## Securing Fiscal Discipline and Credibility in WAEMU: WAEMU

_Selected Issues Papers, May 17, 2024_

## Source details

**Canonical URL:** [Securing Fiscal Discipline and Credibility in WAEMU: WAEMU](https://www.imf.org/en/publications/selected-issues-papers/issues/2024/05/16/securing-fiscal-discipline-and-credibility-in-waemu-548973)

## Other formats

- [Markdown version](/en/publications/selected-issues-papers/issues/2024/05/16/securing-fiscal-discipline-and-credibility-in-waemu-548973/index.md)
- [Structured JSON version](/en/publications/selected-issues-papers/issues/2024/05/16/securing-fiscal-discipline-and-credibility-in-waemu-548973/index.json)
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## Bibliographic details
- Authors: Ljubica Dordevic, Olivia Y Ibrahim
- Published: May 17, 2024
- Series: Selected Issues Papers
- DOI: https://doi.org/10.5089/9798400275395.018

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### Key findings
- Fiscal consolidation and the reintroduction of the WAEMU fiscal framework is crucial for maintaining debt sustainability, external viability, and financial stability.
- The 3 and 70 percent of GDP deficit and debt ceilings envisaged by the expired rule remain appropriate.
- Addressing the stock-flow adjustments will help rebuild fiscal buffers.
- Convergence to a fiscal deficit of 3 percent of GDP should be ensured by 2025— barring exceptional circumstances— with focus on domestic revenue mobilization, while controlling expenditure.

### Policy recommendations
- Reintroduce the WAEMU fiscal framework with the 3 percent of GDP deficit ceiling and the 70 percent of GDP debt ceiling.
- Address stock-flow adjustments to rebuild fiscal buffers.
- Ensure convergence to a fiscal deficit of 3 percent of GDP by 2025, except under exceptional circumstances, emphasizing domestic revenue mobilization and expenditure control.
- Revamp the fiscal rule to include:
  - A credible debt correction mechanism.
  - Exogenous escape clauses.

### Subjects and keywords emphasized
- Debt sustainability
- Expenditure
- External debt
- Fiscal policy
- Fiscal rules
- Fiscal space
- International organization
- Monetary policy
- Public debt
- credibility in WAEMU, debt, Debt sustainability, deficit ceiling, deficit rule, deficit target, fiscal consolidation, fiscal rules, Fiscal space, Global, monetary union, stock flow adjustment, stock-flow adjustment

*Source: Securing Fiscal Discipline and Credibility in WAEMU: WAEMU, By Ljubica Dordevic and Olivia Y Ibrahim, May 17, 2024.*

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## Content in this bundle

- **1.   Debt Dynamics**
  - [1.   Debt Dynamics (Markdown version)](/-/media/files/publications/selected-issues-papers/2024/english/sipea2024012.pdf.md){rel="alternate" type="text/markdown"}
  - [1.   Debt Dynamics (PDF)](/-/media/files/publications/selected-issues-papers/2024/english/sipea2024012.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/selected-issues-papers/issues/2024/05/16/securing-fiscal-discipline-and-credibility-in-waemu-548973_