The Central Bank of West African States (BCEAO) has opted to keep its primary lending rate to commercial banks at 3.50%, along with the marginal lending window rate set at 5.50%. This decision was announced following the meeting held on Wednesday, March 5, 2025. These rates have remained unchanged since December 16, 2023, when the focus was on reducing inflation within the Union.
The sub-regional issuing authority stated that this decision stems from a thorough analysis of the economic landscape and inflation expectations within the West African Economic and Monetary Union (WAEMU).
Sustained Economic Growth
Overall, the economic activity within the WAEMU is exhibiting strong growth, with a GDP increase of 7.0% recorded in the fourth quarter of 2024, up from 5.8% in the preceding quarter. For 2025, the BCEAO anticipates a growth rate of 6.3%, primarily driven by the extractive, manufacturing, and agricultural sectors. Additionally, a more dynamic bank financing environment is expected, with a year-on-year increase of 6.3% in private sector credit by the end of December 2024, and a projected rise of 8.6% for 2025.
Inflation Trends and Monitoring
Inflation has decreased to 2.9% in the fourth quarter of 2024, down from 4.1% previously, largely due to declining prices of imported food and energy products. For 2025, the BCEAO remains cautiously optimistic, projecting an average inflation rate of 2.7%. However, vigilance is necessary due to potential risks associated with geopolitical tensions, climate uncertainties, and security issues in the sub-region.
Consequently, “the external situation of the Union has improved recently, attributed to rising prices of exported goods, increased sales of hydrocarbons abroad, and the mobilization of external resources by Member States,” as noted by the team led by Jean-Claude Kassi BROU.
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In the upcoming months, the Monetary Policy Committee will persist in observing the trends in inflation alongside the economic, financial, and monetary landscape, and will implement suitable actions to maintain the monetary and financial stability of the Union, it stated.
