The Central Bank of West African States (BCEAO) kept its main policy rate unchanged at 3.50% on 11 September 2024, following an ordinary meeting of its Monetary Policy Committee in Dakar chaired by Governor Jean-Claude Kassi Brou. The marginal lending facility rate was also held at 5.50%. Both rates had been in force since 16 December 2023.
The BCEAO conducts monetary policy for the eight member states of the West African Economic and Monetary Union (WAEMU): Benin, Burkina Faso, Côte d'Ivoire, Guinea-Bissau, Mali, Niger, Senegal and Togo. The committee said its decision was based on an analysis of recent price developments, economic activity and the union's external position.
INFLATION ABOVE TARGET RANGE
Inflation in the union rose to 4.1% in the second quarter of 2024 from 2.9% in the first quarter, above the central bank's 1–3% target range. The BCEAO attributed the increase to a less favourable 2023/2024 agricultural season, supply difficulties linked to security challenges in some areas, higher international food commodity prices and increases in energy costs in certain member countries.
The central bank forecast average inflation of 3.7% for 2024 and expected it to return to the target range in 2025.
GROWTH FORECAST AT 5.9% FOR 2024
The committee described economic activity in the union as dynamic. Real GDP grew by 5.3% year on year in the second quarter of 2024, and the BCEAO forecast growth of 5.9% for the full year, up from 5.3% in 2023.
Credit to the economy rose by 5.3% year on year at the end of June 2024. The committee also noted an improvement in the union's external position, supported by favourable terms of trade and increased mobilisation of external resources by member states.