Strengthening the WAEMU Regional Fiscal Framework
IMF Working Papers, March 4, 2022
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- Strengthening the WAEMU Regional Fiscal Framework
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Bibliographic details
- Authors: Antonio David, Alexandre Nguyen-Duong, Hoda Selim
- Published: March 4, 2022
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9798400204357.001
Summary assessment
- The paper assesses the adequacy and effectiveness of the WAEMU fiscal framework along three pillars that have proven to effectively support fiscal discipline in monetary unions:
- common fiscal rules (including adequacy of numerical ceilings as well as elements of design and enforcement),
- shared public financial management systems, and
- coordination mechanisms for decentralized fiscal policies.
- The analysis undertakes a calibration of regional debt and fiscal deficit ceilings taking into account different macroeconomic tradeoffs and risks.
- Conclusion: numerical ceilings that prevailed before the suspension of the fiscal rules remain adequate and strike the right balance between growth and fiscal sustainability.
- The paper proposes reform options to strengthen the WAEMU regional fiscal surveillance framework, with a view to more effectively supporting fiscal discipline.
Key findings and projections
- Numerical ceilings in place before the suspension of the fiscal rules are assessed as adequate for balancing growth and fiscal sustainability.
- Calibration of regional debt and fiscal deficit ceilings is performed considering different macroeconomic tradeoffs and risks (details and quantitative calibrations are in the full paper).
Policy recommendations and reform options
- Strengthen the WAEMU regional fiscal surveillance framework to more effectively support fiscal discipline.
- Improve design and enforcement elements of common fiscal rules.
- Enhance shared public financial management (PFM) systems.
- Reinforce coordination mechanisms for decentralized fiscal policies.
Content in this bundle
- Working Paper