Meeting of Finance Ministers of the Franc Zone October 4 to 5, 2017 in Paris

Finance Ministers, Central Bank Governors and Presidents of the regional institutions of the Franc Zone met on Thursday, 5 October 2017 in Paris, under the chairmanship of Mr Bruno LE MAIRE, Minister of Economy and Finance of France.

In an economic context marked by a moderate recovery in growth across the African continent, Finance Ministers, Central Bank Governors and Presidents of regional institutions reiterated their desire to work for the development of the Franc Zone and to implement economic policies adapted to the interests of the populations. They reiterated their willingness to continue to make the Franc Zone a space for open dialogue and coordination of public policies, in conjunction with main donors and institutions. Such a space of dialogue, which has a unique dimension in Africa, even on a global scale, remains a factor of stability and development.

Participants in the meeting noted, on the basis of information for the most part already available at the time of the previous meeting in Abidjan in April 2017, the decline in convergence. They particularly noted the risks arising from rapid re-indebtedness, caused by large fiscal deficits, and likely to call into question the internal and external balances of the States concerned. To ensure the proper functioning of monetary unions, Finance Ministers, Central Bank Governors and the Presidents of Regional Institutions agreed on the need for a coordinated approach.

However, participants noted two positive aspects of convergence and coordination. On the one hand, they welcomed the setting up, since the Abidjan meeting last April, of an internal tool for regular monitoring of the implementation of recommendations made during their meetings. The gradual build-up of this tool during the forthcoming six-monthly meetings will help to enhance their operational character and improve monetary stability in the area. On the other hand, participants noted that all WAEMU member countries (whose growth is maintained for several years and should remain by 2020 at more than 6%, well above the average growth of African countries) concluded a program with the IMF, which contributes to strengthening budget management and coordinating the reforms implemented. A similar dynamic is observable within CEMAC, where four countries concluded a program with the IMF and the other two are under negotiation. Measures taken within the framework of programs and provision of funding from the IMF, the World Bank, the African Development Bank, the European Union and France, contribute to the improvement of confidence and progress since spring.

Finance ministers, Central Bank Governors and Presidents of regional institution then discussed on how to mobilize more non-oil tax revenue and agreed on a set of principles in this regard. In the UEMOA zone, as well as in the CEMAC zone and in the Comoros Union, and in parallel with the strengthening of public financial management, such increased mobilization of tax revenues will be achieved through the broadening of tax bases, the strengthening of transparency and capacity building of tax administrations, the harmonization of certain rules at sub-regional level, as well as good cooperation, taking advantage of new digital tools among all the public and private actors concerned. Under these conditions, participants consider possible an increase in the tax rate in the countries of the Franc Zone, which will allow a favourable investment dynamics for development, while avoiding another unfavourable dynamic of rapid re-indebtedness in regional and international markets. In order to continue the dialogue and coordination of fiscal policies, the participants underlined the interest of the multi-donor collaborative platform dedicated to it and agreed to extend their work for the April 2018 meeting.

During lunch, the directors representing France and French-speaking African countries at the World Bank and the IMF came back to the macroeconomic situation in sub-Saharan Africa. They also discussed the upcoming annual meetings of the IMF and the World Bank, which will be held in Washington DC from October 13 to 15, 2017. On this occasion, they discussed the next steps in the review of the debt sustainability framework of the World Bank and connected it to the need for increased tax revenue mobilization.

Finally, they warmly thanked the French authorities for organizing this meeting of the Franc Zone, as well as for welcoming participants.

They accepted the invitation of the Congolese authorities to hold the next meeting of Finance Ministers of the Franc Zone in Brazzaville.

Paris, October 5, 2017.