2024: 6.8; 2025: 6.3; 2026: 6.4; 2027: 5.8; 2028: 6
- GDP per capita at constant prices (Annual percentage change): 2021: 3.2; 2022: 2.9; 2023: 2.4; 2024: 3.8; 2025: 3.3; 2026: 3.4; 2027: 2.8; 2028: 3
- Consumer prices (average): 2021: 3.6; 2022: 7.6; 2023: 3.7; 2024: 3.5; 2025: 2.3; 2026: 2
- Terms of trade: 2021: -6.3; 2022: -12.3; 2023: 7.9; 2024: 4.2; 2025: 12.4; 2026: 9.3; 2027: -1.3; 2028: -1; 2029: -0.7
- Gross national savings (percent of GDP): 2021: 20.4; 2022: 18.8; 2023: 22.4; 2024: 20.8; 2025: 21.7; 2026: 23.2; 2027: 23.4; 2028: 23.8
- Gross domestic investment (percent of GDP): 2021: 26.5; 2022: 28.8; 2023: 28.7; 2024: 27.5; 2025: 26.9; 2026: 26.2; 2027: 26.3; 2028: 26.7; 2029: 27.3; 2030: 27.7 (table lists a series through 2029 with values shown)
- Public investment (percent of GDP): 2021: 7.8; 2022: 8.8; 2023: 6.7; 2024: 7.2; 2025: 7.5; 2026: 8.2
IMF Executive Board Concludes 2025 Discussions on Common Policies of Member Countries of the West African Economic and Monetary Union — Press Release No. 25/130, May 6, 2025.
