Business in Cameroon | Cameroon’s President Paul Biya, current Chairman of CEMAC, presided last August 18 in Yaoundé over the Extraordinary Virtual Summit of Heads of State of CEMAC.
The official wants all countries within the region to complete and conclude reform programs with the International Monetary Fund by the end of the year. To date, only Cameroon and Gabon have already done so. Chad has, since July 28, 2021, reached a stall-level agreement, and talks with the Central African Republic are “very advanced”.
According to the IMF, contacts have been made with Congo and Equatorial Guinea but no conclusions are planned in the short term. The missions of August and September 2021 will give more details, the Fund says.
During phase 1, Congo and Equatorial Guinea were lagging, and only concluded their IMF-led program in July and December 2019 respectively, more than two years after the other Cemac countries. In response to criticism, Equatorial Guinea’s oil and gas minister Obiang Lima suggested that his country, which has been in continuous recession since 2013, does not need IMF funds and had only acted out of solidarity for the rest of the sub-region.
According to President Paul Biya, beyond the negative fallout of the current health crisis, the economic recession that hit the subregion in 2020 (-1.7% GDP growth) also has roots in the mixed results of the structural reforms undertaken since the extraordinary summit held in Yaoundé in 2016. For many experts, the reforms were neither well thought out nor well implemented.
If well achieved, the reforms will help lower budget and external deficits and diversify economies (still heavily dependent on unprocessed raw materials).
The so-called second-generation programs should give a new and strong impetus to the region’s economy. After a recession in 2020, CEMAC expects growth of 1.3% in 2021, according to the latest official figures. However, sources at the Bank of Central African States (Beac) condition this rebound in growth on the signing of new agreements with the IMF.
To fund its recovery plan, initially valued at about CFA7,284.9 billion (including CFA2,563.4 billion for the financing of twelve integrating projects), CEMAC is betting on international donors (IMF, World Bank, African Development Bank, France…). But these partners say they would only invest in the plan if the region reaches new programs with the IMF.