First of all, I believe the best thing to do is to find out why the wall is so damp and eliminate the source of moisture.
I am assuming this is below grade basement wall, because those tend to be damp?
If it is, you will need to eliminate the source and cause of dampness before you do anything to it. Things like extending the downspouts and sloping the terrain as to divert any rain water away from the foundation wall will improve things a lot.
I'd not recommend you to paint any damp wall because paints and sealants are not able to withstand hydrostatic pressure, and tend to peel off. If it is a latex based paint, and you apply over a damp wall, you might be bringing in even more problems.
Latex is an organic compound... combine it with moisture and you will be creating the ideal environment for mold growth. Mold feeds on organic matter and thrives in humid surfaces.