On June 10, 2019, the Bank of Central African States (BEAC) published a document that identifies the conditions for using the CEMAC’s electronic payment methods outside the region.
“The use of electronic payment methods outside CEMAC is limited to current transactions that are within the currency allocation threshold prescribed by exchange control legislation,” the document signed by the bank’s governor Abbas Mahamat Tolli (photo) indicates.
Physical Payment or withdrawals using systems outside the CEMAC are capped at XAF5 million per user for every trip. Above this level, the traveller will have to justify the reason such an amount is being requested.
Issuing banks, commercial notably, are called to ensure compliance with these new rules.
Internal sources reveal that the new measures are aimed at fighting money laundering, terrorism and informal trade that led to an erosion of about 50% of SubSaharan countries’ GDP. It is also worth noting that the rules are published in a context marked by a shortage of currencies in the sub-region; a situation regularly reported by employer organizations.
The launch of CEMAC zone’s unified exchange is planned for July 2019. This was announced by Nagoum Yamassoum, president of the COSUMAF, Central African financial markets’ supervisory comitee, on June 13, 2019, in N’Djamena (Chad).
During a workshop to sensitize players of the N’Djamena exchange on the regional exchange, Nagoum Yamassoum indicated that the extraodinary general meetings of Gabonese exchange Bourse des valeurs mobilières de l’Afrique centrale (Bvmac) and Cameroon’s Douala Stock Exchange (DSX) would be held on July 1, 2019 to validate the unification agreement. He also revealed that the proposed date for the effective launch of this unified exchange is July 5, 2019, in Douala.
According to Nagoum Yamassoum, in H2, 2019, various institutions of this exchange will be restructured to provide them with the necessary operational capabilities for the effective take-off of this regional market.
Let’s note that the unification of CEMAC’s financial markets was approved by the conference of the region’s Heads of States during its extraordinary meeting of October 31, 2017. The conference decided that the regulator COSUMAF would be based in Libreville (Gabon) while the exchange would be located in Douala (Cameroon). Temporarily, the Bank of Central African States BEAC is to be the central custodian.
The Bank of Central African States (BEAC) recently published a report on the changes in the prices of commodities exported by CEMAC countries in Q1, 2019.
According to the bank, the global index of those commodities fell by 6.2% quarter to quarter due to a decrease in the prices of energy products, natural gas namely, despite a slight improvement in the prices of non-energy products.
During the quarter under review, the index of energy products’ prices fell by 8.2% quarter to quarter. This is mainly due to the drop in the demand for natural gas as Japan restarted its nuclear plants. In addition, LNG exports in the USA, Australia and Qatar rose during the period under review.
As far as oil prices are concerned, they recorded a steady rise during the period under review to reach $64 at end March 2019. These rises are the result of sharp production cuts by OPEC countries and their partners (following a December 2018 decision to tighten production cuts agreements in order to push prices up).
The agriculture products recorded a slight improvement in their prices in Q1, 2019, after the decline in 2018. This is due to the easing of US-China trade tensions and a poor outlook on agriculture production in the US. The most important rise was recorded in the rubber market (+17.9%) because of rising demands from India and China.
The index of forest products also improved from 82% to 83%. The rise was noticeable in the market for veneer (1.2 %) and logs (0.5 %).
Based on the World Bank group’s forecasts, the BEAC indicates that oil prices will remain stable (around $66 per barrel). It adds that metals and agriculture products’ prices should rise further because of improvements in the price of gold.
A Beac report on the evolution of lending rates within the Cemac region showed that big companies received 63.5% of banking credit granted in H2 2018. This means SMEs and Individuals only captured 36.5% of funds.
In detail, Small- and Mid-size Enterprises which however represent most of the region’s industrial fabric only received 18.8% of financing over the period reviewed. “Individuals absorbed only 8.47% of total amounts receiving XAF406.4 billion. This figure which remains weak is however higher than the XAF239.16 billion (5.31% of new credits) individuals received during the first half 2018,” Beac says.
Credits granted in H2 2018 within the Cemac area grew to nearly XAF4,797 billion, up XAF297 billion (+6.59%) from the first half, a Beac report says.
