{
  "title": "IMF Executive Board Concludes Annual Discussions on CEMAC Countries’ Common Policies",
  "publication": "IMF News, July 26, 2016",
  "sourceUrl": "https://www.imf.org/en/news/articles/2016/07/26/14/16/pr16361-imf-executive-board-concludes-annual-discussions-on-cemac-countries-common-policies",
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  "summary": "Executive Board concluded annual discussions on Common Policies and Challenges of Member Countries with the Central African Economic and Monetary Community (CEMAC) on July 13, 2016.",
  "publishDate": "2016-07-26",
  "sections": [
    {
      "heading": "Overview",
      "content": "- Executive Board concluded annual discussions on Common Policies and Challenges of Member Countries with the Central African Economic and Monetary Community (CEMAC) on July 13, 2016.\n- Press Release date: July 26, 2016.\n- Context: discussions form part of Article IV consultations with members in the currency union framework."
    },
    {
      "heading": "Economic performance and projections",
      "content": "- 2015 growth slowed to 1.6 percent, from 4.9 percent in 2014, due to reduced public investment and lower oil production.\n- Growth projected at 1.9 percent in 2016 as oil production and investment remain sluggish.\n- From 2017 onward, growth expected to reach 3½ percent a year, as oil prices gradually recover, about one percentage point below the average growth level of the past decade of high oil prices.\n- Oil GDP annual changes: -0.3 (2012), -8.0 (2013), 3.0 (2014), -0.4 (2015), -1.5 (2016), 0.2 (2017).\n- Non-oil GDP annual changes: 5.9 (2012), 4.6 (2013), 5.0 (2014), 2.6 (2015), 2.7 (2016), 4.1 (2017).\n- Consumer prices (period average) reported as: 3.9 (2012), 2.3 (2013), 2.0 (2014). Consumer prices (end of period) shown as: 3.2 (2012), 2.4 (2013)."
    },
    {
      "heading": "Fiscal and external balances",
      "content": "- Regional fiscal and current account deficits grew to 6 and 9 percent of GDP in 2015, respectively, as oil export proceeds fell by 32 percent.\n- Continued low oil prices and high public expenditure expected to maintain deficits at about 6 and 8 percent of GDP in 2016, respectively.\n- Gradual recovery in oil prices and expected moderate fiscal consolidation should narrow regional fiscal and current account deficits to 3 percent by 2021.\n- Government financial operations (percent of GDP):\n  - Total revenue, excluding grants: 27.6 (2012), 26.8 (2013), 25.0 (2014), 19.0 (2015), 18.8 (2016).\n  - Government expenditure: 29.2 (2012), 30.3 (2013), 29.6 (2014), 26.6 (2015), 25.9 (2016), 23.8 (2017).\n  - Primary fiscal basic balance2: -0.6 (2012), -1.6 (2013), -2.5 (2014), -4.4 (2015), -2.9 (2016), -1.2 (2017).\n  - Basic fiscal balance3: -1.3 (2012), -3.1 (2013), -5.2 (2014), -4.1 (2015), -2.4 (2016).\n  - Overall fiscal balance, excluding grants: -3.5 (2012), -4.6 (2013), -6.4 (2014), -6.8 (2015), -5.0 (2016).\n  - Non-oil overall fiscal balance, excluding grants4: -31.0 (2012), -29.1 (2013), -25.9 (2014), -18.0 (2015), -15.9 (2016), -13.6 (2017).\n  - Non-oil primary fiscal balance, including grants4: -28.9 (2012), -27.3 (2013), -24.0 (2014), -16.3 (2015), -13.4 (2016), -11.2 (2017).\n- External sector indicators:\n  - Exports of goods and nonfactor services (% of GDP): 57.0 (2012), 53.7 (2013), 50.8 (2014), 41.5 (2015), 36.3 (2016), 37.0 (2017).\n  - Imports of goods and nonfactor services (% of GDP): 42.4 (2012), 41.0 (2013), 43.0 (2014), 42.3 (2015), 36.9 (2016), 34.8 (2017).\n  - Balance on goods and nonfactor services (% of GDP): 14.6 (2012), 12.7 (2013), -0.8 (2014), 2.2 (2015).\n  - Current account, including grants (% of GDP): 2.9 (2012), -9.4 (2013), -7.7 (2014).\n  - External public debt (% of GDP): 13.1 (2012), 15.5 (2013), 18.5 (2014), 23.4 (2015), 25.6 (2016), 25.8 (2017).