The World Bank released its Spring edition of the semi-annual CEMAC Economic Barometer, detailing the recent economic situation in the Central African Economic and Monetary Community (CEMAC) and providing brief country analyses.
Key highlights from the report include:
1. **Growth Decline**: Growth in CEMAC countries fell from 3.1% in 2022 to 1.7% in 2023, primarily due to a significant decline in oil activity in Equatorial Guinea and transport disruptions affecting mining and wood production in Gabon. However, other CEMAC countries saw expansion driven by higher oil production and investment in Chad, non-hydrocarbon sector growth in Congo, services, manufacturing, and agriculture sectors in Cameroon, and increased gold and timber production in the Central African Republic.
Despite these expansions, average growth has been lower compared to countries from the West African Economic Monetary Union (WAEMU). Moderate growth is expected moving forward but faces risks such as commodity price shocks, higher borrowing costs, global trade disruptions, climate disasters, insecurity, and conflict particularly affecting regions of Cameroon, Central African Republic, and Chad.
2. **Inflation Trends**: Inflation has been on the rise since late 2021 but began declining in mid-2023. Consumer prices dropped from an average of 6.3% in December 2022 to 4.8% by September 2023 due to a tightening monetary policy by BEAC (the regional central bank) and lower commodity prices.
3. **Impact of Lower Oil Prices**: The decline in global oil prices negatively impacted CEMAC’s trade balance, fiscal position, and regional reserves which all deteriorated over 2023. Increased public spending further reduced fiscal space posing challenges for managing public debt levels with total debt-to-GDP ratios exceeding the target ceiling of 70% GDP for both Congo and Gabon.
4. **Employment Challenges**: High unemployment rates coupled with informality pose significant obstacles to poverty reduction efforts within CEMAC. One out of four youths are neither employed nor engaged in education or training which could lead to social instability. Policies promoting inclusion through investment in human capital are essential for reversing trends of lackluster growth.
Infrastructure gaps remain substantial with half of Congo's population lacking access to electricity while nearly nine out of ten people face similar issues across Chad and Central African Republic by 2021-22; inadequate roads/ports/trade controls/labor skills/high loan costs also hinder business activities significantly impacting private sector development.
5. **Social Spending & Governance**: Enhanced spending on education/health/social protection along with improved governance structures is crucial for protecting vulnerable populations thereby strengthening social inclusion within CEMAC region under PREF-CEMAC II strategy prioritizing human capital development till 2025 through securing funds supporting livelihoods via better governance practices necessitating stronger institutions capable efficient delivery public services implementing necessary reforms ensuring optimal resource management especially revenues generated from oil/mining/wood activities