CEMAC Summit: Leaders begin meeting today to address regions dire economic situation
By Synthia Lateu
An extraordinary summit of the six-member Central African Economic and Monetary Community, better known by its French-language acronym CEMAC opens today, December 16, 2024 in Yaounde.
The summit aims to address the challenging economic situation affecting the six member states. Summoned by Cameroon’s President Paul Biya, it is jointly organized by Cameroon and the Central African Republic.
Authorities from member states began arriving in the country yesterday, including the transitional president of the Republic of Gabon, Brice Clotaire Oligui Nguema, and the Prime Minister of the Republic of Congo, Anatole Collinet Makosso, who is representing President Denis Sassou Nguesso. The current president of CEMAC, Faustin Archange Touadéra of the Central African Republic, is still expected to arrive as of yesterday evening.
The economies of the sub-region are facing significant risks due to disruptions and weaknesses observed in some countries that have failed to implement the recommended economic and monetary stability measures. Leaders will discuss, among other issues, the region’s declining foreign exchange reserves, which have dropped significantly. These assets, crucial for funding imports of goods and services, can currently cover only two and a half months of imports, excluding budgetary support already received. The decline in CEMAC’s foreign exchange reserves is reportedly mainly due to low repatriation of export earnings by companies in the extractive industries. Despite efforts from BEAC (the region’s central bank) to enforce new regulations, these companies have been slow to comply, with official sources indicating that only 35% of export earnings in foreign currencies have been repatriated.
As of December 31, 2022, BEAC reported reserves for CEMAC peaked at 7 trillion CFA francs, with projections of reaching 9 trillion by the end of 2024. However, this remains far from the target, as estimates suggest reserves will only reach 6.539 trillion CFA francs by the end of the current year—nearly 500 billion less than two years ago and 2.5 trillion below the goal.
The disruptions observed and the uncertain future in some member countries could impact the entire region, potentially compromising its development.
According to Professor Viviane Ondoua Biwole, Director General of the Economic Policy Training Program (GPE) at the University of Yaoundé II , these issues reflect the failure of reforms undertaken since 2017 by several countries and may jeopardize the disbursement of budgetary support expected from the IMF. Such disbursements are essential for replenishing the region’s external reserves and consolidating the currency. Biwole emphasized that only a regional commitment from CEMAC’s highest authorities could resolve the situation.
