The International Monetary Fund (IMF) Executive Board has concluded its annual discussions on the common policies of the West African Economic and Monetary Union (WAEMU) member countries. The IMF announced that economic growth in the WAEMU region remains robust, with inflation now within target ranges after previous surges. "Economic growth rose above 6 percent in 2024," the IMF reported, although disparities in per capita income persist among member countries.
The IMF noted improvements in reducing external imbalances, despite variations among members. The current account deficit narrowed significantly in 2024, and reserves have rebounded due to several factors including windfall revenues from cocoa harvests and high commodity prices. Public debt ratios have increased due to fiscal deficits and stock-flow adjustments, with significant variation across the union.
The Executive Directors of the IMF recognized WAEMU's strong growth and progress in fiscal consolidation but highlighted vulnerabilities to various shocks. They emphasized the importance of prudent policies for macroeconomic stability and structural reforms for inclusive growth. "Directors stressed the importance of a commitment to debt sustainability," urging measures to manage debt-creating stock-flow adjustments.
The Board commended the BCEAO's monetary policy stance that helped stabilize inflation and support reserves. They advised continued caution until reserve adequacy is sustained. Additionally, they acknowledged financial system resilience but pointed out risks from sovereign-bank nexus exposures.
"Directors agreed that prosperity in the WAEMU will depend on progress on political cohesion, economic integration, and strengthening the regional institutional framework," highlighting plans for a stabilization fund to support members affected by idiosyncratic shocks.
These discussions form part of ongoing Article IV consultations with individual member countries, with future regional discussions expected on a standard 12-month cycle.