By DOH JAMES SONKEY IN YAOUNDE
Six Heads of State of the Central African sub-region; Host President, H.E Paul Biya of Cameroon, H.E. Faustin-Archange Touadera of the Central African Republic (CAR), H.E. Idriss Deby Itno of Chad, H.E. Teodoro Obiang Nguema Mbasogo of Equatorial Guinea, H.E. Denis Sassou Nguesso of Congo and H.E. Ali Bongo Ondimba of Gabon meeting in Yaoundé last December 23 in an Extraordinary Summit of the Central African Economic and Monetary Community, CEMAC resolved to adjust their economies in order to elude the Franc CFA currency from suffering another devaluation.
In his opening remarks, President Paul Biya after decrying that “The prices of our commodities, including oil, have fallen sharply. Coupled with other exogenous shocks (terrorism, numerous forms of insecurity), the crisis has contributed significantly to weakening our economies. Their growth has slowed down, inflation has increased and our foreign exchange reserves have dropped considerably” concluded that “If this situation were to persist, it could undermine the foundations of our sub-region and our Economic and Monetary Community.”
In his closing speech, Cameroon President, Paul Biya gave some opening on how the solution can come “The collective strategy that needs to be implemented should address a number of key issues: At the fiscal level, in order to maintain a sustainable balance, it would be necessary to broaden the tax base to increase revenue and improve the quality of spending. At the same time, it would be necessary to ensure that these adjustment measures do not impede growth and do not worsen the living conditions of the most vulnerable segments of the population. With regard to public debt, measures should be taken to ensure its sustainability. In the same vein, it would be necessary for our bilateral and multilateral partners to be more flexible, owing to the sharp fall in commodity prices. As far as our monetary policy is concerned, our Central Bank has provided support to cushion fiscal shocks. However, other levers should be used to preserve our monetary stability which is threatened by balance-of-payments problems. Support from the IMF would certainly be indispensable, in cooperation with France, our partner in the monetary field.”
During a closed door working session of the Yaoundé Extraordinary CEMAC Summit equally attended by the economic and finance ministers of the sub-region, the Managing Director of the IMF, Christine Lagarde, the French Minister for the Economy and Finance, Michel Sapin, the President of the CEMAC Commission, Pierre Moussa and the Governor of BEAC, Lucas Abaga Nchama, the ministers presented a report of a meeting held the previous day in Yaounde, while Christine Lagarde and Michel Sapin outlined pathways to rapidly adjust the CEMAC economies with international partners.
Threats of another devaluation of the Franc CFA is coming at the backdrop of calls from several economic analysts in the sub region demanding CEMAC countries to drop the currency hitherto accused of retarding the economic emancipation of member countries.