The world economy is paralyzed, stock markets are falling, human lives are being snatched away... The bill for covid-19 is heavy. The fate of the world economy is in the hands of the monetary and political authorities who can still save us from the greatest "economic evil" of stagflation. That is to say, a particular situation where we see in an economy the simultaneity of a high level of inflation and low growth, or even a recession.

In this heavy climate, the Regional Stock Exchange ended april 2020 in the green. The composite index appreciated by 2%. The flagship index of the ten (BRVM 10) most active stocks on the market ended the month with a gain of 4%. The top of the largest declines was held by the distribution (-5%) and agriculture (-3%) sectors respectively.

The list of strong increases is led by the leading transport sector (+18%) and the public services sector (5%). The transport sector is the index of the month in terms of profitability. This performance is entirely driven by Bolloré transport&logistics, whose closing price rose from 1410 francs on 01/04/2020 to 1670 francs on 30/04/2020, a gain of 18%.

Why such a correction on the transport index?

The transport sector index has experienced a big positive shock this month. In thirty days, the travel index has experienced a big reversal of its negative trend of March 2020 with a rebound of around 18% in April against a decline of 26% a month earlier. Some events at the end of March and during April may have reassured investors about the economic effects of the covid-19 pandemic. Among these factors of this reversal of trend both observed on market indices and on certain sectoral indices, we can mention:

• The measures taken by the Union Monetary Issuing Authority on 21 March 2020 relating to the postponement of maturities of claims by credit institutions in order to mitigate the economic impact of the pandemic on the banking system and the refinancing of activities Economic.

• Debt service relief for 19 African countries, including six (6) of the Union, except Côte d'Ivoire and Senegal (which received funds under other fund instruments) decided by the International Monetary Fund (IMF) on April 13, 2020.

• The implementation of treasury bonds called "Covid-19 social bonds" during the extraordinary meeting of WAEMU heads of state on April 27 by videoconference. This financial product aims to mobilize all the funds intended to finance the aggregate covid-19 response program of the eight (8) countries of the union, which amounts to 5,285 billion CFA francs.

Towards an exponential progression of covid-19 in the WAEMU

From 2 March to 30 April 2020, the covid-19 pandemic has affected all WAEMU countries even though the degree of spread varies from one country to another. Confirmed cases increased between 31 March and 30 April 2020. Indeed, in the space of a month, the number of cases tested positive has been multiplied by 6 (728 cases at the end of March against 4712 cases on 30 April) in the Union. The number of cases as of 30 April has increased 32-fold in Guinea, 21-fold in Niger and 18-fold in Mali. Burkina Faso theoretically records the lowest degree of contamination with a number of cases multiplied by 2 against 4 in Togo and 6 in Senegal. Behind these high rates of spread of the virus is a glimmer of hope. Indeed, the recovery rate in the union more than doubled between the end of March and the end of April from 12% to 32% against a constant death rate of 2%. As of April 30, Togo had the highest case fatality rate (5%), followed by Burkina Faso and Mali with 4%.

Prospects for the future: avoiding ostrich politics or Ghanaian error

The "Ghanaian" mistake is to avoid relaxing or even lifting certain security measures early for fear of finding itself in a spiral of contamination (after the deconfinement, in the space of seven (7) days Ghana has recorded 271 new cases of covid-19). Therefore, the evolution of the pandemic in our countries must not be analyzed as an exact science but as a more complex phenomenon deriving from the behavior of our fellow citizens and even more from the credibility they have of their leaders. We thus advise all the valiant populations of our countries to continue to respect the health security measures, the political authorities to restore the authority of the State and the credibility of all governmental actions vis-à-vis the governed, the monetary authorities to provide more support to the economies of the Union.

About the Author

Of Burkinabe nationality, LAMIEN Zounouyavé, PhD student in economics at OUAGA 2 University (Burkina Faso) is a financial engineer by training (Master 2 in Banking and Financial Engineering at the African Institute of Management in Ouagadougou).