• Economic and Monetary Review N° 31 - June 2022


    This paper examines the short and long-term determinants of economic growth in Guinea-Bissau, using an ARDL approach (Autoregressive Distributed Lag, Pesaran et al, 2001). The results reveal that the accumulation of physical capital, the labor force and education are the main determinants of economic growth in Guinea-Bissau while trade opening has a mixed effect on economic activity as well as short than long term. These determinants have a higher impact on economic activity in a context of controlled inflation and budget deficit. In view of the specificities of the country and the significant comparative advantages in certain key sectors, major reforms should be undertaken, focusing in particular on four areas, namely, socio-political stability, fiscal consolidation, financial inclusion, and strengthening the production environment.

  • Economic and Monetary Review n° 30 - December 2021 / Volume 2


    The objective of this paper was to assess the medium-term macroeconomic and sectoral impacts of the sanitary measures taken by countries to contain the spread of Covid-19 on West African economies. For this purpose, two scenarios were simulated using a dynamic computable general equilibrium model. The results indicate a moderate but increasing contraction of GDP over time due to reduced exports and investment. Sectoral effects are reflected in a larger fall in manufacturing output than in services and agriculture due to lower household consumption. Our results reveal the need for cross-border regional coordination of the measures implemented. These findings also suggest that trade facilitation measures should be strengthened in the context of subregional economic integration.

  • Economic and Monetary Review n° 29 - June 2021 / SPECIAL COVID 19


    This study aims to assess the impact of public policies during the Covid-19 pandemic on economic aggregates and the sensitivity of these policies to the shock on jobs and specifically on unskilled jobs in Côte d'Ivoire. Using a dynamic Computable General Equilibrium Model, we show that the public policies implemented have mitigated the expected impact of the Covid-19 on the economy. Moreover, the effectiveness of these policies is sensitive to the level of the shock on labor supply and particularly to the shocks on the hours worked by unskilled workers. Thus, policies that reduce the effect of the pandemic on hours worked (unskilled and that cannot be done through teleworking) are more likely to reduce the negative impact of the pandemic and foster greater resilience of the economy.

  • Economic and Monetary Review n° 28 - December 2020


    The financial reforms carried out by UEMOA do not immunize it from recurrent financial crises on a global scale. This article examines the effect of financial instability on the relationship between financial development and economic growth in 7 WAEMU countries. The GMM System method is used to estimate a non-linear model over the period 1981-2015. Our results show that financial development is good for growth. On the other hand, financial instability, measured by an indicator, cancels out the beneficial effect of financial development on growth. In order to preserve the liberal character of the financial sector and allow banks to grow, the study supports the idea of continued reforms in the face of financial and economic upheavals.


  • Economic and Monetary Review n° 27 - June 2020


    This article attempts to determine an inflation target for WAMU. For this, the optimal inflation threshold, defined as the level of inflation that maximizes economic growth, is determined endogenously using the PSTR method developed by González et al. (2005). Using data covering the period 1980- 2016, we find that the relationship between inflation and economic growth is likely to be non-linear in WAMU. Formally, we note that the optimal inflation threshold is around 3.9%. This non-linear relationship between inflation and economic growth in the WAEMU countries is robust to sensitivity analyzes, resulting in thresholds of 2.7% to 4.1%. These results imply an inflation target between 2% and 4% around 3%. This objective, fundamentally not calling into question the target of 2% defined by the Monetary Policy Committee of the BCEAO, suggests a slight easing of monetary policy to achieve higher economic growth in the WAMU.


  • Economic and Monetary Review n° 26 - December 2019


    In the context of the worrying new rise in central government debt in ECOWAS, this article determines through a non-linear approach, the debt threshold not to be exceeded so that central government debt has a positive effect on economic growth. By adopting Hansen's (1999) approach, the analysis carried out over the period 2007-2016 reveals the existence of a debt threshold estimated at 30.71% of GDP, threshold below which any additional debt has a positive effect on economic growth. Conversely, above 30.71% of GDP, central government debt has a negative impact on economic growth. The threshold estimated in this article corroborates those in the recent literature. Nevertheless, it should not be considered as a static, optimal threshold that could compromise the validity of the budgetary norm in force in the region, which limits the debt to 70% of GDP. The gap between the two thresholds is due to the fact that the estimated threshold is endogenous, i.e. it takes into account the debt behaviour over the period considered in this paper. The article then proposes economic policies for making fiscal policies more effective, for slowing the rise in debt levels, and finally discusses the potential consequences of the rapid increase in debt on the West African regional monetary integration process.