In 2014, Global budget deficit of West African Monetary Union (UMOA) member-states increased by 1.5 base point to 4.8% of regional Gross Domestic Product (GDP), against 3.3% in 2013. This is mainly due to public debt soaring, as much has been invested to reduce infrastructural gap.

The additional degradation led to sub-regional public debt rising to 44.7% of GDP in 2015, from 38.9% in 2014. The sub-region benefited from the fall in price of crude, main energy source used by member states, which improved their trade balances, namely that of Cote d’Ivoire, global leading cocoa producer, where prices of cocoa and groundnut increased.

According to data on global national accounts, the debt dynamics should continue some time before stabilizing in a few years. WAEMU’s GPD should grow 6% and the share of local savings in this percentage will average 18.3% over the next three years. Investments (public and private) should make 24.7% of GDP in 2016, and could reach 27% around 2020. Loans to private sector will stabilize around 12.5%.

In sight of all these, the International Monetary Fund (IMF) recommended authorities from the sub region to make monetary policies more effective, by taking advantage of the low inflation, and implement bold reforms, that would improve cash flow within the sub-regional economy. The institution also suggested that banking regulation is improved and efforts made to adapt to international standards so as to reduce risks of exposure to bad debts.

Idriss Linge