Foreign Currency Exchange : CEMAC Publicises New Legislation
The instrument, stakeholders said in N’Djamena yesterday, will contribute to external stability of the local currency and adapt to economic and financial mutations notably electronic payment.
Officials of financial institutions within the Central African Monetary and Economic Community, CEMAC, are now better versed with the new legislation related to foreign currency exchange and are back in their countries to lead its implementation. They took part in a day-long workshop in the Chadian capital yesterday July 23, 2019 on disseminating the new legislation which went operational across the six-member countries of CEMAC on March 1, 2019. Abbas Mahamat Tolli, Governor of the Bank of Central African States (BEAC), who is also Chairman of the Central African Banking Commission, presided at the opening ceremony at the Hilton.
What Motivated the Change?
Going by Mr Tolli, BEAC’s desire to ensure the external stability of the local currency via optimizing external financial transactions, in such a way as to limit illegal financial flows as well as maximize the entry of traceable foreign currencies motivated the review of hitherto existing legislations on foreign currency exchange. The BEAC Governor told officials of financial institutions that turned up for the sensitization campaign in N’Djamena that the measure is aimed at contributing to external stability of the currency, adapting to new developments notably new methods of electronic payments, the least of which is not the fight against money laundry and financing of terrorism. It is said that the new legislation is promising as the result thus far shows an increase in foreign exchange reserves moving from 605.2 billion to over 1.376.1 billion in about five months of implementation. He urged stakeholders to strive for an optimal implementation of the regulation for the good of the population and respective economies.
Major Innovations of the Legislation
With the new rule, amounts carried out of the sub region per trip per person either cash, bank transfer or prepaid card must not go beyond FCFA 5 million. And if it must go beyond the threshold, the exporter must present convincing justifications, failing which, the customs administration would have to confiscate the surplus and hand it to the central bank. Participants at the N’Djamena workshop saluted the innovation indicating that with the old text, one could not travel with foreign currency worth beyond FCFA 200,000. Business persons carrying out operations out of the CEMAC sub regions are also by the new legislation obliged to inform the central bank and other competent authorities on the nature of their transactions (goods or services, gifts…). However, expatriates resident within CEMAC can send part of their income home upon presentation of the resident papers. It emerged from the workshop that the central bank, COBAC and local ministries in charge of finance will work in synergy to ensure the respect of the legislation and dish out sanctions where and when the instrument is flouted.
On Alleged Scarcity Of Foreign Currencies!
Even though CEMAC countries import more than she exports, in quality and quantity, which economists say could result in shortage of foreign currencies within, some bank officials told CT in N’Djamena that their poor mastery of the text also contributed to difficulties in easily accessing foreign currencies as has been the case in the recent past. They promised to align their operations to the new rule so as to strike a good balance for the population and economies.