West African Economic and Monetary Union: Staff Report on Common Policies for Member Countries-Press Release; Staff Report; and Statement by the Executive Director for West African Economic and Monetary Union

IMF Staff Country Reports, March 7, 2023

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West African Economic and Monetary Union: Staff Report on Common Policies for Member Countries-Press Release; Staff Report; and Statement by the Executive Director for West African Economic and Monetary Union

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Bibliographic details

• Published: March 7, 2023
• Series: IMF Staff Country Reports
• DOI: https://doi.org/10.5089/9798400235870.002

Recovery, macroeconomic conditions, and financial system

• WAEMU’s post-coronavirus disease 2019 recovery has withstood new global and regional shocks, aided by supportive macroeconomic policies and favorable initial macroeconomic conditions.
• Growth prospects remain favorable.
• The financial system appears resilient.

Risks and challenges

• Key risks identified:
  • Rising inflation.
  • More limited access to international capital markets.
  • Eroding external reserve buffers.
  • Regional security issues.
  • Elevated global risks that could amplify domestic vulnerabilities.
• Concern about second-round effects that may derail inflation if large risks materialize.

Fiscal strategy and debt sustainability

• Urgent need to design a credible fiscal strategy anchoring debt sustainability.
• Such a strategy should be based on clear and adequate deficit and debt regional ceilings.

Monetary policy

• Further monetary tightening seems warranted unless large risks that produce second-round inflation effects dissipate.

Regional reforms, development projects, and structural policies

• Progress in regional reforms and development projects should be accelerated.
• Structural reforms are crucial to:
  • Foster productivity growth.
  • Promote private investment.
  • Counteract possible scarring effects of the Covid-shock.
  • Facilitate intra-regional transactions.
• Priority areas for reform and investment:
  • Energy.
  • Digital and physical infrastructure.
  • Food resilience.
• More coordination and pooled resources are essential to implement regional development projects.

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• West African Economic and Monetary Union Staff Report on Common Policies of Member Countries
  • West African Economic and Monetary Union Staff Report on Common Policies of Member Countries (Markdown version)
  • West African Economic and Monetary Union Staff Report on Common Policies of Member Countries (PDF)