\n  - Gross official reserves (end of period, Millions of U.S. dollars): 17,531 (2012), 18,222 (2013), 15,309 (2014), 10,139 (2015), 7,866 (2016), 7,634 (2017).\n  - Months of imports of goods and services (less intra-regional imports): 5.7 (2012), 5.6 (2013), 6.1 (2014), 3.4 (2015).\n  - Reserves as percent of broad money: 88.7 (2012), 83.7 (2013), 64.3 (2014), 52.0 (2015), 38.5 (2016), 34.5 (2017).\n- Memorandum items:\n  - Nominal GDP (billions of CFA francs): 45,877 (2012), 45,572 (2013), 46,702 (2014), 43,369 (2015), 43,423 (2016), 47,019 (2017).\n  - CFA francs per U.S. dollar, average: 511 (2012), 494 (2013), 591 (2014).\n  - Oil prices (US dollars per barrel): 105.0 (2012), 104 (2013), 96 (2014), 51 (2015), 44 (2016)."
    },
    {
      "heading": "Monetary and financial sector",
      "content": "- Growth of money and credit to the economy turned negative in 2015 for the first time in a decade, contributing to keeping inflation low.\n- Monetary financing has been the primary response tool to the oil-price shock.\n- Directors urged authorities to:\n  - Freeze statutory advances to national governments and avoid indirect monetary financing.\n  - Accelerate reforms to the monetary policy framework to improve effectiveness, including greater central bank independence.\n  - Rebuild low level of reserves as an urgent priority and improve pooling of reserves across members.\n  - Implement remaining safeguards assessment recommendations.\n- Financial sector resilience noted; Directors encouraged development of a sound macroprudential framework.\n- Progress welcomed following 2015 FSAP recommendations; implementation of remaining recommendations and measures to broaden financial inclusion and strengthen the AML/CFT framework were urged."
    },
    {
      "heading": "Policy recommendations and priorities",
      "content": "- Fiscal:\n  - Pursue timely and decisive fiscal adjustment to ensure debt and external sustainability.\n  - Rebuild foreign reserves buffers.\n  - Expand the non-oil tax base and rationalize and improve the quality of spending to maximize economic returns and social protection.\n  - Pursue prudent borrowing and debt management policies; borrow on concessional terms to the extent possible.\n  - Strengthen fiscal policy coordination among members and enforce fiscal discipline.\n  - Consider a lower debt ceiling and stronger monitoring mechanisms under the new regional convergence framework.\n- Structural and real-economy reforms:\n  - Implement region-wide structural reforms to diversify the economy and improve investment prospects.\n  - Focus on improving the business climate and boosting private investment.\n  - Strengthen regional institutions to enhance collaboration, regional integration, policy coherence, and compliance.\n- Monetary and financial:\n  - Exercise prudence in further monetary policy easing given limited scope.\n  - Develop macroprudential framework to safeguard financial stability.\n  - Implement remaining FSAP recommendations and strengthen AML/CFT framework.\n- External support:\n  - Directors called for enhanced support from the Fund and other international partners to help authorities address current economic difficulties."
    },
    {
      "heading": "Risks and medium-term challenges",
      "content": "- Key risks identified:\n  - Weaker-than-expected oil price recovery.\n  - Relapse in security conditions in the Lake Chad region undermining macroeconomic stability and private investment.\n  - Lower growth in China dampening commodity prices—especially oil—lowering demand, and reducing financing.\n- Medium-term prospects described as challenging; stronger regional institutions necessary for promoting regional integration and supporting regional economic growth."
