On September 30, 2021, the West African Center for Banking Studies and Training (COFEB) organized an online conference on the theme of "Public debt sustainability and economic recovery in WAEMU in a context of crisis". 

The conference was facilitated by Dr. Franck Bassambié Bationo, Director General of Economic and Monetary Affairs at the BCEAO. It was chaired by Dr. Ousmane Samba Mamadou, Director General of COFEB, who also acted as moderator. 

In addition to BCEAO staff, the virtual meeting was attended by COFEB auditors and alumni, academics, and representatives of central banks, banks and financial institutions, microfinance institutions, the WAMU Securities Agency, and the economic and financial administrations of the Union's Member States. 

The objective was to help the participants gain a better understanding of the issue of public debt sustainability, especially in a context of crisis. It also sought to provide an opportunity for the participants to discuss the need to reconcile the financing needs arising from the COVID-19 pandemic with the need to preserve public debt sustainability. 

In his introductory remarks, Dr. Samba Mamadou, after thanking the participants on behalf of the Governor of the BCEAO, noted that public debt had always been a matter of interest for economists. He recalled that the debate on public debt had been rekindled following the 2008 financial crisis and even more so with the COVID-19 pandemic, which has highlighted the both imperative need for economic support measures to address the crisis and the importance of post-crisis economic recovery policies. Accordingly, the conference had been organized to shed light on the situation of the WAEMU economies.

Taking the floor, Dr. Bationo stated that African countries' considerable financing needs were due to the low tax burden, the decline in official development assistance and increased public spending. The speaker added that those needs had increased with the COVID-19 pandemic. However, he pointed out that, despite the growing public debt, the debt ratio remained relatively acceptable in WAEMU countries, below the level in advanced countries. 

He added that public debt had made it possible to achieve significant socio-economic progress, including a steady increase in per capita income, a reduction in the poverty rate and improved education and health outcomes.

Dr. Bationo went on to say that the COVID-19 crisis had severely impacted the WAEMU economies. Consequently, the stimulus packages designed by the States required additional use of domestic and external debt. He cited the initiatives undertaken by the BCEAO since the beginning of the crisis as well as external initiatives. He further noted that government indebtedness would continue to finance strategic development expenditures. This situation raised questions as to the compatibility of governments' debt strategies and the sustainability of their debts. 

He ended his presentation by outlining preventive actions that could allow governments to meet their financing needs while preserving the sustainability of their public debt. He added that indebtedness was a normal process for any economy and that the main challenge was to use the resources efficiently.

In his concluding remarks, the Director General of COFEB noted that public debt in WAEMU countries did not seem to be a cause for concern, based on an assessment of its sustainability and the Union's convergence standards. Public debt appeared to be increasingly inevitable in the light of the declining trend in external public aid and national development imperatives. Hence the increased recourse to commercial debt, especially euro bonds.

In response to the COVID-19 pandemic, the initiatives launched by the BCEAO and multilateral institutions had enabled the countries of the Union to fund programs to address the crisis and stimulate their economies, while at the same time managing the sustainability of their national debts, since resources were made available to them at zero interest or very low rates. WAEMU countries still had some leeway in terms of public debt sustainability, although it was limited. In addition, tax revenues had fallen significantly over the period. Thus, the challenge for the countries was to improve their fiscal performance to consolidate their public debt position and increase the efficiency of public spending. In closing, Dr. Samba Mamadou expressed his thanks to all the participants.

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