GDP growth in W. African Economic and Monetary Union drops to 3.3 percent in 2006

The GDP growth rate of the member states of the West African Economic and Monetary Union (UEMOA) has dropped to 3.3 percent in 2006 from 4 percent in 2005, Central Bank of West African Countries (BCEAO) announced on Tuesday.

"The economic performance of member states in 2006 was affected by negative external factors as well as by the challenges facing the energy and export sectors," according to a report issued by the administration committee of the BCEAO, which had held a meeting in Dakar recently.

It called upon member countries "to undertake concerted efforts in the implementation of reforms in these sectors which are key to the realization of strong and sustainable growth".

The BCEAO also said that it was necessary to "relieve the inflationary pressures" within the union, which are "mostly" caused by the impact of the "good agricultural returns" realized between 2006 and 2007 on the prices of agricultural products.

By the end of September, the average price of consumer products increased by 2.4 percent compared to 4.5 percent in the same period in 2005.

However, "the worldwide high price of oil is putting pressure notably on the market price of certain items," the report noted.

The BCEAO also raised concern over the "deterioration of public financial situation due to the acceleration in the investment oriented to the poverty reduction strategies".

Nevertheless, the BCEAO indicated that "the overall economic situation remained favorable" with the accumulation of foreign exchange reserves expected to continue. The available reserves at the end of 2006 had increased by 118.2 percent, ensuring more than five months' worth of imports of goods and services.

The UEMOA is an institution that promotes economic integration among eight countries sharing a common currency, the CFA franc, namely Benin, Burkina Faso, Cote d'Ivoire, Guinea, Mali, Niger, Senegal and Togo.

Source: Xinhua