The International Monetary Fund, IMF, has warned countries in the CEMAC zone to consolidate public finances in order to put an end in falling foreign exchange reserves.
The IMF’s advice is stated in its 2017 report on “Regional Economic Outlook for Sub-Saharan Africa” published recently.
Going by the IMF, many countries suffered from a sharp fall in commodity prices in 2016.
“This is particularly the case for countries exporting commodities, particularly oil exporting countries, such as Angola, Nigeria and the countries in the Central African Economic and Monetary Community (CEMAC)”, the report states.
According to the report, the delays observed in the execution of adjustments had led to an increase in public debt, created uncertainty, restricted investments and could possibly generate even more important problems in the future.
The IMF in the report opines that most affected countries can still clean up their public finance sector and put an end to the decrease in foreign exchange reserves and offset losses in budget revenues, especially in the CEMAC countries. It should be recalled that this is in line with the alarm raised in April by Kadima Kalondji, resident representative of the IMF in Cameroon.
In 2010, while addressing media professionals in Libreville, Kadima Kalondji had said the community’s foreign exchange reserves were six thousand billion F CFA. Since then, the reserves have dropped to two thousand billion F CFA, revealing an erosion of four thousand billion F CFA in 2016.
IMF’S representatives have also taken turns to lay the blame on the fall in revenues and oil exports as well as the explosion in public investment expenditure on the difficult and unfavourable financial environment for oil-based economies.