COVID-19 Impact On CEMAC Countries’ Economies Not As As Predicted

The COVID-19 pandemic has not negatively impacted on the economies of the countries of the Central African Economic and Monetary Commission, popularly known by its French acronym, CEMAC, as  projected, according to the Bank of Central African States (BEAC).

The countries are Cameroon, Congo Brazzaville, Gabon, Chad, the Central African Republic and Equatorial Guinea.

The Monetary Policy Committee (MPC) of BEAC, during the 3rd trimester of 2020, stated that economic activities within the sub-region were marked by a resumption of normalcy in virtually all sectors, except the hotels, transport and recreational sectors which still faced restrictions.

Meeting by video conference on September 30, 2020, the MPC noted that the resumption of economic normalcy was partly due to the pick-up in petroleum prices.

“Although ahead in recession in 2020, the countries of the sub-region suffered less than anticipated from the consequences of the COVID-19 pandemic”, a communiqué of the MPC issued after the meeting revealed.

As a consequence of this resilience, instead of the 5.9 per cent drop in the Gross Domestic Product (GDP) of the sub-region as earlier predicted in June, the drop would eventually be around 3.per cent  for 2020, thus remaining negative all the same.

The inflation rate earlier envisaged to spike by 2.5 per cent would be 2.6 per cent  for the whole year, the committee stated.

At the same time, the degradation in budget and external deficits in the sub-region would also be less than earlier predicted as the drop in these macro-economic indicators would be situated around 2.6 per cent and 4.7 per cent of GDP respectively instead of the 4.5 per cent and 7.3 per cent predicted in June, it added.

“Foreign exchange reserves on their part would thus increase above the threshold of three months’ importation of goods and services,” the committee stated.

“In any case, in spite of these relatively encouraging perspectives, the consolidation of the external position of BEAC would still be fragile in 2020 in view of the big uncertainties surrounding the economic previsions of the sub- region.

“Under these conditions, and in order to limit the nefarious effects of the COVID-19 crisis on the economies of the sub-region, the Central Bank would maintain its adjustment orientation in its monetary policy,” the BEAC stated.