Fiscal Policy Framework in West African Monetary Zone (WAMZ): The Matter of Debt Sustainability

Abstract

Fiscal sustainability issue is one of the major concerns in macroeconomics. This article seeks to study the sustainability of fiscal policy of six composing members in West African Monetary Zone with the trend of public finance and debt management over a period .We employed unit root and cointegration test to apply the requirement of the present value of budget constraint. This methodology is generally used in the empirical analysis of the historical fiscal sustainability process. To determine this scenario, three variables (GDP, deficit, debt) have been used, in some points the outcome showed that debt is sustainable in Gambia, Ghana, Guinea, Nigeria and Sierra Leone but not in Liberia.