Heads of State from the six-nation Central African Economic and Monetary Community (CEMAC) will hold an extraordinary summit in Yaounde this Monday, December 16, to discuss the preoccupying macroeconomic situation of the subregion that is facing a financial turmoil.
The one-day extraordinary session of the conference of Heads of State of the bloc comprising Cameroon, Central Africa Republic, Republic of Congo, Gabon, Equatorial Guinea and Chad is holding at a time the subregion is suffocating on the weight of indebtedness and declining economic growth.
The bloc uses a common currency, the Central Africa CFA Franc, which is pegged to the Euro and issued by the Bank of Central African States (BEAC); the Central Bank for the six countries.
Public debt within the community is set to have increased by over 50% with Brazzaville and Libreville straying from the convergence criteria of the CEMAC for economic and monetary stability.
Congo has had difficulties paying civil servants salaries while in Gabon, transport disruptions affected mining and wood production. Oil production has been declining in the Equatorial Guinea, among others challenges.
“This situation is preoccupying both for the CEMAC zone and for international partners,” the Presidency of the Republic of Cameroon said in a press release announcing the meeting. “Indeed, the disruptions observed and the uncertain future evolution in some member countries can affect the whole zone, to the point of seriously compromising its development,” the document added.
CEMAC’s projected growth rate for 2024 is a little over 3%, and there is a high cost of living in the community with an inflation rate of close to 4%.
The leaders will during the Yaounde meeting at the behest of Cameroon’s President Paul Biya and Central Africa Republic’s Faustin Archange Touadera, seek to address these challenges and find ways to stabilize the region’s economy.
The leaders will particularly discuss the region’s declining foreign exchange reserves, which are crucial for funding imports of goods and services. These reserves managed collectively and partly (50%) held in the French Treasury’s Operations Account, have dropped significantly. Currently, they can only cover 2.1 months of imports, excluding the budgetary support already received, according to Business in Cameroon.
In September 2024, BEAC projected that reserves would cover 4.5 months of imports by the end of the year, down from 4.8 months in 2023. However, these projections included the budgetary support already received and expected, particularly from the International Monetary Fund (IMF), for Cameroon, Congo, and the Central African Republic. However, the funds, which should further improve the external reserves of CEMAC states, have not yet been disbursed.
