IMF Executive Board Concludes 2026 Discussions on Common Policies of the West African Economic and Monetary Union

Washington, DC: The Executive Board of the International Monetary Fund (IMF) concluded the annual discussions on common policies of member countries of the West African Economic and Monetary Union (WAEMU)[1]. The authorities have consented to the publication of the Staff Report prepared for this consultation[2].

Economic growth in the WAEMU reached 6.6 percent in 2025—among the fastest growing regions of the world—while inflation fell below its target range from mid-2025, driven primarily by transitory food price deflation. Progress in reducing external imbalances continued as the current account deficit narrowed from 5.7 percent of GDP in 2024 to 1.7 percent in 2025, reflecting elevated gold and cocoa prices and rising hydrocarbon export volumes. Reserves rose sharply above adequate levels, reaching 7.8 months of prospective imports in February 2026. The external position is assessed to be broadly in line with the level implied by fundamentals and desirable policies. As inflation fell and external buffers recovered, the Central Bank of West African States (BCEAO) lowered policy rates by a cumulative 50 basis points since June 2025.

Public debt is estimated to have declined in 2025, supported by fiscal consolidation and strong growth, although debt sustainability risks remain elevated in several countries. The fiscal deficit narrowed from 5.4 percent of GDP in 2024 to 3.4 percent in 2025, and the debt-to-GDP ratio fell from 68 percent in 2024 to an estimated 65 percent in 2025. However, debt levels and financing conditions remain heterogeneous across the union, with high debt and tighter financing conditions in some countries. Increased reliance on the regional debt market saw issuance volumes rise sharply in 2025, keeping the risks associated with banks’ exposures to sovereigns high. The banking system remains solid overall, although persistently high non-performing loans (NPLs), low provisioning, elevated sovereign exposures, and pockets of vulnerability in some countries heighten financial stability risks.

Growth is projected to moderate to about 5.5 percent in 2026, stabilizing at around 6 percent over the medium term, while inflation is expected to return to the target range in 2026. Fiscal convergence to the 3 percent of GDP deficit target is expected to continue, with delays in several countries. Reserves are projected to increase gradually, reaching about 8.1 months of prospective imports by 2030. However, the region remains subject to significant downside risks, notably from the war in the Middle East—which could significantly impact inflation, growth, and external sustainability—as well as fiscal sustainability pressures, macro-financial stability risks, and security and climate shocks.

Executive Board Assessment[3]

Executive Directors agreed with the thrust of the staff appraisal. They welcomed that the WAEMU continues to benefit from strong growth and low inflation, alongside progress in reducing fiscal imbalances and rebuilding external buffers. Noting significant heterogeneity across countries in terms of policy space, implementation capacity and exposure to risks, amplified by the war in the Middle East, Directors stressed the importance of prudent policies to preserve macroeconomic and financial stability, and of structural reforms to foster inclusive growth, combined with the need for strengthened coordination at the regional and national levels. They looked forward to the Fund’s continued engagement with WAEMU member states to bolster reform momentum and policy credibility.

Directors welcomed the decline in regional debt ratio, the first in over a decade. Given elevated public debt and financing needs, Directors stressed the importance of a credible and sustained commitment to fiscal consolidation. Fiscal adjustment should be driven primarily by domestic revenue mobilization, alongside measures to contain debt creating stock flow adjustments. Improvements in fiscal and debt transparency are also important. In this context, they called for the rapid adoption of the enhanced WAEMU Convergence Pact and emphasized the need to avoid fiscal slippages which could strain financing conditions and exacerbate sovereign bank nexus risks. Closely monitoring regional market conditions is thus paramount.

Directors noted that the current monetary policy stance remains broadly appropriate. They agreed that monetary policy should remain data dependent and continue to focus on maintaining price stability while safeguarding financial stability. Directors stressed that the BCEAO should stand ready to adjust the policy stance if conditions deteriorate.  Directors also encouraged continued dialogue between staff and the authorities to strengthen the effectiveness of monetary policy.

Directors welcomed that the financial system remains broadly sound. They noted that risks to financial stability persist reflecting the elevated sovereign bank nexus, persistently high nonperforming loans, low provisioning, and pockets of vulnerabilities in some countries. In that context, they encouraged the authorities to address these risks with actions anchored in fiscal discipline and supported by prudential, supervisory and crisis preparedness measures. Full implementation of remaining FSAP recommendations will also be essential.

Directors agreed that WAEMU's longer term prosperity will depend on stronger regional solidarity, deeper economic integration, and sustained inclusive growth. They welcomed the 2030 Strategic Plan as a useful framework to support economic transformation and diversification, including by reducing trade barriers and strengthening regional value chains.

The views expressed by Executive Directors today will form part of the Article IV consultations with individual member countries that will take place until the next Board discussion of WAEMU common policies. It is expected that the next regional discussions with the WAEMU authorities will be held on the standard 12-month cycle.

[1] Under Article IV of the IMF’s Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. Staff hold separate annual discussions with the regional institutions responsible for common policies in four currency unions—the Euro Area, the Eastern Caribbean Currency Union, the Central African Economic and Monetary Union, and the West African Economic and Monetary Union. For each of the currency unions, staff teams visit the regional institutions responsible for common policies in the currency union, collects economic and financial information, and discusses with officials the currency union’s economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis of discussion by the Executive Board. Both staff’s discussions with the regional institutions and the Board discussion of the annual staff report will be considered an integral part of the Article IV consultation with each member.

[2] Under the IMF's Articles of Agreement, publication of documents that pertain to member countries is voluntary and requires the member consent. The staff report will be shortly published on the www.imf.org/[country] page.

[3] At the conclusion of the discussion, the Managing Director, as Chair of the Board, summarizes the views of Executive Directors, and this summary is transmitted to the country's authorities. An explanation of any qualifiers used in summings up can be found here: http://www.IMF.org/external/np/sec/misc/qualifiers.htm.