The Economic and Monetary Community of Central Africa (CEMAC) experienced an economic slowdown in 2023, with growth falling to 1.7% from 3.1% in 2022, according to the semi-annual CEMAC Economic Barometer published by the World Bank on Monday, June 17, 2024. Growth is expected to rebound to 2.5% in 2024.

The report revealed that CEMAC’s economic performance lagged behind the West African Economic and Monetary Union (WAEMU) and Sub-Saharan Africa, which recorded growth rates of 3.4% and 2.9%, respectively.

The slowdown in CEMAC was mainly due to a recession in Equatorial Guinea, where growth plummeted to -5.8% in 2023. This decline was caused by reduced hydrocarbon production and domestic demand. Additionally, Gabon’s growth decreased from 3% in 2022 to 2.3% in 2023.

Conversely, Cameroon posted the fastest growth in the region, averaging 3.4% between 2021 and 2023, thanks to a diversified economy and less reliance on hydrocarbons.

Chad demonstrated resilience despite the ongoing conflict in neighboring Sudan. Its GDP growth rate reached 4.1% in 2023, driven by increased oil production and public investments.

The Central African Republic and Congo faced significant fiscal pressures, with high deficits and debt-to-GDP ratios.

The World Bank also highlighted a rise in public debt in the region, reaching 52.8% of GDP in 2023. Public spending increased to 20.1% of GDP from 18.3% in 2022, reducing the budget surplus to 1.1% of GDP.

Inflation decreased in 2023 due to strict monetary policies by the Bank of Central African States (BEAC), but it remained above the regional target. “To support the exchange rate arrangement and contain inflationary pressures, the BEAC policy rate was maintained at five percent since March 2023 following a cumulative increase by 175 basis points from November 2021 to March 2023,” the report stated.

The World Bank pointed out several development challenges facing CEMAC, including high and stagnant poverty rates, a lack of job opportunities, and rapid population growth. To address these issues, the Bretton Woods institution recommended that member countries strengthen economic governance, improve public sector efficiency, create a favorable environment for the private sector, and enhance human capital through policies aimed at fostering a healthy and skilled workforce.

In the medium term, the World Bank forecasts moderate economic growth for CEMAC, reaching 2.5% in 2024, with a slight increase projected for 2025-2026.

Source: Business in Cameroon