CEMAC Banking Sector: IMF Recommends Regulation, Supervision

By Godlove BAINKONG, Cameroon Tribune, 05-06-2014
Its 2014 Regional Consultation on Common Policies ended in Yaounde yesterday June 5.

An International Monetary Fund (IMF) mission for the Central African Monetary and Economic Community (CEMAC) has urged member countries to strengthen banking sector regulation and enhance supervision to improve access to finance services within the sub-region which it notes, is among the lowest in Africa.

Toujas-Bernaté, leader of the IMF 2014 mission on Regional Consultation on Common Policies for CEMAC member countries, made the remark on June 5 during a press briefing to round off the May 21 to June 5, 2014 mission.

He said the development of the government securities market will be key to deepening the financial sector and provide adequate financing to governments for investment projects. The mission noted that the main medium-term challenges for the CEMAC region is to achieve higher, sustainable and more inclusive growth in order to create more jobs and accelerate poverty reduction. “These objectives should be supported by a sustainable improvement in the business climate and a deepening of regional integration. BEAC and the CEMAC Commission have an important role to play in this regard, notably improving the coordination of fiscal policies, promoting initiatives to remove barriers to internal and external trade, implementing critical reforms in the financial sector and spurring business environment reforms,” a press release that sanctioned the IMF mission read.

The mission noted that high oil revenues have supported large and much needed infrastructure investment spending but the buildup of fiscal buffers, it specifies, has remained uneven. “Member countries, in coordination with the regional institutions, should better prepare for a possible temporary fall in oil prices by creating fiscal buffers to sustain development. They should also remain cautious in public debt buildup to minimize risks of debt distress in the medium and long terms,” the release stated.

Going by the conclusions of the IMF mission, CEMAC’s economy for the second half of 2014, points to a pickup in growth. “Regional real GDP growth is projected at 5.5 per cent, as oil production will increase. Inflation is expected to remain below 3 per cent and fiscal balance will deteriorate further due to a slight decline in revenues. Worsening security situations in some areas of the region could affect growth negatively and lack of structural reforms could limit expected development of the private sector,” the statement indicated.