IMF Staff Country Reports

This paper presents West African Economic and Monetary Union’s (WAEMU) report on Common Policies for Member Countries. The WAEMU’s post-coronavirus disease 2019 recovery has withstood the new global and regional shocks, partly due to supportive macroeconomic policies and favorable initial macroeconomic conditions. Growth prospects remain favorable and the financial system appears resilient. However, the WAEMU faces important risks and challenges associated with rising inflation, more limited access to international capital markets, eroding external reserve buffers, and regional security issues, in the presence of elevated global risks. It is urgent to design a credible fiscal strategy anchoring debt sustainability, based on clear and adequate deficit and debt regional ceilings. Further monetary tightening seems warranted unless large risks that second-round effects may derail inflation dissipate. Progress in regional reforms and development projects should be accelerated. Structural reforms to foster productivity growth and private investment are crucial to counteract possible scarring effects of the Covid-shock and facilitate intra-regional transactions, particularly in the areas of energy, digital and physical infrastructure, and food resilience. More coordination and pooled resources to implement regional development projects are essential.