Countries in Central Africa cash strapped



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The countries of the Economic and Monetary Community of Central Africa (CEMAC), Several months now have been suffering from a shortage of foreign currency access, penalizing households and businesses.

This is due to the fall in oil prices, six countries CFA The euro zone was pegged to the euro by a fixed exchange rate.

In Libreville, the sun is barely rising but in front of the closed door of a money transfer agency a file has already been formed.

I'm here since 6:00 am to send money to my son who is studying in France, I'm here yesterday … without success.

Patrick, in his fifties, kicks his feet, says, "Here I am 6:00 to send money to my son who is studying in France, I am here yesterday … without success."

"After eight o'clock, don't expect to send money," the guard warns at the entrance of another fund transfer agency in Gabon. "And if you travel to Europe and want to buy the euro, it's the same, you have to get up at dawn."

"Since mid-2018, we have difficulties getting foreign currency and in recent months the situation is worse than worse," said Deputy Secretary General of the Cameroon Employers (Gikam), Vincent Kosee.

According to a survey conducted in the first quarter of 2019, 71% of Gicam's businesses consider the difficulty of accessing foreign currencies to be a major concern.

In the past, to get foreign currency from their banks, "companies had to count between two and three days, today there is a month and a half of waiting!", Morne, Mr. Cote. These costs also jumped. Previously, "0.1% to 0.3% bank charges are now around 7-10%".

Importers who find it increasingly difficult to pay their foreign suppliers on time, "are forced to revise their prices up in the hope of maintaining their margins," the manager says.

Monetary measures

In 2014, the fall in oil prices, the main currency provider in the region, plunged the states of Semak into a deep crisis.

Foreign exchange reserves held by the Bank of Central African countries (BEAC), Which service in particular to guarantee the CFA– Theero Frank covenant, has collapsed, leaving the specter of devaluation.
And, according to The Economist Nongo Samba Silla, co-author of the book "The Invisible Weapon of Frankofrike, A Story Of The CFA Frank, "Paris, instead of" playing its role of insurer, pushing the states of the Semak to walk through the box IMF ".

In 2017, the International Monetary Fund found reform assistance programs with four of the six countries in the zone (Gabon, Chad, Cameroon and Central Africa).

The money released by these IMFAnd the rise in oil prices in 2017 is set to change foreign exchange reserves. But "they were not reconstituted as quickly as they were hoping," noted Ruben Nisard, a specialist sub-Saharan Africa co-fund insurer.

However, fixed parity with the euro is statistically guaranteed by foreign exchange reserves of member countries, so "the zone is obliged to adopt restrictive monetary measures," analyzes Silla.

Foreign currency nightmare

To cope with and increase the level of reserves BEAC Hardest the conditions for obtaining foreign currency for banks ", refusing the demands" so our customers can pay their foreign suppliers "assures the head of a bank of Gabon AFP, Confirming information from local media.

On the contrary, the institution points to the responsibility of commercial banks, which would stop foreign currencies abroad, but "would also seek help from the central bank".

A nature, admittedly forbidden, but largely tolerated until then. "In this crisis, we are applying harder the exchange regulations, which were not always strict," A says. BEAC Analyst, on condition of anonymity.

But banks are not alone. "There are also countries, but especially the exporting companies and special mining companies that do not reprimand as they should the central bank," another official said. BEAC.

Restrictive monetary policy or behavior of economic actors, "in the meantime, it is the people who pay," Donated Mr. Silla.

AFP
_Picture courtesy _

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