CEMAC seeks to reform macroeconomic tools

Experts are meeting in Yaounde to see how the budgetary policy can be in coherence with the needs of the bloc’s monetary policy.

The six countries (Cameroon, Chad, Central African Republic, Equatorial Guinea, Gabon and the Republic of Congo) of the Economic and Monetary Community of Central Africa, CEMAC, are rethinking the scope of the multilateral surveillance, put in place some 15 years ago to ensure that risks from capital flows are adequately addressed. Experts from the six member States alongside technical partners started meeting yesterday July 21, 2015 in Yaounde, under the chair of Cameroon’s Minister for Finance, Alamine Ousmane Mey.

In the year 2000, the summit of Heads of State in N’Djamena Chad endorsed the multilateral surveillance document with focus on harmonising economic and budgetary policies. Fifteen years down the lane, experts say the context has changed. When the document was approved prior to the Highly Indebted Poor Countries HIPC Initiative, the criterion for public debt rate was less than 70 per cent of Gross Domestic Product. When the HIPC came in, the first outcome was the cancellation of debts.

The 70 per cent allowance allowed for public debts is no longer constraining. In addition, the level of dependence on oil revenue for economies today is far from what held when the mechanism was put in place.

The level of reliance on oil revenue has improved. Fluctuations on the international market with the current fall in oil prices are among reasons that have pushed CEMAC countries to reform the 15-year-old instrument.

From the Minister for Finance, Alamine Ousmane Mey, to the President of the CEMAC Commission, Pierre Moussa and the Commissioner of CEMAC, Paul Tasong, countries of CEMAC have a common monetary policy and it beholds the institutions of the community to ensure coherence and stability.

They cautioned the fact that CEMAC countries have a common currency and there is need to ensure that it is sustained over time. The need to ensure that the region’s budgetary policy is in coherence with the wishes of monetary policy is therefore indispensable. Having mastery on inflation and readjusting macroeconomic tools are prerequisites for a better business climate for investors.

The Yaounde confab is not in any way coming to solve problems which according to CEMAC officials do not exist. “We don’t look for solutions only to problems we see but we could also anticipate problems,” notes Paul Tasong. Notwithstanding, Pierre Moussa put stress on the fact that the context has changed.

The rise in insecurity in the Central African Republic, host to the CEMAC head office as well as the resurgence of Boko Haram terrorist attacks in Cameroon’s Far North coupled with the financial constraints faced by oil producing countries of the economic bloc is impacting on investment programmes.

This therefore calls for need to reform the region’s multilateral surveillance policy. The Yaounde high-level meeting which is holding on the theme, “Multilateral Surveillance in CEMAC: Experiences and Perspectives” ends on July 23, 2015.