May 6, 2025
PRESS OFFICER: Julie Ziegler
Phone: +1 202 623-7100Email: MEDIA@IMF.org
Washington, DC: The Executive Board of the International Monetary Fund (IMF) concluded the annual discussions on common policies of member countries of the West African Economic and Monetary Union (WAEMU)[1]. The authorities have consented to the publication of the Staff Report prepared for this consultation.[2]
Economic growth continues to be strong in the WAEMU, with heterogeneity across countries, while inflation has fallen. Economic growth rose above 6 percent in 2024, near the average of the past decade, although gaps in per capita income among member countries have continued to widen due to significant variations in economic growth. After rising above target for much 2024, inflation has also fallen back within its target range since November 2024, due to easing regional food price inflation and an appropriately tight monetary policy. The banking system remains resilient, although it maintains large exposures to regional sovereigns.
Recent progress in reducing the WAEMU’s external imbalances, albeit with notable divergence among members, is supporting a strong recovery in reserves. After widening in 2021-2023, the WAEMU’s current account deficit narrowed significantly in 2024. The Central Bank of West African States’ (BCEAO) response to external reserves pressures has also been broadly appropriate, by tightening monetary policy via raising rates and containing the quantities of liquidity injected into the regional banking system. 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, and exports of new hydrocarbon resources in Niger and Senegal. The WAEMU’s external position is assessed to have been moderately weaker than fundamentals and desirable policy settings in 2024.
Public debt ratios have increased significantly and heterogeneously in recent years due to large fiscal deficits and stock-flow adjustments. Ongoing progress in union-wide fiscal consolidation is welcome, although it is proceeding at a slower pace than anticipated mainly because of large data revisions in Senegal. Public debt continued to increase in 2024 beyond the level projected during the previous discussions on common policies, with considerable variation across the WAEMU (and particularly high debt in Senegal). Higher debt issuances are leading to heavier reliance on financing on the regional market, which has limited absorptive capacity and relatively high costs, and could pose a risk to external reserves.
Executive Board Assessment[3]
Executive Directors agreed with the thrust of the staff appraisal. They welcomed that the WAEMU is benefitting from strong growth, inflation within the target range, and progress in reducing fiscal and external imbalances, while also noting the significant divergence within the region. Highlighting that the region remains vulnerable to a wide range of shocks, Directors stressed the importance of prudent policies to ensure macroeconomic and financial stability and structural reforms to foster inclusive growth. They looked forward to the Fund’s continued support through tailored policy advice and financial and capacity development assistance.
Directors stressed the importance of a commitment to debt sustainability, grounded in progress towards fiscal consolidation, measures to contain debt‑creating stock‑flow adjustments, and close monitoring of regional financing capacity. In that context, they commended the proposed reintroduction of the WAEMU Convergence Pact with the previous fiscal deficit and debt ceilings and called for its rapid adoption with a well‑designed escape clause, a correction mechanism, and credible enforcement. Fiscal adjustment should be driven by revenue mobilization to protect priority spending. Directors also stressed the importance of transparent and accurate reporting of fiscal data and enhanced debt transparency.
Directors welcomed BCEAO’s tight monetary stance which helped bring inflation back to the target range and support reserves. Directors agreed that monetary policy should continue to be closely calibrated to external buffers and inflation developments, and that a cautious stance remains appropriate until there is a sustained recovery in reserve adequacy.
Directors welcomed the resilience of the financial system but noted that the sovereign‑bank nexus continues to pose risks to financial stability. They encouraged the introduction of macroprudential regulatory measures to help restrain sovereign exposures, and capital surcharges to manage concentration risk. Directors stressed the importance of closely monitoring bank soundness indicators, addressing the remaining FSAP recommendations to strengthen financial stability and deepening, and taking the necessary additional steps to facilitate the removal of WAEMU members currently on the FATF grey list.
Directors agreed that prosperity in the WAEMU will depend on progress on political cohesion, economic integration, and strengthening the regional institutional framework and infrastructure. A planned stabilization fund to support members impacted by idiosyncratic shocks could demonstrate regional solidarity, but contingent liability risks through leveraging should be avoided. Directors welcomed progress on the new fast payment system, which would promote efficiency, inclusion, and regional integration. Policies to diversify the economy and strengthen resilience would also be important.
The views expressed by Executive Directors today will form part of the Article IV consultations with individual member‑countries that take place until the next Board discussion of WAEMU common policies. It is expected that the next regional discussions with the WAEMU authorities will be held on the standard 12‑month cycle.
| Table 1. WAEMU: Selected Economic and Social Indicators, 2021–29 | |||||||||||
| GDP | Poverty (2021, latest available) | ||||||||||
| Nominal GDP (2024, millions of US Dollars) | 219,784 | Headcount ratio at $1.90 a day (2011 PPP, percent of population) | 23.1 | ||||||||
| GDP per capita (2024, US Dollars) | 1,447 | Undernourishment (percent of population) | 12.5 | ||||||||
| Population characteristics | Inequality (2021, latest available) | ||||||||||
| Total (2023, millions) | 145.3 | Income share held by highest 10 percent of population | 28.4 | ||||||||
| Urban population (2023, percent of total) | 40.6 | Income share held by lowest 20 percent of population | 7.7 | ||||||||
| Life expectancy at birth (2022, years) | 61.1 | Gini index | 35.4 | ||||||||
| Economic Indicators | |||||||||||
| 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | |||
| Act. | SM/24/90. 1 | Est. | Projected | ||||||||
| (Annual Percentage Change) | |||||||||||
| National income and prices | |||||||||||
| GDP at constant prices 2 | 6.2 | 5.9 | 5.3 | 6.8 | 6.3 | 6.4 | 5.8 | 5.9 | 6 | 5.9 | |
| GDP per capita at constant prices | 3.2 | 2.9 | 2.4 | 3.8 | 3.3 | 3.4 | 2.8 | 2.9 | 3 | 2.9 | |
| Consumer prices (average) | 3.6 | 7.6 | 3.7 | 3.2 | 3.5 | 2.9 | 2.3 | 2 | 2 | 2 | |
| Terms of trade | -6.3 | -12.3 | 7.9 | 4.2 | 12.4 | 9.3 | 3.6 | -1.3 | -1 | -0.7 | |
| Nominal effective exchange rate | 1.2 | -2.3 | 6.3 | 3.5 | … | … | … | … | … | … | |
| Real effective exchange rate | 1.5 | -3.6 | 3.9 | 3 | … | … | … | … | … | … | |
| (Percent of GDP) | |||||||||||
| National accounts | |||||||||||
| Gross national savings | 20.4 | 18.8 | 18.8 | 22.4 | 20.8 | 21.7 | 23.1 | 23.2 | 23.4 | 23.8 | |
| Gross domestic investment | 26.5 | 28.8 | 28.7 | 27.5 | 26.9 | 26.2 | 26.3 | 26.7 | 27.3 | 27.7 | |
| Of which: public investment | 6.8 | 7.8 | 7.7 | 8.8 | 6.8 | 6.7 | 7.2 | 7.5 | 7.8 | 8.2 | |
1 Shows data from the IMF Country Report 24/90 issued on March 1, 2024.
2 The acceleration in GDP growth in 2024 is due to the start of production of large hydrocarbon projects in Niger and Senegal.
3 Excluding intraregional trade.
