Bond Debt and Poverty in the WAEMU Area

Abstract

In an economic environment where WAEMU (West African Economic and Monetary Union) countries are increasingly turning to the domestic financial market, the objective of this paper is to empirically investigate the link between public debt service by bond issue and poverty on the other hand over the period 2000-2020. This paper uses the Pool Mean Group (PMG) method to estimate a linear model in panel data, after cointegration tests. As a proxy for poverty, we use household consumption and the Human Development Index (HDI), given the lack of sufficient data on poverty rates and the income of the poorest households. The results conclude that the repayment of public debt, resulting from public securities on the stock market, is a source of poverty. The study therefore supports the idea that WAEMU countries should not burden the population with debt repayment by imposing new taxes and reducing subsidies. In addition, the stock market authorities should make it easier for households to access this market.