Established in 1994 through a treaty signed by Gabon and five neighbouring states – Cameroon, Central African Republic, Chad, Equatorial Guinea and the Republic of Congo (Congo-Brazzaville) – the Economic Community of Central African States (Communauté Économique et Monétaire de l'Afrique Centrale, CEMAC) regional economic bloc was created as a successor to the Central African Customs and Monetary Union. It aims to harmonise regional policy across economic sectors, in addition to creating a common market based on the free movement of capital, goods, services and people. The economic grouping shares a common exchange rate framework and a single currency, the Central African franc, which is pegged to the euro at a rate of €1:CFA655.957.
CEMAC was officially launched in June 1999 at the Heads of State and Government Conference of the Economic Community of Central African States (Communauté Économique des États de l'Afrique Centrale, CEEAC) in Malabo, the capital of Equatorial Guinea. CEEAC adopted an action plan known as the Declaration of Malabo, which identified four priorities for the organisation.
First, CEMAC should develop the capacity for the maintenance of peace, security and stability in the region as prerequisites for its economic and social development. Next, the organisation was to seek the physical, economic and monetary integration of countries in the region. Third, it should aid the development of a culture of “human integration” to bring the people of the CEMAC region closer together. Finally, the community should aim to establish an autonomous financing mechanism for CEEAC.
While the Declaration of Malabo encompassed other CEEAC member states, CEMAC remains a separate organisation and the core monetary union. Additionally, it aims to help develop poorer areas within the union. There is a fairly wide spread of national income levels between the member states, with Cameroon at the top end of the spectrum, with GDP of $28.06bn in current prices in 2013, and the Central African Republic at the opposite end, with a GDP of $2.39bn.
Consistent Policy Focus
CEMAC has already made substantial progress: capital movement is free, and the member states have a unified tariff policy on goods from outside the bloc. There is also a universal rate of value-added tax across all six members of the bloc, and a high degree of convergence in policy-making has been possible.
The member countries of CEMAC have a common agricultural and forestry policy, a strategy for improving economic performance and stability, and shared infrastructure projects, particularly in rehabilitating communications links between the constituent countries. Member states also adhere to a non-aggression, solidarity and mutual assistance pact, and pool military resources as part of a multinational intervention force, which has been active in helping bring stability to the Central African Republic.
On the other hand, moves towards political integration have been progressing more slowly, in part due to domestic and regional conflict. This has not affected all CEMAC states, however, with some remaining more stable than others. Gabon, for example, has not been pulled into regional strife and has been able to play the role of mediator in disputes, retaining its reputation for security and tolerance.
CEMAC has a range of common institutions to manage, direct and represent various aspects of the bloc. The 1994 CEMAC treaty drew up four institutions: the Economic Union of Central Africa (Union Economique de l’Afrique Centrale, UEAC); the Monetary Union of Central Africa (Union Monetaire de l’Afrique Centrale, UMAC); the Community Parliament; and the Community Court of Justice.
CEMAC has also provided for a number of community organisations. The most senior body, though it is not directly involved in the day-to-day functioning of the union, is the Conference of Heads of State ( Conférence des Chefs d’Etat, CCE), which sets CEMAC policy and directs its decision-making bodies. The six heads of state meet roughly once a year to draw up guidelines for policy objectives, consider multilateral and bilateral issues, and oversee UEAC and UMAC. They can also add supplementary acts to the founding treaty should the need for these arise. The president of São Tome and Principé attends the CCE as an external observer. The presidency of the CCE corresponds with the presidency of the union, a role which rotates annually. In 2013, the president of Gabon, Ali Bongo Ondimba, held this position.
CEMAC’s central bank is the Bank of Central African States (Banque des États de l'Afrique Centrale, BEAC), which issues and regulates the CFA franc and is responsible for ensuring currency stability, although the link between the CFA franc and the euro has the effect of limiting the bank’s scope for independent monetary policy. The BEAC is based in the Cameroonian capital, Yaoundé, and has a long tradition of Gabonese governors.
The BEAC dovetails with the Central African Banking Commission (Commission Bancaire de Afrique Centrale, COBAC), which manages and regulates the economic bloc’s monetary and financial systems. The central bank’s governor is also the chairman of COBAC’s board to ensure cohesive policymaking. The commission has 12 members, including BEAC auditors, with whom it cooperates very closely.
COBAC is also working in partnership with the Organisation for the Harmonisation of Business Law in Africa (Organisation pour l’Harmonisation en Afrique du Droit des Affaires, OHADA), a 16-member body tasked with establishing a regulatory framework for regional business and investment, as well as the Inter-African Conference on Insurance Market, another regional group. The member states belonging to OHADA include Benin, Burkina Faso, Côte d’Ivoire, Guinea, Guinea-Bissau, Mali, Niger, Senegal, Togo, Comoros and CEMAC states. OHADA members are adopting common business laws in areas such as company law, arbitration, commercial legislation, bankruptcy, secured transactions and debt collection.
Given that development and investment targets are a key driving force behind CEMAC, the Development Bank of the Central African States is another vital institution. It is responsible for supporting economic and social development, coordinating with regional and local organisations, and running a range of projects. In April 2013, the bank published its strategic plan for 2013-17, which outlines commitments of CFA950bn (€1.45bn).
Gabon’s capital, Libreville, is home to the CEMAC stock exchange, the Bourse des Valeurs Mobilières d’Afrique Centrale. Established by the member states in 2003, the bourse is a private company with public sector objectives owned by a number of financial institutions and industries. It has both a primary and a secondary market with fully automated systems linked to financial intermediaries located throughout the CEMAC region. It is regulated by the Central African Financial Market Supervisory Commission, based in Libreville. Market capitalisation at the close of 2012 was CFA219.6bn (€334.7m).
Moving Towards Integration
With its range of institutions and policies that govern trade tariffs, monetary and fiscal policy, and region-wide regulatory structures, CEMAC aims to promote stronger integration across the region. While there appears to be political will for enhanced integration, there has been relatively little progress compared to other regional bodies so far. Indeed, there were concerns in 2009 that momentum was slowing, as the CCE summit was postponed twice that year, with this raising questions about member states’ commitment to furthering the union. However, the meeting subsequently took place in January 2010 in Bangui, the capital of the Central African Republic, and saw a renewed commitment by the heads of state to the bloc’s targets, with agreements for a common CEMAC biometric passport; Air CEMAC, a regional airline; and the creation of the CEMAC Parliament, which was opened in Malabo on April 15, 2010. The 30-member body includes five representatives from each CEMAC country, and it acts as an oversight body.
While CEMAC’s roots are many decades old, the impetus for economic union is newer. It may be judged a success thus far, given the short span of time in which it has been functioning and the challenges faced by its member states. The community has a range of institutions that work well with one another and other multinational bodies. Common community policy is developed in many areas and improving in others, including harmonised standards and political coordination. However, further development is needed: member states could benefit from reforms promoting investment, private sector activity and intra-regional trade, and the enhancement of shared infrastructure, especially in the area of transport. If CEMAC’s leaders maintain the momentum and political will seen in the last several years, the union could well move to the next level of integration.
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