CEMAC (Central African Economic and Monetary Community)

CEMAC (Central African Economic and Monetary Community) brings together six Central African states that share the CFA franc (franc of Central African Financial Cooperation), issued by the BEAC (Bank of Central African States), and a common foreign exchange regulation. On March 16, 1994, in N'Djamena, Cameroon, the Central African Republic, Congo, Gabon, Equatorial Guinea and Chad signed the treaty establishing the Central African Economic and Monetary Community, which succeeded the Central African Customs and Economic Union created in 1964. CEMAC brings together an economic union, whose Commission sits in Bangui, and a monetary union: the BEAC, in Yaoundé, issues the Central African CFA franc, pegged to the euro at the same parity as its West African counterpart but not interchangeable with it. COBAC (Central African Banking Commission) supervises the zone's banks. For an underwriter, CEMAC is first an oil economy with a fixed currency. When the oil price collapses, foreign exchange reserves melt, and the temptation to adjust through the peg returns. The heads of state who met in Yaoundé on December 23, 2016 ruled it out and chose programs with the IMF. The price of that choice is paid in exchange controls. The foreign exchange regulation adopted in December 2018, in force since March 2019, tightens the repatriation of export proceeds and subjects transfers to supporting documents that banks and the BEAC review one by one. Operators, notably in oil and mining, have complained of transfer delays, and it is this risk of slowness, more than declared inconvertibility, that the transfer risk cover addresses in the zone. It would be a mistake to read CEMAC as a bloc. Equatorial Guinea and Gabon have neither the same debt nor the same payment record as the Central African Republic or Chad, and the common currency does not erase those gaps; it shifts them onto the balance of payments of the whole zone. Business law, for its part, falls under OHADA (Organization for the Harmonization of Business Law in Africa), and insurance under the CIMA (Inter-African Conference on Insurance Markets) Code.