(Business in Cameroon) - On July 3, the Bank of Central African States’ (Beac) board of directors authorised the opening of escrow accounts labelled in foreign currencies for CEMAC oil and mining operators (Cameroon, Central African Republic, Chad, Equatorial Guinea, and Gabon) that would request it.
The Central Bank explains that the opening of the said account falls within the framework of the implementation of some provisions of Regulation No 02/18/ECMAC/Umac in force within the CEMAC region. Article 43 of this regulation prohibits the opening of currency accounts for CEMAC residents but states that the central bank can authorize resident legal entities to open such account under the terms and conditions laid down by the BEAC.
After the first two references, notably on September 1 and December 10, 2019, the foreign exchange regulations, which officially came into force in March 2019, will be applicable to oil and mining companies operating in CEMAC starting from 31 December 2020. Therefore, this special authorisation from the Beac is certainly intended to facilitate its application for these companies. The application of the foreign exchange regulation is necessary to centralize all the currencies resulting from all CEMAC's transactions with the outside world and to gain a better understanding of the activities of exporting companies, particularly those in the oil and mining sectors.
Recently, the International Monetary Fund (IMF) asked CEMAC States to amend their oil and mining codes to adapt them to foreign exchange regulations. Indeed, “almost all oil and mining companies in CEMAC have agreements with states that exempt them from the obligation to repatriate their foreign exchange earnings,” the IMF noted last year. One of the consequences of those agreements is that the sub-region is deprived of important foreign exchange resources weakening its currency.
Meanwhile, in November 2019, the Beac launched the recruitment of a firm that would help it set up an appropriate mechanism thanks to which the exports earnings repatriated by oil and mining companies would be monitored. The firm will also have to propose a mechanism explaining all the existing financial arrangements at all phases of the processes put in place by the mining and oil companies.