The BCEAO maintains its monetary policy in the face of solid growth in the UEMOA.

The Central Bank of West African States (BCEAO) has decided to keep its key interest rates unchanged during the regular meeting of its Monetary Policy Committee (MPC) held on March 5, 2025, in Dakar. Thus, the key rate at which it refinances banks remains set at 3.50%, while the interest rate on the marginal lending facility stays at 5.50%. This decision is part of a cautious approach, despite improvements in several economic and financial indicators within the West African Economic and Monetary Union (UEMOA). 

The UEMOA economy shows robust dynamics, with Gross Domestic Product (GDP) growth estimated at 7.0% in the fourth quarter of 2024, compared to 5.8% in the previous quarter. For the entire year, real GDP growth stands at 6.2%, up from 5.3% recorded in 2023. This expansion is primarily supported by strong performance in the extractive, manufacturing, and agricultural sectors, as well as an acceleration in bank credit to the private sector, which saw a year-on-year increase of 6.3% in December 2024, compared to 5.8% three months earlier. This trend is expected to continue in 2025, with anticipated loan growth of 8.6%. 

Inflation, on the other hand, continues to decline, reaching 2.9% in the fourth quarter of 2024, down from 4.1% in the previous quarter. This easing is attributed to falling prices of imported food and energy products, as well as improved food production. According to BCEAO forecasts, inflation is expected to decrease to 2.7% in 2025, following a level of 3.5% in 2024. However, some risks remain, including geopolitical tensions, the effects of climate change on agricultural production, and insecurity in certain regions of the Union. 

Furthermore, the external situation of the UEMOA is improving, driven by rising exports, increased sales of hydrocarbons, and greater mobilization of external financing. Thus, foreign exchange reserves increased from 2,942.9 billion CFA francs in November 2024 to 3,625.7 billion CFA francs in December, representing an increase of nearly 23%. 

In light of these developments, the BCEAO reaffirms its commitment to closely monitor the economic and financial situation and states that it is ready to take necessary measures to ensure the monetary and financial stability of the Union. 

Source: Agence Ecofin, MEPD Web Portal Editorial Team