Central African Economic and Monetary Community (CEMAC): Press Release; Staff Report; and Statement by the Executive Director

CENTRAL AFRICAN ECONOMIC AND MONETARYCOMMUNITY—PRESS RELEASE;STAFF REPORT,ANDSTATEMENT BY THE EXECUTIVE DIRECTOR In thecontext of the common policies of member countries, and common policies in support ofmember countries reform programs, the following documents have been released and are includedin this package: •APress Releaseincluding a statement by the Chair of the Executive Board. •TheStaff Reportprepared by a staff team of the IMF for the Executive Board’s considerationonFebruary24,2025, following discussionswith regional institutionsthat endedonJanuary 7,2025. Based on information available at the time of these discussions, the staffreport was completed onFebruary 10,2025. •AStatement by the Executive Director. TheIMF’s transparency policy allows for the deletion of market-sensitive information andpremature disclosure of the authorities’ policy intentions in published staff reports andother.documents. Copies of this report are available to the public fromInternational Monetary Fund•Publication ServicesPO Box 92780•Washington, D.C. 20090Telephone: (202) 623-7430•Fax: (202) 623-7201E-mail:publications@imf.org Web:http://www.imf.orgPrice: $18.00 per printed copyInternational Monetary FundWashington, D.C. IMF Executive Board Concludes Annual Discussions onCEMAC Common Policies and Common Policies in Support ofMember Countries Reform ProgramsFOR IMMEDIATE RELEASE •The CEMAC economy lost momentum in 2023 due to a contraction in hydrocarbon production,while the external position weakened. •The commitment expressed at the extraordinary Heads of State Summit in December 2024 toaddress macroeconomic imbalances, strengthen regional institutions, and prioritize structuralreforms offers hope for a more resilient medium-term outlook. •Implementing fiscal consolidation in line with these commitments and accelerating structuralreforms will be critical to bolstering economic diversification and resilience. Washington, DC: On February 24, 2025, the IMF Executive Board concluded the annual discussionswith the Central African Economic and Monetary Community (CEMAC) on Common Policies ofMember Countries and Common Policies in Support of Member Countries Reform Programs.1 The CEMAC economy slowed in 2023, driven by a decline in hydrocarbon production, with real GDPgrowth decelerating to2.5 percent.The external position weakened as the accumulation of foreignexchange (FX) reserves slowed, leaving them below adequate levels. Economic activity is estimatedto have gained some momentum in 2024, with real GDP expanding by 3.2 percent, supported by arebound in hydrocarbon output. However, regional policy assurances on the net foreign assets(NFA) for end-June 2024 (EUR 4.5 billion) were not met, falling short by EUR 4.43 billion. Preliminarydata also suggest that the end-December 2024 policy assurances on NFA are unlikely to have beenmet. This reflects a weakening external position due to lower oil prices and fiscal slippages. Inflationremained persistently high at 4.3 percent in September 2024, exceeding the regional convergencecriterion. While regional authorities maintained an appropriate monetary policy stance, progress on the reformagenda has slowed somewhat. At its September 2024 meeting, the Central Bank (BEAC) kept thepolicy rate unchanged at 5 percent and continued its weekly liquidity injections through its mainrefinancing window to mitigate increased volatility of liquidity conditions in the banking system. BEACalso advanced the enforcement of the FX regulations. BEAC and the Banking Commission of CentralAfrica (COBAC) remained engaged with banks structurally dependent on BEAC’s refinancing,ensuring they submit credible refinancing plans. The CEMAC Commission has sustained its regionalsurveillance consultations across member States, while the Permanent Secretariat of CEMAC’sEconomic and Financial Reform Program (PREF-CEMAC) has continued implementing the region’sstructural reforms action matrix. The outlook remains clouded by high uncertainty. Its trajectory depends on the effectiveimplementation of corrective measures by member states, consistent with the commitment made atthe extraordinary Heads of State Summit in December 2024 to address macroeconomic imbalances,strengthen regional institutions, and advance structural reforms. In the near term, real GDP growth isprojected to slow to 2.8 percent in 2025, primarily due to weaker oil output. Inflation is projected todecline further to 3.1 percent by end-2025, reflecting the lagged effects of past policy tightening andlower global commodity prices. Significant downside risks remain, including delays in addressingfiscal slippages, declining commodity prices, tighter financial conditions, heightened politicaluncertainty amid a busy 2025 election calendar, persistent inflation, financial instability, slowstructural reform progress, food insecurity, domestic conflicts, and climate-related disruptions. In the medium term, growth is projected to strengthen to 3.