Log in / Register
Home arrow Economics arrow Accelerated Economic Growth in West Africa
< Prev   CONTENTS   Next >

4 Evolution of Macroeconomic Indicators and Economic Convergence in WAEMU

The economic and financial situation of the Member States of the Union during the 1980s and early 1990s was distinguished by a worrying slowdown in economic growth, persistently high fiscal imbalances, and strong pressure on the currency.

The implementation of a comprehensive strategy focusing on changing the parity of the CFA franc, and the accompanying Treaty of WAEMU in 1994, provided a new impetus for the adjustment process, and allowed the Union, over the period 1994–1998, to reconnect with economic growth, with better control of inflationary pressures and reduced fiscal imbalances.

Thus, economic activity has picked up significantly, with an average annual growth of 5.1 % per year. This recovery in activity has slowed since 1999, following the amplification of exogenous shocks, the deterioration of the sociopolitical climate in some countries (the case of Ivory Coast), and the implementation of inappropriate economic policies, reducing the rate of economic expansion from 2 to 3 % per year on average from 2000 to 2006. During this period, the level of growth remained below the population growth rate, estimated at 3 %, and well

Fig. 1 The dynamics of the economic growth of the Union. Source: Author from World Development Indicators (WDI 2014)

below the economic growth rate of 7 % required to effectively fight against poverty (WAEMU 2006).

It appears from Fig. 1 that the average per capita income growth in WAEMU economies experienced two distinct phases: (i) The phase of structural adjustment programs, from 1980 to the late 1990s, along with a decline in GDP per capita; (ii) A recovery phase after the 1994 devaluation.

However, due to insufficient budgetary resources and a significant decline in foreign aid, investments in basic infrastructure have registered a decline of 1 % per year since 1999.

5 Evolution of Basic Infrastructure in WAEMU

This section provides an overview of basic infrastructure in WAEMU with emphasis on roads, energy, telecommunications and access to new information technologies. The dynamics of each of these basic infrastructure components are presented in Figs. 1, 2, and 3.

5.1 Dynamics of Basic Infrastructure in WAEMU from 2000 to 2010

During the 2000s, the growth of investments in road and energy infrastructure has largely been lower than the population growth, as shown in Figs. 3 and 4. Apart from the telecommunications sector, which recorded significant growth, all sectors declined in the 2000s. The most significant improvements were observed in the sector of information and communication technologies sectors which experienced true expansion from 2005 onwards (Fig. 5).

Fig. 2 The dynamics of the per capita GDP in each WAEMU member-countries. Source: Author from World Development Indicators (WDI 2014)

Fig. 3 Dynamics of road infrastructure in WAEMU members-countries from 2000 to 2010.

Source: Author from Africa Infrastructure Development Index (AIDI 2013)

However, the inversion of the yield curve indicators on access to electricity and ICT from 2009 onwards shows that significant investments were made in these types of infrastructure by most countries of the Union (Figs. 4 and 5).

5.2 Regional Policies and Prospects of Basic Infrastructure in WAEMU

• Road Infrastructure

The common transport policy in WAEMU focuses on the network of interconnecting roads through transit corridors that determine the production and international trade of landlocked countries such as Mali, Burkina Faso, and Niger.

Fig. 4 Access to electricity in WAEMU member-countries 2000–2010. Source: Author from Africa Infrastructure Development Index (AIDI 2013)

Fig. 5 Access to phone services (fixed and mobile) in WAEMU member-countries. Source: Author from Africa Infrastructure Development Index (AIDI 2013)

The hinterland of West Africa (Burkina Faso, Mali, and Niger) is connected to the sea through several corridors including ports in Abidjan, Dakar, Lome´, and Cotonou. The most significant constraints to the development of the international exchange of goods relates to the cumbersome procedures for customs control and police.

WAEMU common policy aims to improve the efficiency and fluidity of road transit corridors in order to reduce transaction costs and improve the economic performance of the Union. The physical existence of road infrastructure is not viewed as the main obstacle, although it is still necessary to maintain the quality and the fluidity of existing roads through effective implementation of institutional reform for roads.

• Energy Infrastructure

The common energy policy of WAEMU countries should help to ensure that in 2030, the entire population of the Union has access to cheap energy, in a broad market exchange integrated across West African countries. The interconnection between Coˆte d'Ivoire and Mali will deliver power to Senegal for which demand is structurally unsatisfied. Coˆte d'Ivoire is, moreover, already interconnected with Ghana, who, in turn, is already connected with Togo and Benin, the latter of which is connected to Nigeria.

The rate of access to electricity is forecast to increase from 17 % in 2007 to 80 % in 2020 and 100 % in 2030, thus achieving the goal of universal access to electricity (Guillaumont et al. 2012).

• Information and Communication Technologies (ICT)

The telecommunications sector has undergone significant institutional changes in recent years, namely the privatization of phone services (Plane 2001a, b). An increase in competition resulting from these privatizations accelerated the decline in the cost of phone service and the subscriber rate.

With a focus on the regional integration of services, the Union provides regionalized regulation to promote competition and fair treatment of operators. Access to the internet is also a problem within the major regional integration projects. The continually high cost of internet is explained by the price of international connectivity, which is determined by access to the submarine fiber optic cable, but also by the inability to create competition within the industry.

Greater openness to competition from operators and new infrastructure services could significantly improve internet access in the medium term.

Found a mistake? Please highlight the word and press Shift + Enter  
< Prev   CONTENTS   Next >
Business & Finance
Computer Science
Language & Literature
Political science