An International Monetary Fund, (IMF), report said that the medium-term growth outlook for West African countries is favorable but remains subject to significant downside risks.
The IMF staff 2017 discussions with the West African Economic and Monetary Union on Common Policies for Member Countries report also indicated that the Central Bank of West African States Monetary Policy Committee’s decision to increase its credit facility rate by 100 basis points and place tighter access to the refinancing window is expected to encourage banks to reconsider their risk policy and strengthen their capital.
The report also indicated that strengthening bank supervision will help ensure the quality of new loans while enhancing the effectiveness of the bank resolution framework remains a priority.
The IMF staff team headed by Mr. Boileau Loko after their discussions with the institutions of the West African Economic and Monetary Union, (WAEMU), on common policies also said economic activities has remained strong but vulnerabilities have increased.
It said real GDP growth is estimated to have reached 6.5 percent in 2016, underpinned by robust and resilient domestic demand.
Besides, the report said inflation has remained subdued due to continued solid agricultural production and low oil prices while preliminary data suggest an overall fiscal deficit of 4.5 percent of GDP in 2016, higher than initially planned.
Public debt is on the rise and reserve coverage has declined to 3.7 months of imports, reflecting a continued expansion in public infrastructure and lower-than-expected external financing.”