Monetary Agreements Reform and Issue of the Key Fiscal Convergence Criterion in the West African Economic and Monetary Union (WAEMU)

This paper estimates a fiscal deficit threshold that maximizes economic growth and is favorable to business cycles synchronization given the compliance of countries. The analysis covers eight countries form West African Economic Monetary Union (WAEMU) across 1990-2018. Our results show 11.42% Gross Domestic Product (GDP) which should not be exceeded fulfills aforementioned conditions. Since debt relief program in 2006, however, this has been reduced from 11% 3.97%. Therefore, with key convergence criterion limiting 3% GDP force pro-growth synchronization. However, even if seems rigorous for discipline can maintained, it could adjusted 4%. discusses advantages proposed adjustment.