2020 is expected to end with growth of 2.4%, on average, in the UEMOA area. EU ministers are mainly concerned about possible budgetary slippages, and call for increased Community support.
The Council of Ministers of UEMOA (West African Economic and Monetary Union (UEMOA) held its second ordinary session of the year, by video-conference, under the chairmanship Sani Yaya, Minister of Economy and Finance of Togo.
The ministers took note with satisfaction of the final figures for 2019: economic growth stands at 6.1% (against 6.4% in 2018). Growth was driven, last year, by all member countries, in a context of price control (-0.7% on average).
The Council welcomes “The efforts of the Member States in the area of public financial management”, five of which met the top three criteria in 2019.
Of course, 2019 already seems far away, in the current context. “The coronavirus pandemic is deeply affecting the economies of the member states. Union ministers still expect economic growth to be around 2.4% this year, up from 6.6% earlier this year. In the context of the fight against the Covid-19 epidemic, they predict a “worsening of the overall budget deficit”, which would represent 5.2% of GDP against 2.5% initially planned.
However, the Council encourages the Member States to continue efforts to limit the spread of the pandemic. It therefore adopted the Recommendation on the economic policy guidelines for the member states for the year 2021.
With this recommendation, the Council invites its members to continue implementing the measures contained in the health, economic and social response plans to Covid-19. It also invites countries to continue efforts to mobilize domestic resources, and to take all necessary steps to benefit from the support of the international community, in particular, for the relief of external debt and the obtaining of new concessional resources.
Finally, the Council urges the Member States “to implement budgetary policies allowing a return to budgetary consolidation after the crisis”. If the Convergence, Stability, Growth and Solidarity Pact is suspended, governments must nevertheless continue to transmit their data to the Union.
Confirmed support for the banking system!
The collective budget consecrates the updating of the 2020 economic forecasts following the occurrence of the Covid-19 pandemic and the strengthening of solidarity within the Union through the acquisition by the Commission of medical equipment against the disease. The Council of Ministers requests the UEMOA Commission to examine the possibility of granting member states additional support.
The Council welcomed the measures already implemented by the Central Bank (BCEAO) to mitigate the impact of the Covid-19 pandemic on the banking system and the financing of the economy.
In addition to these measures, the Council decided to extend the period of implementation of the transitional provisions of the prudential framework applicable to credit institutions and financial companies of the West African Monetary Union by one year.
It is a question of preserving the financing of the economies of the Union as well as the solidity of the credit institutions and the financial stability of the zone.
Note that on a more “ordinary” level, the Council adopted a series of normative or legislative provisions. Among them, the Directive on the harmonization of the tax regime for losses on doubtful and disputed loans recognized by banks and financial institutions. This text aims to harmonize the tax regime applicable to these losses by authorizing their deduction for the determination of the tax result of credit institutions.
The Council amended the directive of November 1997 adopting a legal regime for approved management centers (CGA) in the member countries.
This revision aims to “revitalize the functioning of CGAs by diversifying the legal form of these bodies and by widening the range of advantages provided for them and their members”.
Finally, it should be noted that the Council has examined and adopted the regulation establishing a diploma in accounting and financial expertise (DECOFI) within the member countries.
Reference: http://www.gouv.ci/_actualite-article.php?recordID=11078
