CFA Franc Reform : CEMAC Launches Deep Reflection

The 15th Extraordinary Summit of Heads of State and Government of November 22, 2019 in Yaounde mandated the CEMAC Monetary Union and BEAC to carry out a study and make proposals within reasonable time.

The six countries of the Economic and Monetary Community of Central Africa (CEMAC) have unanimously agreed to reform its currency so as to have a stable and strong legal tender capable of giving the economies the boost for better development and population’s livelihood. The direction the reform will take can only be known when the CEMAC Monetary Union and Bank of Central African States (BEAC), mandated by the Heads of State of CEMAC to carry out the study, must have tabled their proposals in the shortest or reasonable time possible. 

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According to point seven of the 16-point resolutions read by the President of the CEMAC Commission, Daniel Ona Ondo, “… concerning monetary cooperation with France on the CFA Franc, the Heads of State decided to engage a deep reflection on conditions and framework of new cooperation. To this effect, they mandated the Central African Monetary Union and BEAC to propose within a reasonable timeframe an appropriate scheme that can lead to the evolution of a common currency.”  

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This is one of the outcomes of the 15th Extraordinary Summit of Heads of State and Government of CEMAC which held in Cameroon’s Presidency on November 22, 2019 under the chairperson of the country’s Head of State, Paul Biya, who doubles as current President of the CEMAC Heads of State Conference. This was in the presence of other CEMAC leaders notably Chad’s President, Idriss Deby Itno, that of Equatorial Guinea, Teodoro Obiang Nguema Mbasogo, President Denis Sassou Nguesso of the Republic of Congo, Faustin Archange Touadera of Central Africa Republic and the Prime Minister of Gabon, Julien Nkoghe Bekale. The presence of the President of the African Development Bank and officials of the International Monetary Fund and World Bank was also acknowledged and appreciated.

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Stock Taking, Prospects

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The Yaounde come together was an opportunity to evaluate the path the CEMAC sub region has covered in implementing reforms proposed during a similar leader’s meeting in Yaounde in 2016. Reason why deliberations had as central theme, “Review of the Economic, Monetary and Financial Situation in the CEMAC Zone and Analysis of its Prospects”.

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Addressing his peers during the opening as well as closing ceremonies, President Paul Biya saluted their determination to implement reforms susceptible to making the sub region resilient, stable and prosperous. He singled out for praise the fact that “The growth rate in our sub-region stood at 1.8% in 2018 and inflation below 3%. Budget and external deficits have reduced considerably. Public debt stands at about 50% of Gross Domestic Product (GDP) for the entire Community. Foreign exchange reserves in the CEMAC zone now stand at over three months of imports, thus ruling out the risk of currency adjustment.”

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Breaking New Grounds

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The visibly positive remarks notwithstanding, CEMAC economies are struggling to stand the test of time and would more than ever before need to innovate to weather the storms. Diversifying the economies that largely depend on the export of crude oil for survival, President Paul Biya noted, should be pursued. All must as well put hands on deck to improve the business climate so as to attract viable investors, especially direct foreign investments, which have the propensity to create substantial jobs and generate wealth. Developing infrastructure and notably integrative projects with the help of development partners like the World Bank, IMF and AfDB also stood out tall in the declaration of the Yaounde summit.

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The CEMAC leaders left Yaounde visibly elated owing to the warm reception served them on arrival and departure from the State House by President Paul Biya’s closest collaborators. The Minister of State, Secretary-General at the Presidency, Ferdinand Ngoh Ngoh and the Minister, Director of the Civil Cabinet of the Presidency, Samuel Mvondo Ayolo took turns, on arrival to usher in the Head of State’s guests to the State House and to see them off on departure. A veritable show of Cameroon’s hospitality that ran throughout the summit.  

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