CEMAC sounds the alarm in the face of the economic challenges of Central Africa. What are the key measures adopted during this extraordinary session in Yaoundé to avoid a crisis? The future of the region at stake…
Faced with the growing risks of economic crisis, the Central African Economic and Monetary Community (CEMAC) met Monday in Yaoundé for an extraordinary session. The objective: to appreciate the scale of the challenges and call for collective and concerted efforts.
According to a source close to the matter, Cameroonian President Paul Biya underlined the “particularly difficult” context and the need for concrete actions to avoid a major economic and financial crisis in the region.
A call to action on several fronts
The final CEMAC press release lists a series of slogans to face headwinds:
- Continuation of structural reforms
- Budget consolidation
- Prudent debt policy
- Management of banks' exposure to sovereign risks
- Repatriation of currencies linked to mining and oil activities
Member States (Cameroon, Central African Republic, Congo, Gabon, Equatorial Guinea and Chad) reaffirmed their commitment to responsible debt management. They also called on their international partners to increase the mobilization of financial resources to support the structural transformation of the region.
The challenge of repatriating oil revenues
A key issue raised in the press release concerns the repatriation and domiciliation of oil revenues, the region's main resource. CEMAC countries want increased support from their international partners in this crucial process for their finances.
Despite recent rumors of a possible devaluation of the CFA franc, this sensitive issue was not directly addressed in the final communiqué.
Fragile progress under threat
Although progress has been made since 2016 in the implementation of certain structural reforms, the level of foreign exchange reserves remains worrying. Having gone from 2.3 months in 2016 to 4.6 months in 2023, it is experiencing a downward trend with “unfavorable” prospects for the price of raw materials, underlines the press release.
A joint analysis by the IMF and the World Bank published in April 2024 already drew a harsh observation. Despite years of sustained oil revenues and increased public spending, real incomes in CEMAC have stagnated over the past three decades. The economy remains poorly diversified, too dependent on oil and with a still untapped domestic regional market. Income inequality remains high and the implementation of reforms is considered slow and stagnant.
Contrasted growth prospects
Despite recovery policies, regional economic growth fell from 3.3% in 2022 to 2.3% in 2023. It should be at 3.7% in 2024 then 3.0% in 2025, driven in particular by performances of Chad and Cameroon, according to the official file released in Yaoundé.
Inflation also remains a concern. At 5.4% in 2023, the community threshold has no longer been respected since 2022, linked to the increase in prices of food products following the war in Ukraine.
The CEMAC budget balance is expected to remain in deficit at -0.7% in 2024 and deteriorate to -1.9% in 2025. This deterioration would be mainly due to the situation in Gabon, with the increase in expenditure linked to reforms and development measures put in place by the country's new authorities.
An uncertain future
This extraordinary session of CEMAC in Yaoundé confirmed the urgency of collective and coordinated action in the face of the region's economic and financial challenges. Although progress has been made, the situation remains fragile and the outlook uncertain.
The ability of Member States to implement the necessary reforms, prudently manage their debt and diversify their economies will be decisive for the future. The support of international partners, particularly in terms of resource mobilization and support for reforms, will be just as crucial.
Central Africa today finds itself at a decisive turning point in its economic development. The decisions taken and the actions carried out in the months and years to come will shape the destiny of this strategic region, rich in resources but facing numerous challenges.
Despite recent rumors of a possible devaluation of the CFA franc, this sensitive issue was not directly addressed in the final communiqué.
Fragile progress under threat
Although progress has been made since 2016 in the implementation of certain structural reforms, the level of foreign exchange reserves remains worrying. Having gone from 2.3 months in 2016 to 4.6 months in 2023, it is experiencing a downward trend with “unfavorable” prospects for the price of raw materials, underlines the press release.
A joint analysis by the IMF and the World Bank published in April 2024 already drew a harsh observation. Despite years of sustained oil revenues and increased public spending, real incomes in CEMAC have stagnated over the past three decades. The economy remains poorly diversified, too dependent on oil and with a still untapped domestic regional market. Income inequality remains high and the implementation of reforms is considered slow and stagnant.
Contrasted growth prospects
Despite recovery policies, regional economic growth fell from 3.3% in 2022 to 2.3% in 2023. It should be at 3.7% in 2024 then 3.0% in 2025, driven in particular by performances of Chad and Cameroon, according to the official file released in Yaoundé.
Inflation also remains a concern. At 5.4% in 2023, the community threshold has no longer been respected since 2022, linked to the increase in prices of food products following the war in Ukraine.
The CEMAC budget balance is expected to remain in deficit at -0.7% in 2024 and deteriorate to -1.9% in 2025. This deterioration would be mainly due to the situation in Gabon, with the increase in expenditure linked to reforms and development measures put in place by the country's new authorities.
An uncertain future
This extraordinary session of CEMAC in Yaoundé confirmed the urgency of collective and coordinated action in the face of the region's economic and financial challenges. Although progress has been made, the situation remains fragile and the outlook uncertain.
The ability of Member States to implement the necessary reforms, prudently manage their debt and diversify their economies will be decisive for the future. The support of international partners, particularly in terms of resource mobilization and support for reforms, will be just as crucial.
Central Africa today finds itself at a decisive turning point in its economic development. The decisions taken and the actions carried out in the months and years to come will shape the destiny of this strategic region, rich in resources but facing numerous challenges.
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