CEMAC Zone: Devaluation Of CFA Franc Rejected

The Heads of State of the six CEMAC countries meeting in Yaounde last Friday to address the economic conundrum of the region have rather opted for readjustment and austerity measures summarized in 21 points.

The wind about the possible devaluation of the CFA franc had continued to make its rounds within the economic and monetary community of Central African States; to the extent that the announcement of an extraordinary summit in Yaounde could only be considered a formality. Hours before the summit formally opened at State House, even the activated waterworks which usually indicate a festive event could not take off the dominant heavy atmosphere as the five invited Heads of State came in one after the other beginning from 10 am.

A further source of anxiety came with the arrival of the Managing Director of the International Monetary Fund, Christine Lagarde for a pre-summit audience with President Paul Biya. The IMF presence usually presages some economic hardship measures to take. And so, understandably the third-floor Ambassadors Lounge of State House, where the principal State dignitaries, government ministers and other invited guests were already seated waiting for the formal opening of the summit, was as silent as a cemetery.

And the very formal entrance into the hall minutes later could not improve matters as the invisible sword of Damocles seemed to be hanging over everyone. You could cut silence and anxiety with a knife! When host President Paul Biya took the floor, guests followed his statement on a knife-edge until he finished without any mention of a possible devaluation! First victory for guests and even ordinary citizens watching the event live on national television.

Acting and acting fast

The tone for the summit had been graphically set by the convener. “For long, our sub-region enjoyed macro-economic stability, steady growth, weak inflation… but today, the situation has changed… prices of our raw materials, notably oil, have drastically dropped”. And the President warned that if the situation was left to persist, it could threaten the very foundations of the sub-region and the economic and monetary community at large. So the business of the summit was about what measures to take to stop the trend.

With these few words of warning the Heads of State as well as the IMF Managing Director, Christine Lagarde, the French Finance Minister Michel Sapin, the President of the CEMAC Commission, Pierre Moussa and the Governor of the Bank of Central African States went into a close-door session. Some 45 minutes into the session, accompanying experts were obliged to leave the summit room, causing quite a stir as reporters dashed towards them for the scoop which, eventually could not be. In fact, the Heads of State had requested to work for a while among themselves without aides, ostensibly to be franc to each other as possible.

When they eventually came out of their conclave two hours later at about 1.45 pm, they looked rather relaxed as Cameroon’s Finance Minister Alamine Ousmane Mey took to the rostrum to read out the final communiqué to conclude the summit. If the devaluation of the CFA franc which was very much on many lips did not feature anywhere in the communiqué, the Heads of State, after a careful examination of the impact of the drop in oil prices on the economies of the sub-region, the financial and monetary management of CEMAC and measures to adopt to come out of the difficult economic situation, adopted some 21 points.

The first point which brought some relief about the devaluation palaver, highlighted the fact that it was not necessary to readjust the present monetary parity but, rather to make internal and exterior adjustments based on adequate structural reforms. All the others are around the necessity to close ranks in a show of greater solidarity and the safeguarding of the community. And incidentally, this was the subject of President Biya’s closing remarks in which he praised his peers for showing the much-required solidarity.

He also made a clarion call for the acceleration of integration in the sub-region, the diversification of economies so as to avert situations such as we observe today and the improvement of the business climate in the countries of the CEMAC realm.



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