. Selected Economic and Financial Indicators, 1994-2002
2. Sub-Saharan Africa: Cross-Group Comparison, 1994-2002
3. Main Features of WAEMUEconomies in 2001
4. National Accounts, 1994-2002
5. Fiscal Balances, 1994-2002
6. External Balances, 1994-2002
7. External Public Debt, 1994-2002
8. Convergence Criteria, 1997-2002
9. Terms of Trade, 1994-2002
10. Effective Exchange Rates, 1994-2002
11. Disbursement of Foreign Assistance in Support of Adjustment Programs, 1994-2002
12. Monetary Survey, December 1995-September 2002
13. Summary Accounts of the
This paper investigates convergence and dynamic effects of human and physical capital on growth, in WAEMU countries. Using recently developed models for panel data and a growth accounting model, the study finds that growth is largely explained by changes in literacy rates and factor accumulation, but not by growth of total factor productivity (TFP). Nevertheless, the panel estimation identifies aid, government spending, credit to the private sector, and openness as positive determinants of TFP growth, and government deficits as a negative determinant. The study also finds that per capita income in lower-income WAEMU countries converge to per capita income in higher-income ones when economic policies are similar. These results suggest opportunities for policymakers to enhance growth and convergence.
highly manufactured products also react more promptly to shocks. The negative correlation between exports and speed of convergence can be explained by the fact that WAEMUeconomies are not diversified and export raw commodities for which they are price takers. For example, an adverse shock in the price of cotton would reduce the production of cotton without increasing the production of another good to offset completely the loss of value added. An increased share of foreign direct investment (FDI) in GDP can also ease the transition of economies to their steady state
performance a priority. Accordingly, a mechanism for the multilateral surveillance of macroeconomic policies and performance was established in 1996, supported by a convergence, stability, growth, and solidarity pact, which took effect on January 1, 2000. Notwithstanding the domestic and external shocks that have assailed the WAEMUeconomies, encouraging progress has been made in the first three years of the mechanism’s implementation. The WAEMU countries need to press ahead with this convergence process, enhance macroeconomic stability, and bolster the regional integration
This paper estimates an empirical model for investment in the West African Economic and Monetary Union (WAEMU), a region with relatively low investment shares, using annual data for the period 1970-95. Cross-country and time-series evidence shows that openness to international trade, competition in the domestic market, freedom of international capital transactions, and low dependency ratios are positively correlated with investment in the WAEMU region.
Olivier Basdevant, Patrick A. Imam, Mr. Tidiane Kinda, and Ms. Aleksandra Zdzienicka
West African Economic and Monetary Union (WAEMU) countries face a well-known dilemma between the need to provide shock-smoothing mechanisms and the lack of adequate mechanisms to do so. WAEMU countries are subject to frequent and, to a large extent, asymmetric shocks. They have remained poorly diversified and vulnerable to external shocks, such as changing weather conditions. In addition to limited shock-smoothing mechanisms at the regional level, WAEMU members’ ability to respond to shocks through national policies is also constrained by limited fiscal space and the need to preserve external stability—not only at the national level but also at the union level. In this context, developing a well-defined fiscal rule framework at the national level would help to build the necessary fiscal space for shock-smoothing. In addition, the development of specific shock-smoothing mechanisms—including a more developed and integrated financial sector—would also be critical. In addition, promoting financial development is also a challenge, which needs to be addressed in tandem with an adequate surveillance system. Some of these challenges have been faced by other monetary unions, such as the euro area.
This report examines recent economic developments and regional policy issues in the West African Economic and Monetary Union (WAEMU). Although progress has been achieved on the integration front since 1994, including the establishment of a customs union and the creation of the economic union, the momentum of integration appears to have slowed in recent years. Progress toward convergence of the WAEMU countries during 2001 and 2002 was below expectations, and difficulties were encountered in the effective implementation of various regional reforms.