(Business in Cameroon) - At the end of the 3rd session of the BEAC Monetary Policy Committee (MPC) for the year 2018, held on 31 October 2018 in the Cameroonian capital, the Governor of the Bank of Central African States (Beac), Chadian Abbas Mahamat Tolli (photo), once again denied rumors on a possible devaluation of the CFA franc.
After revealing that the issue was not discussed at the last CEMAC Heads of State Summit in Ndjamena, “merely simply because it was not on the agenda”, the official indicated that “given the current economic fundamentals, there is no reason why CEMAC risks devaluation.
As proof, Abbas Mahamat Tolli explained, as he already did in 2017, amid rumors about a probable devaluation of the CFA franc, there is no comparison between the current economic situation in the CEMAC zone and that prevailing in 1994, the year of the last currency devaluation.
First, he said, CEMAC countries' foreign exchange reserves currently have a coverage rate of about 60%, compared to only 13% in 1994. Then, during 1994, the CEMAC zone was in recession, with a growth rate of -1%, while the projections for 2018 are 1.7%, and just over 3% for 2019.
In addition, Mr. Tolli stressed, the issue of monetary adjustment in the franc zone was removed at the summit of CEMAC heads of state in Yaoundé in December 2016, thanks to the joint decision of the countries to enter into a program with the International Monetary Fund (IMF); program already concluded by four countries (Cameroon, Gabon, Chad and CAR), and currently being concluded with one of the last two countries still lagging behind.
Thanks to this program and the monetary and fiscal policy adjustment measures taken by the BEAC and the States respectively, significant positive effects have been observed on the economies of the CEMAC zone; thus contributing to further narrowing the spectre of a devaluation of the CFA franc.
Brice R. Mbodiam