The World Bank has released the seventh edition of the CEMAC Economic Barometer, a report analyzing economic conditions in the Central African Economic and Monetary Community (CEMAC) region. This edition focuses on fiscal policies addressing challenges in the forestry sector.
The report projects modest growth for CEMAC countries, with an expected increase of 3.4% this year compared to 1.8% in 2023. However, growth remains uneven across the region. The Central African Republic faces economic stagnation due to fuel shortages and power outages, with growth projected at only 0.7%. In contrast, Equatorial Guinea is expected to see a 4.7% growth driven by a rebound in its oil sector.
Despite moderate growth and declining inflation, poverty levels remain high and are increasing throughout CEMAC countries. Approximately 33% of the region's population lives in extreme poverty, earning less than $2.15 per day.
The region heavily relies on extractive industries such as oil, gas, and mining, which account for about 75% of exports. These industries are not labor-intensive and create insufficient jobs for the growing population. With declining oil reserves and revenues, it is crucial for CEMAC to invest extractive revenues into human and physical capital to build resilient economies.
The report highlights untapped potential in the forestry sector within CEMAC countries and the Democratic Republic of Congo (DRC), located in the Congo Basin rainforest. Despite being strategically positioned, contributions from forestry to national budgets have remained stagnant. Illegal logging and corruption lead to significant revenue losses.
Efforts are needed to tackle deforestation challenges while balancing forest preservation with economic activities that may hinder sustainability. The timber industry could partially replace oil as an economic driver if managed sustainably.
To promote sustainable wood production and increase government revenues, fiscal reforms could calibrate tax rates based on environmental impacts of wood industry activities. Subsidies could support sustainable practices while tax rebates encourage forestry certification.
A robust governance framework is essential for effective implementation of these strategies alongside regional cooperation through harmonized regulations and improved policy alignment.