Following the extraordinary summit of Heads of State in Yaoundé, many had hoped for bold initiatives aimed at strengthening the economy of the CEMAC zone. While the Bank of Central African States (BEAC) opted to maintain its current interest rates, the decision marks the beginning of a crucial discussion on how to take more targeted actions that address the specific needs of the region’s countries.

Recent data reveals promising trends for the CEMAC zone:

• Foreign exchange reserves, although slightly declining, remain robust. In 2024, they cover 4.4 months of imports—better than previous years.
• Inflation, which peaked in 2023, is expected to decrease to 4.4%. This suggests that with the right measures, price increases can be controlled.
• The region boasts a current account surplus and positive state budgets, both indicative of economic stability and resilience.

While these signs are not without their challenges, they offer a solid foundation for creating a more dynamic and inclusive monetary policy.

The BEAC now has an opportunity to leverage these strengths to fuel regional growth. A more focused and tailored monetary policy could directly address the zone’s challenges. Here are some potential steps that could help drive this transformation:

1. Supporting Agriculture to Reduce Food Dependency

The BEAC could provide low-interest loans for agricultural projects. This would encourage local food production, reduce the need for costly imports, and ease pressure on foreign exchange reserves. Moreover, by stabilizing food prices, such measures could help control inflation, which has been heavily influenced by rising food costs.

2. Promoting Affordable Housing

In collaboration with the Central African Banking Commission (COBAC), the BEAC could adjust mortgage lending rules to facilitate the construction of affordable housing. This would not only reduce the second-largest household expense but also stimulate industries such as construction and energy. Success in this area would require clear, actionable plans for housing development and infrastructure by member countries.

3. Investing in Rural Infrastructure

Special credit lines for infrastructure projects, such as road construction using labor-intensive methods, could significantly improve life in rural areas. Better roads would enable farmers to more efficiently sell their products and connect rural communities to the broader region. This initiative would also generate employment opportunities and promote inclusive economic growth.

For these ideas to succeed, BEAC’s monetary policies must be aligned with the budgetary strategies of member countries. Since each nation in the CEMAC zone faces distinct economic challenges, a flexible and region-specific approach is needed to deliver quicker and more sustainable results.

The region’s young and vibrant population represents a considerable source of potential. With a clear vision and the right interventions, CEMAC could turn its current challenges into growth opportunities.

In addition, COBAC’s recent regulatory change encouraging banks to diversify their investments—moving away from over-reliance on government loans—could open new avenues for asset managers and investors. This shift would also encourage governments to be more fiscally disciplined, improving overall economic stability.

The BEAC has the tools necessary to drive the region’s development. By adopting a more proactive monetary policy and introducing innovative initiatives, the bank could foster a more resilient economy that is better shielded from external shocks.

While the challenges are significant, they also present a unique opportunity for bold and creative solutions. As the economic backbone of the CEMAC zone, the BEAC is in a prime position to lead the transformation of the region. The potential for growth is vast, and with the right policies, the region can overcome its current hurdles and move toward a prosperous future. The time to act is now.

Culled from Business in Cameroon