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Economic growth

IMF Executive Board Concludes 2025 Discussions on Common Policies of Member Countries of the West African Economic and Monetary Union (WAEMU)

Strategic Insights

— 2 min read

The Executive Board of the International Monetary Fund (IMF) has concluded the annual discussions on common policies of member countries of the West African Economic and Monetary Union (WAEMU). The Board assessed the economic performance of the WAEMU countries and provided recommendations for future policy actions.

The WAEMU countries have experienced strong economic growth, with inflation falling within its target range since November 2024. However, there is still significant divergence within the region, and the authorities need to continue to promote regional integration and strengthen the regional institutional framework and infrastructure.

The IMF Executive Board recommended that the WAEMU countries should focus on prudent policies to ensure macroeconomic and financial stability and structural reforms to foster inclusive growth. They also emphasized 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.

The Board 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. They also stressed the importance of transparent and accurate reporting of fiscal data and enhanced debt transparency.

Key Takeaways:

  • Economic growth continues to be strong in the WAEMU, with heterogeneity across countries.
  • Inflation has 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 is supporting a strong recovery in reserves.
  • 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.

Statistics:

  • GDP at constant prices for the WAEMU averaged 6.8% in 2024, with a range of 5.3% to 7.8%.
  • Consumer prices (average) fell to 3.2% in 2024, down from 7.6% in 2022.
  • Nominal GDP per capita for the WAEMU averaged $1,436 in 2024, with a range of $1,259 to $1,588.
  • Gross international reserves for the WAEMU equivalent to 10.1% of current GDP in 2024, with a range of 7.8% to 10.7%.
  • Total public debt for the WAEMU averaged 59.6% of GDP in 2024, with a range of 57.5% to 65.0%.

Sources:

  • IMF, African Department database
  • World Economic Outlook
  • World Bank World Development Indicators
  • IMF staff estimates and projections

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