The International Monetary Fund’s Executive Board has concluded its annual discussion of common policies in the West African Economic and Monetary Union and released the staff report with the authorities’ consent. Directors welcomed strong regional growth, low inflation, narrower fiscal and external imbalances, and a rebuilding of reserves, but stressed that prudent macroeconomic policies and structural reforms remain necessary because debt, financing, and financial stability risks are still elevated in parts of the union and are amplified by the war in the Middle East. In 2025, WAEMU growth reached 6.6 percent, inflation fell below the target range from mid-2025, the current account deficit narrowed to 1.7 percent of GDP from 5.7 percent in 2024, and reserves rose to 7.8 months of prospective imports by February 2026. As inflation fell and external buffers recovered, the Central Bank of West African States cut policy rates by a cumulative 50 basis points since June 2025. Directors noted that the fiscal deficit narrowed to 3.4 percent of GDP in 2025 from 5.4 percent in 2024 and the debt ratio fell to an estimated 65 percent from 68 percent, but urged a credible and sustained consolidation effort led by domestic revenue mobilization, greater fiscal and debt transparency, and rapid adoption of the enhanced WAEMU Convergence Pact. They also said monetary policy should remain data dependent and warned that high sovereign exposures, persistently high non-performing loans, low provisioning, and country-specific vulnerabilities continue to pose risks to financial stability. The IMF said these Board views will feed into Article IV consultations with individual member countries until the next discussion of WAEMU common policies. The next regional discussions are expected on the standard 12-month cycle.

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