Strengthening the WAEMU Regional Fiscal Framework

Author/Editor:

Antonio David ; Alexandre Nguyen-Duong ; Hoda Selim

Publication Date:

March 4, 2022

Electronic Access:

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Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary:

This 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. We undertake a calibration of regional debt and fiscal deficit ceilings taking into account different macroeconomic tradeoffs and risks and conclude that 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 also proposes reform options to strengthen the WAEMU regional fiscal surveillance framework, with a view to more effectively supporting fiscal discipline.

Series:

Working Paper No. 2022/049

Subject:

Frequency:

regular

English

Publication Date:

March 4, 2022

ISBN/ISSN:

9798400204357/1018-5941

Stock No:

WPIEA2022049

Pages:

35

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