Economic situation in the countries of the Central African Economic and Monetary Community (Gabon, Cameroon, Chad, the Central African Republic, the Republic of Congo and Equatorial Guinea) remains fragile despite pick-up in growth on fiscal consolidation, according to the International Monetary Fund (IMF).
In a staff report on the common policies in support of member countries reform programs released Tuesday, the IMF said while improving, CEMAC’s economic situation remains fragile despite growth picking up slightly.
“Growth picked up slightly but remains well below potential. Governments’ fiscal consolidation efforts, along with BEAC’s tighter monetary policy and stricter enforcement of foreign exchange regulations, have contributed to a significant reduction in the region’s fiscal and external imbalances,” the IMF staff report noted..
The region has been hit hard by a series of severe shocks: a sharp decline in oil prices, civil conflicts in some parts, refugees’ flows, and droughts, according to the Bretton Woods institution, adding that economic growth is at its lowest levels in 20 years with regional international reserves declining rapidly to cover only two months of imports.
All CEMAC countries are committed to macroeconomic policies agreed with IMF staff to support the economic recovery and financial sustainability of each country and of the region.
The international reserve accumulation of CEMAC however underperformed in early 2018 due to fiscal slippages in some countries, the report noted, adding that regional central bank and banking supervisor continue to implement policies in support of the IMF-supported programs with CEMAC members.
Looking ahead, a further improvement in the economic and financial situation is projected, assuming full implementation of policy commitments by CEMAC member states and regional institutions.
“This outlook remains subject to substantial risks from possible weaker program implementation, lower oil prices, and insufficient external financing,” the report stated.