Bloomberg News

West African States Must Contain Inflation, Central Bank Says

June 02, 2011

June 2 (Bloomberg) -- The eight nations in the West African monetary union must boost agricultural production, manage public finances better and improve their business environments in order to contain inflation, the union’s central bank said.

The Dakar-based central bank expects inflation in the countries that share the CFA franc to accelerate to 3.9 percent by the end of June, from 3.7 percent in March, according to a statement e-mailed yesterday. Inflation will be driven by increases in global rates for food and fuel, it said.

“In the medium term, the projections for inflation are in line with the goal of price stability in the union,” the central bank said. Inflation may ease as trade resumes between the region’s landlocked countries -- Niger, Burkina Faso, Mali - - and its principal port nation, Ivory Coast, which is still recovering from its post-election conflict, it said.

“The end of the political crisis in Ivory Coast, and the support of the international community for the reconstruction of the country significantly improves the macroeconomic forecast for the region, notably beginning around 2012,” it said.

The West African CFA franc, which is pegged to the euro, is used in Benin, Burkina Faso, Togo, Guinea-Bissau, Mali, Ivory Coast, Niger, and Senegal.

--Editors: Ben Holland, Heather Langan.

To contact the reporter on this story: Drew Hinshaw in Dakar via Accra at ebowers1@bloomberg.net

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net


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