West African Economic and Monetary Union: Selected Issues
IMF Staff Country Reports, May 19, 2025
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- West African Economic and Monetary Union: Selected Issues
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Bibliographic details
- Published: May 19, 2025
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798229010603.002
Overview
- This Selected Issues paper analyzes domestic revenue mobilization (DRM) in the West African Economic and Monetary Union (WAEMU).
- DRM is identified as critical for financing economic and social development and ensuring debt sustainability in WAEMU, given rising interest, high security spending, and the prospective reduction in foreign aid.
- DRM is a cornerstone of the authorities’ reform programs and one of the most pressing policy challenges.
Key findings
- Over the last two decades, DRM in WAEMU has improved overall, but there is persistently large heterogeneity in revenue performance across countries.
- The secondary criterion of the suspended Convergence Pact sets a "20 percent floor on the tax to gross domestic product ratio" and remains a high bar for most WAEMU countries.
- Constraints cited include a generally narrow tax base, weak enforcement capacity, and high informality, among other factors.
Drivers and challenges
- Structural and administrative factors limiting DRM:
- Narrow tax base.
- Weak enforcement capacity.
- High informality.
- Rising interest and high security spending increasing fiscal pressures.
- Prospective reduction in foreign aid affecting external financing availability.
Policy recommendations and priorities
- Renewed commitment to:
- Streamline tax systems.
- Rationalize exemptions.
- Improve compliance.
- These measures would durably support revenue mobilization.
- Strengthen regional surveillance mechanisms to:
- Ensure effective implementation and enforcement of regional DRM commitments.
- Enhance regional cooperation on revenue administration.
- Support collaboration and knowledge transfer within the union.
Subject areas and keywords (as reported)
- Subject: Countercyclical capital buffers, Economic integration, Education, Financial regulation and supervision, Food security, Poverty, Revenue administration, Trade integration
- Keywords: AfCFTA trade integration, Countercyclical capital buffers, Food security, Global, policy effort, Sub-Saharan Africa, Trade integration, WAEMU country, WAEMU member, WAEMU trade integration agreement, West Africa
Content in this bundle
- 1wauea2025002-print-pdf