« This is therefore the point to note that if the CEMAC countries do not fight effectively against the COVID-19 pandemic to limit its economic and financial consequences, the macroeconomic situation would become unsustainable. “Warned the Bank of Central African States (Beac), in its monetary policy report made public in March 2020. While the countries of the Economic and Monetary Community of Central Africa (Cemac) recorded the first positive cases at Covid-19, the Beac Monetary Policy Committee (Cpm) already saw gloomy prospects for their economies. 04 months later, we certainly haven’t reached the worst, but the effects of the Covid-19 remain to be deplored.
Meeting on June 24 by videoconference for its second meeting of the year, the Cpm of Beac assessed the economic activity of the six Cemac countries during the 1is semester 2020. It emerges that “the revival of productive activities has been slowed in the sub-region by the disruption of supply circuits for imported products as well as by the restrictive measures adopted by governments to contain the effects of the pandemic” can we read in a press release signed by Abbas Mahamat Tolli, President of the Cpm.
In the event of a large-scale crisis, the CMP feared, in March, a fall in the currency coverage rate to 52.7%, a current account deficit, including public transfers, to 10.3% of GDP and a sharp drop in reserve assets which would amount to 2.66 months of imports of goods and services. The institution had even resuscitated, without expressly saying so, the hypothesis of a devaluation of the currency. Today, notes the Cpm of Beac, the situation is far from being as alarming; and for good reason the external financings mobilized by the States made it possible to limit the breakages. “Foreign exchange reserves have increased and represented 5.7 months of export of goods and services while the external currency coverage rate is 78% at the end of May 2020 against 67% at the end of December 2019 . “
Also read: Coronavirus: Beac could lose 7 billion F in profit in 2020 because of the Covid-19
Dark prospects
If the situation seems to have been brought under control compared to what was planned, it is clear that the current pandemic, which is indeed continuing on its way, is not sparing the savings of Cemac. For 2020, the Cpm forecasts an economic recession of 5.9%, a slight rise in inflationary pressure to 2.5%, a deterioration in the budgetary balance to -6.2% of GDP, a significant widening of the deficit of the current account at 7.3% of GDP and a currency coverage rate which will return to 55%. Note that these forecasts largely depend on the evolution of the pandemic and the cost, on the international market, of a barrel of oil, the main export commodity of the 06 CEMAC countries.
Also read: Coronavirus: Beac suspends liquidity drawdowns
Ongoing support
During the first annual session of the Cpm of Beac held in April, the institution had taken measures to support the savings of Cemac. These include, for example, the downward revision of the interest rate on calls for tenders (TIAO) by 50 basis points, ie from 3.50% to 3.25%; the downward revision of 100 basis points in the marginal lending rate from 6.00% to 5.00%; the downward revision of the deposit facility rate to 0.00%. In view of the prospects, which are not very bright, Beac has decided to maintain this support. In addition, in its process of massive injection of liquidity, Beac adopted “the methods of implementing its decision taken in March 2020 to soften the conditions of eligibility of private and public collateral for refinancing operations of the Beac to facilitate bank financing of the economy, ”the press release said.
Also read: Coronavirus: severely infected Beac
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