The Council of Ministers of the West African Economic and Monetary Union (WAEMU) held its fourth ordinary session of the year, on December 10, 2020, by videoconference from the premises of the  Central Bank of West African States (BCEAO), under the chairmanship of Mr. Sani YAYA, Minister of Economy and Finance of the Togolese Republic, its president in office.

Also taking part in the meeting were Mr. Abdallah BOUREIMA, President of the WAEMU Commission, Mr. Tiémoko Meyliet KONE, Governor of the BCEAO, Mr. Serge EKUE, President of the  West African Development Bank (BOAD) and Mr. Mamadou NDIAYE, President of the Regional Council for Public Savings and Financial Markets (CREPMF).

At the end of the discussions, the following conclusions and recommendations were endorsed by the Ministers:

Reviewing the recent situation and the outlook for WAEMU, Ministers welcomed the resilience of economies in the face of the Covid-19 crisis. This is linked, on the one hand, to the efforts to improve the macroeconomic framework undertaken for several years by the Member States, which have made it possible to have room for manoeuvre at the level of budgetary and monetary policies to deal with the economic crisis. On the other hand, this resilience stems from the proactive reaction of the Community Bodies and Institutions that have supported and accompanied the response measures implemented by the public authorities.

The Council of Ministers noted a recovery in economic activity in the third quarter of 2020 due to the lifting of mobility restrictions and the effects of public policies put in place to support economic activity. Indeed, the Union's Gross Domestic Product (GDP) grew by 0.6% compared to the same period of 2019. For the year 2020 as a whole, the latest forecasts put the Union's GDP growth rate at 0.9% compared to 5.8% in 2019.

The Council noted that the disruptions of distribution channels in the context of the Covid-19 pandemic and the virtual stagnation of cereal production in the 2019/2020 season have led to an acceleration in the progression of the general price level. The Union's inflation rate averaged 2.9% in the third quarter, after 1.7% in the previous quarter. For the whole of 2020, the inflation rate is projected at 2.2% after -0.7% in 2019.

Ministers also noted that the overall budget deficit for the Union, estimated at 3,742.1 billion (or 5.5% of GDP) at the end of September 2020, has more than doubled compared to its level of 1,576.3 billion (2.4% of GDP) a year earlier. Internationally coordinated efforts to support economies in the context of Covid-19 have made it possible to finance crisis-induced needs and to maintain the Union's foreign exchange reserves at adequate levels.

The Council of Ministers stressed that despite the favourable development of the health situation in the area, the economic outlook for 2021 remains surrounded by uncertainties. In this regard, it urged Member States to accelerate efforts to improve the performance of tax administrations and rationalize public spending in order to free up resources to increase the capacity of national health systems, maintain social spending and pursue priority investments in infrastructure.

In addition, the Council of Ministers of the Union examined and adopted the draft uniform law on factoring in waMU member States. This text aims to provide the Union with an appropriate legal framework, which should contribute to boosting the financing of companies facing cash flow difficulties in order to finance their operating cycle.

Finally, the Council of Ministers was informed of the conclusions of the meeting of the Monetary Policy Committee of             2 December 2020 as well as those of the regional consultations with the International Monetary Fund, held from 6 to 20 November 2020. In addition, the Central Bank informed the Council of Ministers of the ongoing initiatives to deepen the regional financial market and broaden the investor base to enable economic agents to finance their needs on favourable terms.

The WAMU Council of Ministers approved the updated financial perspective 2021-2025 of BOAD, the risk appetite framework BOAD and the waiver of immunities and privileges of BOAD , as part of the granting of assistance by its international technical and financial partners the Austrian Development Bank (BDA) and the Bank JP MORGAN.

The Council of Ministers approved the draft budget for the 2021 financial year of the WAMU Regional Council for Public Savings and Financial Markets.

The Council of Ministers examined and adopted the Budget of the Bodies of the Union, for the financial year 2021 adopted in revenue and expenditure at the sum of 123,047,305,451 FCFA, down 13.0% compared to the 2020 budget.

This Budget enshrines the continuation of the effort to reduce operating expenses. Examining the six-monthly report on the implementation of multilateral surveillance of December 2020, the Council of Ministers notes that the good macroeconomic performance recorded for several years within the Union could not continue in 2020. Thus, the growth rate would be 0.9% in 2020 against 5.8% in 2019, the budget deficit would represent 5.9% of GDP after 2.5% in 2019 and the debt ratio would increase to 49.3% against 44.1% a year earlier.

The Council welcomes the implementation of the Covid-19 response and economic recovery plans with more than 1,503 billion executed, to address health emergencies and support households and businesses hard hit by the negative effects of the health crisis. The Council encourages Member States to continue efforts to mobilise more resources for the effective implementation of response plans.

The Council welcomes the Medium-Term Outlook for the Union, which indicates an improvement in the economic and financial situation in all Member States.

In order to ensure the viability of the Union and to create more budgetary space for the effective implementation of development plans, the Council urges member States to continue efforts to improve recoveries and mobilise concessional resources.

The Council therefore adopted the Recommendation on the economic and financial outlook for the Member States of the Union for the period 2021-2025.

The Council examined and adopted the final audit report of the WAEMU Bodies for the 2018 financial year.

As such, it gave management discharge to the Chief Authorising Officer of the Union Budget and to the Principal Accounting Officer of the Union Bodies for the financial year 2018.

Done at Lomé, 10 December 2020