Surmounting Multiple Shocks : CEMAC States Making Impressive Strides
With a diligent follow up of the Economic & Financial Reform Programme of CEMAC, countries of the sub-region are collectively working to upset the impact of economic, security and humanitarian crises.
Cameroon, Chad, Congo (Republic), Gabon, Equatorial Guinea and Central African Republic; all member countries of the Central African Economic and Monetary Community (CEMAC) have been reeling from multiple shocks, yet the countries have remained steadfast on a joint action to change the tides.
These countries started moving on jerky rails around mid-2014, following economic and financial crises largely caused by a weak exchange rate due to profound and sustained drop in the prices of global commodities, particularly petroleum products. The situation was aggravated by recurrent terrorist attrocities in the Lake Chad Basin, insecurity posed by rebels in CAR and upsurge in violence following the outbreak of socio-political upheavals in the North West and South West Regions of Cameroon. These security situations brought about humanitarian crises, with the different countries grappling with IDPs, refugees and returnees.
To respond to the macroeconomic instability marked by slow growth, drop in foreign reserves, and unsuitable public finance accounts, Heads of State of the sub-region decided to put in place an Economic & Financial Reform Programme of CEMAC. The programme is based on five pillars: budgetary policies, monetary policies and financial system, structural reforms, regional integration and international cooperation.
Since the reformation programme started running following its putting in place in 2016, it has been paying off. In a July 2019 report, the International Monetary Fund said “the regional strategy has helped stabilise the regional economic position thanks to large fiscal consolidation efforts, a tighter monetary policy, and external financial assistance.” The report shows that external position in the sub-region improved while external reserves picked up.
According to officials of the Economic & Financial Reform Programme of CEMAC, member countries have taken appropriate measures to rigorously reduce public spending while increasing the tax base in order to mobilise more resources. Also, CEMAC countries, particularly Cameroon, have carried out significant structure reforms related to economic diversification. Emphases have been laid on human capital development, value-chain addition, and supply of goods and services to the sub-regional market. The free movement of people and goods has become a reality, especailly on air borders, while international cooperation is strong, experts say.
CEMAC is also keen on carrying out projects with sub-regional impact which touch on transport, electrical energy, common market, human capital development and economic diversification. All these worthwhile efforts are being put in place to cushion shocks, without devaluation of the Franc CFA as many had speculated. The Governor of the Bank of Central African States (BEAC), Abbas Mahamat Tolli had said the current slowdown in economic growth in the sub-region is not similar to the one in the early nineties, dispelling rumours that there are plans to once again devalue the Central African CFA Franc. Abbas told Cameroon Tribune that the value of the currency issued by the unique central bank of CEMAC will remain the same for the time being.