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The oil windfall continues to support growth in the CEMAC region, significantly reducing the fall in export revenue of other commodities affected by the decrease of global demand.

By Amadou Fall, Dakar

The oil, which contributes with 45% to the formation of gross domestic product of the Economic and Monetary Community of Central Africa (CEMAC), remain the pillar of support for economic growth. Their production has indeed declined by 1.2%, from 52.2 million tons in 2007 to 51.6 million tons in 2008. But this decline is less pronounced than that of -4.4% between 2006 and 2007. And it was largely offset by an increase of 24.4% in average prices for export of petroleum products.

Relying on very solid revenue increased due to oil prices, real GDP growth in CEMAC has stabilized at 4% as compared to 4.6% in 2007, as indicated in the report of the Bank of France from 2008 related to the franc zone. Non-oil sector are contributing no doubt, to many, to the relative mitigation of the fall of regional GDP, contributing to it by 3.9 points. But the contribution of oil sector is even more substantial: 4.1 points.

National GDP growth rate is also higher in Equatorial Guinea (16.8%), in Congo (5.2%) and Cameroon (3.5%), where the volumes of oil extracted increased or remained stable. This rate is low in Gabon (1.9%), where oil production has declined, and negative in Chad (-0.8%), where, in addition, the economy is bathed in an "unstable security environment", as outlined in a report from the Bank of France. The growth rate of the Central African Republic, which is rather a net importer of petroleum products, has regressed significantly, going from 3.6% in 2007 to 2% in 2008.

Investments
The 2.2 points of growth recorded by the secondary sector in CEMAC in 2008, achieving substantially the same as in 2007, also reflect the importance of investment programs implemented by businesses to expand their production, mainly in the oil sector. The contribution of construction amounted to 0.6 points in connection with the alteration and rehabilitation of road and rail networks. In the tertiary sector, the good performance recorded by the commercial, transport and telecommunications have helped to sustain growth up to 1.9 points. This sector has particularly benefited from strong domestic demand, as illustrated by the boom of mobile telephony.

In contrast, the contribution of export crops growth remained modest in 2008, reflecting a further decline in cotton crops (-3.8% -15.4% after 2007) and a decline in coffee production (-11.1%), slightly offset by the increased production of cocoa (+1.8%) reported always in the report of the Bank of France. It will also note a decrease in production of logs and timber (-11.6%), and non-oil mining, for the same cause: the decline in world demand for most commodities.

Decreased revenue
In the benefit of CEMAC, the fall in export earnings from these commodities has been largely offset by increased exports of manganese (134%), in addition to those of oil. It is clear, the trade balance in 2008, shows a surplus of 23.6%.

Oil revenues represent 85.8% of total exports of CEMAC valued at 19 2003.2 billion FCFA in 2008, compared with 15 643.4 billion FCFA in 2007.

This windfall has helped to maintain the investment rate in the CEMAC to a satisfactory level (28.8% of GDP in 2008 compared to 29.5% in 2007), "largely due to buoyant private investment, particularly in petroleum sector (exploration investments and development), food and telecommunications, in the opinion of the rapporteurs of the Bank of France. Thanks to oil, which generates 74% of resources feeding the national budgets, public finances have also improved, with an increase of 33.1% of total revenues excluding grants and a budget surplus to 11.5% of GDP, compared to 8.2% in 2007. Overall, the states have used this money to clear their outstanding external debt (1501 billion FCFA) and internal (2383 billion FCFA), increase wages and salaries (16.6%), investing in infrastructure and mitigate the impact of soaring food prices on households, the index of consumer prices is showed up by 5.9% over the year 2008, compared with 1.8% in 2007.