Central African Economic and Monetary Community: Staff Report on the Common Policies of Member Countries, and Common Policies in Support of Member Countries Reform Programs-Press Release; Staff Report; and Statement by the Executive Director

IMF Staff Country Reports, January 6, 2023

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Canonical URL: Central African Economic and Monetary Community: Staff Report on the Common Policies of Member Countries, and Common Policies in Support of Member Countries Reform Programs-Press Release; Staff Report; and Statement by the Executive Director

The paper presents Central African Economic and Monetary Community’s (CEMAC) IMF Staff report on Common Policies of Member Countries and Common Policies in Support of Member Countries Reform Programs.
A positive terms-of-trade shock amidst the fallout from Russia’s war in Ukraine has broadly benefited CEMAC, reinforcing its external position and gradual post-pandemic recovery.
Regional authorities tightened monetary policy and normalized prudential regulation in 2022, while continuing to advance the reform agenda.
Global inflation pressures have passed through to domestic prices, putting pressure on real incomes.
Rebuilding buffers and sustaining a recovery that protects the most vulnerable will require stricter adherence to budget and reform plans consistent with IMF-supported programs and policy advice; this will ensure that part of the oil windfall is saved.
Implementation of these policies in current favorable conditions is critical to strengthening resilience in the face of rising risks, including most notably to food security, debt vulnerabilities, and tightening of global financial conditions.
A prudent management of the oil windfall and faster progress on deep structural and governance reforms are pivotal for laying the foundations for a more diversified, inclusive, and sustainable growth.

Positive terms-of-trade shock supported external position and recovery.
Monetary stance: tightened monetary policy in 2022; normalization of prudential regulation.
Prices and incomes: global inflation pressures transmitted to domestic prices, reducing real incomes.
Reform momentum: continuation of the reform agenda across the region.

Food security risks highlighted as a notable vulnerability.
Debt vulnerabilities identified as a material risk amid changing global conditions.
Exposure to tightening of global financial conditions could undermine resilience if buffers are not rebuilt.
Fragility around managing oil-related revenue windfalls could impede diversification and inclusiveness unless saved prudently.

Stricter adherence to budget and reform plans consistent with IMF-supported programs and policy advice.
Ensure that part of the oil windfall is saved to rebuild buffers.
Implement recommended policies while conditions are favorable to strengthen resilience against identified risks.
Accelerate deep structural and governance reforms to support diversification, inclusion, and sustainability of growth.