    },
    {
      "heading": "Executive Board assessment",
      "content": "- Directors expressed concern about deteriorating economic prospects from multiple shocks: oil price decline, challenging security environment, and insufficient policy response.\n- Strong encouragement to authorities to:\n  - Take timely and decisive actions on fiscal adjustment, debt and external sustainability, reserve rebuilding, and structural reforms.\n  - Strengthen regional institutions for better policy coherence and compliance.\n- Views to form part of Article IV consultation discussions on individual CEMAC members until the next Board discussion of CEMAC common policies.\n\nIMF Press Release No. 16/361, IMF Communications Department\n\n---\n\n\n References\n\n- PRESS CENTER\n- http://www.imf.org/external/np/sec/misc/qualifiers.htm\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2016/07/26/14/16/pr16361-imf-executive-board-concludes-annual-discussions-on-cemac-countries-common-policies"
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    "Published: July 26, 2016",
    "Executive Board concluded annual discussions on Common Policies and Challenges of Member Countries with the Central African Economic and Monetary Community (CEMAC) on July 13, 2016.",
    "Press Release date: July 26, 2016.",
    "Context: discussions form part of Article IV consultations with members in the currency union framework.",
    "2015 growth slowed to 1.6 percent, from 4.9 percent in 2014, due to reduced public investment and lower oil production.",
    "Growth projected at 1.9 percent in 2016 as oil production and investment remain sluggish.",
    "From 2017 onward, growth expected to reach 3½ percent a year, as oil prices gradually recover, about one percentage point below the average growth level of the past decade of high oil prices.",
    "Oil GDP annual changes: -0.3 (2012), -8.0 (2013), 3.0 (2014), -0.4 (2015), -1.5 (2016), 0.2 (2017).",
    "Non-oil GDP annual changes: 5.9 (2012), 4.6 (2013), 5.0 (2014), 2.6 (2015), 2.7 (2016), 4.1 (2017).",
    "Consumer prices (period average) reported as: 3.9 (2012), 2.3 (2013), 2.0 (2014). Consumer prices (end of period) shown as: 3.2 (2012), 2.4 (2013).",
    "Regional fiscal and current account deficits grew to 6 and 9 percent of GDP in 2015, respectively, as oil export proceeds fell by 32 percent.",
    "Continued low oil prices and high public expenditure expected to maintain deficits at about 6 and 8 percent of GDP in 2016, respectively.",
    "Gradual recovery in oil prices and expected moderate fiscal consolidation should narrow regional fiscal and current account deficits to 3 percent by 2021.",
    "Government financial operations (percent of GDP):",
    "External sector indicators:",
    "Memorandum items:",
    "Growth of money and credit to the economy turned negative in 2015 for the first time in a decade, contributing to keeping inflation low.",
    "Monetary financing has been the primary response tool to the oil-price shock.",
    "Directors urged authorities to:",
    "Financial sector resilience noted; Directors encouraged development of a sound macroprudential framework.",
    "Progress welcomed following 2015 FSAP recommendations; implementation of remaining recommendations and measures to broaden financial inclusion and strengthen the AML/CFT framework were urged.",
    "Fiscal:",
    "Structural and real-economy reforms:",
    "Monetary and financial:",
    "External support:",
    "Key risks identified:",
    "Medium-term prospects described as challenging; stronger regional institutions necessary for promoting regional integration and supporting regional economic growth.",
    "Directors expressed concern about deteriorating economic prospects from multiple shocks: oil price decline, challenging security environment, and insufficient policy response.",
    "Strong encouragement to authorities to:",
    "Views to form part of Article IV consultation discussions on individual CEMAC members until the next Board discussion of CEMAC common policies.",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[http://www.imf.org/external/np/sec/misc/qualifiers.htm](http://www.imf.org/external/np/sec/misc/qualifiers.htm)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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