(Ecofin Agency) - • WAEMU’s tax revenue remains far below the 20% benchmark, stuck at 14% of GDP
• IMF projects target may not be reached before 2048, possibly as late as 2061
• Persistent informality, exemptions, and weak collection hamper fiscal progress

The West African Economic and Monetary Union (WAEMU) may not reach its tax revenue target of 20% of GDP before 2048, or even 2061, if current trends continue, according to a May 2025 report by the International Monetary Fund. Despite two decades of reform, the average tax-to-GDP ratio across the bloc remains stagnant at 14%, well below the benchmark once set by the now-suspended Convergence Pact.

From 2001 to 2023, the region’s tax revenues rose from 10% to 14% of GDP. However, the IMF considers this growth modest given the significant reform efforts made. WAEMU still trails behind other sub-Saharan and low-income African countries in average tax performance. While indirect taxes, notably VAT, have grown in relative importance, their efficiency varies sharply across member states.

In 2023, Senegal reached an 18% tax-to-GDP ratio, while Guinea-Bissau remained at 9%. Countries like Benin, Côte d’Ivoire, Togo, Burkina Faso, and Mali, according to the IMF, have substantial untapped revenue potential. In Benin, for instance, the IMF estimates the gap between actual and potential revenue exceeds six percentage points of GDP.

This underperformance is largely due to entrenched informality, often over 80% of the economy, along with unchecked tax exemptions and outdated collection systems. VAT efficiency, in particular, ranges widely, with strong outcomes in Togo and poor results in Guinea-Bissau.

In response, WAEMU adopted a new Domestic Resource Mobilization (DRM) Action Plan in 2024. It calls for each member state to develop a Medium-Term Revenue Strategy (MTRS) by the end of 2025. So far, Benin, Burkina Faso, Côte d’Ivoire, and Senegal have completed their strategies.

The plan also focuses on enhancing land registration to support property tax collection, revising legal tax frameworks, and improving SME taxation. Implementation, however, remains uneven.

Taxes account for more than 80% of non-grant revenues in WAEMU countries. The IMF warns that continued underperformance in tax mobilization weakens states’ ability to finance development, heightens dependency on expensive regional debt markets, and reduces resilience to external shocks.