(Business in Cameroon) - At the end of the recent annual discussions on CEMAC's common policies in support of member countries' reform programmes, the International Monetary Fund (IMF) was optimistic about the future of the subregion.
According to the institution, stricter enforcement of exchange regulations and the debt relief already granted to CEMAC countries should improve the subregion’s capital account balance. As a result, regional net external assets are expected to increase steadily over the medium term to reach the equivalent of five months of imports by 2022. As a reminder, currently, the subregion's foreign exchange reserves are estimated at just over three months of imports.
The Bretton Woods institution indicated that the strict application of foreign exchange regulations on private flows and the repatriation of banks' external assets, combined with continued external budget support and debt relief, have already led to a stronger than expected increase in external reserves in the CEMAC zone in H1, 2019. As a result, the net external assets target the region set for June 2019 has been exceeded by more than €800 million (about XAF524 billion).
“Further fiscal consolidation efforts, mainly based on expected enhancement in non-oil revenue collection, would reduce the regional non-oil budget deficit by an additional 1 percentage point of non-oil GDP in 2020, which would then continue to decline gradually thereafter. Overall, the public debt-to-GDP ratio is expected to decline further to 47 percent of GDP in 2020 and to less than 40 percent by 2023,” the IMF Board indicated.