US Congress threatens to cut IMF support to CEMAC countries
By Synthia Lateu
The US Congress has signed a bill, known as the CEMAC Act, threatening to block the International Monetary Fund’s (IMF) support for the countries of the Central African Economic and Monetary Community (CEMAC) due to ongoing disputes related to oil funding.
The act mandates that the IMF publicly clarify that any funds provided to the Bank of Central African States (BEAC) by international oil companies (IOCs) for site rehabilitation will not be counted toward the gross foreign exchange reserves of any member country.
The document states, ” By refusing to clarify that these restoration funds will not count towards gross foreign exchange reserves, the IMF has misled the CEMAC member states and directly put tens of billions of dollars of IOCs investment in the region at risk.”
If the stipulated conditions are not met, the bill emphasises that the United States will oppose an increase in the IMF quota for any CEMAC member state or any modifications to the exceptional access policy of the IMF for these countries.
The bill specifically targets new regulations imposed by BEAC, which include an arbitrary deadline of April 30, 2025, for IOCs to sign an agreement, with penalties of up to 150 percent of the environmental restoration fund to be enforced starting May 1, 2025.
CEMAC member states—Cameroon, the Central African Republic, Chad, Equatorial Guinea, Gabon, and the Republic of Congo—are seeking to have these funds redirected to regional institutions to bolster their foreign exchange reserves. However, lawmakers have stressed that restoration funds are strictly intended for restoration work costs and do not meet the IMF’s criteria for inclusion in foreign exchange reserves.
The bill notes, ” Implementation of this regulation is expected to create a lasting negative impact on oil and gas investment in the Central African region, and will drastically compound an already challenging investment environment.”
In a communiqué jointly signed by the heads of state and representatives of the six member countries following an extraordinary summit in Yaoundé in December 2024, concerns were raised regarding the downward trend in foreign exchange reserves. These reserves, which rose from 2.3 months’ worth of imports in 2016 to 4.6 months in 2023, have since declined in 2024. This decline has been attributed to the low repatriation of export earnings by companies in the extractive industries.