According to the document, Cameroon and Gabon were top providers granting about 87% of the total amount. XAF2,887 billion, or 60% of monies, was from the first country while the second granted 27% or XAF1,302 billion. Congo and Chad accounted for 7% and 3%, respectively, followed by E. Guinea (2%) and CAR (1%). Most of the funds (99.33%) were provided by banks ; this represents XAF4,465 billion. The 7 non-bank financial institutions identified in the region accounted only for 0.67% (XAF32 billion) of total credit granted over the period reviewed.
Beac indicated that the uptick in the H2 2018 was linked to seasonal increase in demand for credits due to year-end holidays and school loans. Yet, the Central Bank says whole-year credit activity was down 6.07% compared to 2017. Total 2018 credit amounted to XAF9,297 billion against XAF9,897 billion the previous year.
Cameroonian finance minister, Louis Paul Motaze, chaired April 19 in Malabo (E Guinea) the Board Meeting of the Development Bank of Central African States (Bdeac) which fetched his country XAF6.6 billion for development projects.
Part of the monies, XAF4.17 billion, will be used to build a 4-star hotel in Douala, Cameroon’s economic capital, while the remaining XAF2.5 billion will fund the expansion of Du Vaal school.
The bank also approved XAF80 billion for the construction of a new passenger terminal at the international airport of Bata, in Equatorial Guinea. Another XAF2.5 billion will finance the creation of an agro-pastoral facility while XAF1.100 billion will serve for the construction of a cement unit in the same city.
In Gabon, Bdeac gives XAF45 billion for the construction of 1,000 housing in Okolassi; a project initiated by the national social security fund. The Congolese state received XAF12 billion to strengthen the University Hospital Centre of Brazzaville and another XAF6 billion to partly fund the implementation of a pharmaceutical products’ manufacturing and packaging unit in Ollombo.
The Development Bank of Central African States (Bdeac) achieved bullish performances in 2018 compared to the previous year with earnings up XAF8.7 billion from XAF2.3 billion to more than XAF11 billion.
The bank says figures “increased fivefold, translating good performances of the bank’s portfolio and transactions in 2018 as well as good control of operating costs.” Over the period reviewed, key management indicators were very dynamic and the bank's operating margin reached XAF19.401 billion against XAF14.103 billion in 2017, up 24%. Operating result also more than doubled between the two periods from XAF3.082 billion to XAF8.469 billion.
The primary market for government securities issued through bidding in the Cemac zone has been dynamic over the past year. According to the Bank of Central African States Beac, volume of issues increased significantly to XAF1,648.8 billion in 2018 from XAF878.7 billion in 2017, up by about 87.6%.
A total of 156 tenders were registered including XAF1,538.1 billion in Treasury bills (BTAs) and only XAF110.7 billion in fungible treasury bonds (OTAs).
With a volume of XAF629 billion in issues, Gabon was the largest borrower on the market (BTA segment) in 2018, followed by Chad with XAF416.6 billion. Cameroon came third with XAF287 billion. Other players include Equatorial Guinea (XAF114 billion), Congo (XAF72.5 billion) and the Central African Republic (XAF19 billion).
On the fungible treasury bonds (OTAs) side, only Gabon raised funds (XAF110.7 billion) through 10 issues.
Beac’s gold reserves at the end of 2018 stood at 201.865 oz as in 2017 but value increased from XAF142.9 billion to XAF147.8 billion between the two periods, an improvement by XAF4.9 billion.
According to the bank, the rise in reserve value followed an increase by 4% in world gold prices. Prices were €1,117 per oz in 2018, up €43 compared to the €1,074 in 2017.
The outstanding debt of the six CEMAC member states on the Bank of Central African States (BEAC) securities market as at 30 June 2018 was XAF1,020 billion, according to the Supervisory Board of the Central Bank's securities settlement and custody unit (CRCT).
Of this amount, XAF766.3 billion was made available by only ten credit institutions, which represents more than 75% of the total financing received by the countries during the period under review.
Top fund providers include four banks in Cameroon (including Afriland First Bank, the leader in this market), which granted XAF 352 billion, representing about 30% of the aggregate amount.
Chadian banks provided XAF232.7 billion, compared with XAF115.8 billion for Gabonese banks and XAF65.8 billion for Banco nacional de Guinea ecuatorial.
Brice R. Mbodiam