Central Africa: CEMAC - Economic and Monetary Community of Central Africa

  Contacts

Biography

Mr. Jean Nkuete, Executive Secretary of CEMAC

Mr. Jean Nkuete, a Cameroonian national, was appointed Executive Secretary of CEMAC at the Malabo Head of States Meeting in 1999 to revitalize the organization. His mandate was extended for another five years term in early 2005. Prior to joining CEMAC, he held several senior level positions in the Cameroon Government including Secretary General to the Presidency and Director of the Regional Central Bank Agency in Douala. He holds an Italian PhD and has written several books on economic development issues.

Institutional Background

• Created in March, 1994, the Communauté Economique et Monétaire d’Afrique Centrale (CEMAC), previously known as UDEAC (Union Douanière et Economique de l’Afrique Centrale), is a customs and monetary union among the former French Central African countries including: Cameroon, the Central African Republic, Chad, the Congo ( Brazzaville), Equatorial Guinea, and Gabon. Along with the Western CFA Zone, it is one of the important regional groupings in Africa.

• The supreme organ of the CEMAC is the Conference of the Heads of States which meets at least once a year to define the overall guidelines of the grouping’s policy. The CEMAC Executive Secretariat is charged with monitoring the implementation of agreed measures. The main policy directions for the Community are in creating a fully functional and effective customs union, ensuring a system of macroeconomic surveillance and promoting sectoral policies that help create a common market for goods, capital, and services.

CEMAC Selected Social Indicators (latest year available 1997-03)

 

• The recent policy environment for the CEMAC region has been shaped by increasing oil prices, higher oil output and revenues, and the sharp appreciation of the CFA (along with the Euro) against the US dollar. The zone as a whole benefited from a substantial increase in growth (reaching nearly 8 percent in 2004), inflation below Euro area levels, and substantial increases in foreign exchange reserves. These overall positive economic developments, however, pose macroeconomic challenges for the conduct of monetary and fiscal policies. Additional policy challenges relate to the use of oil related inflows and to setting common policies in the context of significant cross-country differences in economic performance. Since the ratification of the CEMAC treaty in 1999, the subregion has been moving towards fuller economic and monetary integration. Macroeconomic convergence has improved with greater country adherence to both fiscal and non-fiscal criteria of convergence modeled on the European Union experience. In the last two years, government fiscal and external balances have been strengthened, and the reserves of the BEAC have increased. The economies grew at 3.0% in 2000, 5.4% in 2001, 4.5% in 2002 and 4.7% in 2003 reflecting favorable world oil prices and an improved management of public resources. There has been some progress on other fronts. A regulatory framework governing microfinance institutions has been adopted. Banking restructuring has proceeded rapidly, with bank compliance with key financial ratios improving throughout the zone. With the assistance of the EU, the CEMAC is developing a regional road network (1999-2010) that will connect the capitals of the Central African countries.
     
• The customs union still does not function efficiently. Trade within the region amounts to: Imports — 2% of total imports; exports — 1% of total exports. Absence of economic complementarities and administrative hurdles continue to hinder the flow of goods, services, and people in the sub-region. Intra-regional trade still remains considerably low at below 10%, even in comparison to its West African counterpart. Although there is some mobility of goods and people across borders, discretionary behavior by customs officials and local authorities creates an impediment to a common economic space. Regional integration is still not viewed in the zone as a vehicle for great integration in the global trading system.

• The volatility of oil prices presents a cause for concern. An oil price decrease will hurt the competitiveness of CEMAC countries and will worsen external and fiscal balances. Thus, there is a major need to restrain spending and monitor oil resources carefully in order to achieve fiscal discipline and successful macroeconomic convergence in the coming years. While oil production is projected to increase in Equatorial Guinea and Chad in the future, the oil sector continues to contract in Cameroon, Gabon, and the Republic of Congo, thus threatening to weaken their economic performance over the next decade. Furthermore, the political momentum for regional integration needs to be heightened in order to improve the slow pace of implementation in some fronts, ie (taxation, regional stock exchange, and common external tariff rates).

• From the social point of view, steady economic growth has done little to dent rampant poverty in the region. In Congo, 70 % of the population lives on less than $ 1 a day. In Cameroon and Chad, the percentages were 46 % and 64 % respectively. While 30% of the population of CEMAC suffer hunger and nutritional deficiencies.