CEMAC Economic Overview 2024
Macroeconomic Highlights:
- Growth: CEMAC's economy grew at 1.7% in 2023, marking a slowdown from 3.1% in 2022. Per capita income dropped from 0.44% to -0.33%. The growth rate is notably lower than the 2.9% average for Sub-Saharan Africa and the 3.1% growth in the WAEMU region.
- Key Drivers: Growth is primarily influenced by the performance of oil and gas sectors, with a particular downturn in Equatorial Guinea and a slowdown in Gabon due to reduced production of minerals like wood and manganese.
- Regional Dynamics: Cameroon stands out as the fastest-growing economy in the CEMAC region, averaging 3.4% growth from 2021-2023.
Economic Challenges:
- External and Fiscal Positions: The region's external and fiscal positions worsened in 2023 due to lower oil prices and revenues. Current account surpluses decreased to 2.2% of GDP from 5.9% in 2022. Gross reserves fell to 4.8 months of imports, down from 5.2 months.
- Fiscal Pressures: Higher public spending in 2023 narrowed fiscal space and increased public debt. The fiscal surplus dropped from 2.9% to 1.1% of GDP. The Central African Republic faced a significant fiscal deficit of 3.5% of GDP.
- Debt Sustainability: The Republic of Congo faced the greatest challenge in reducing its debt-to-GDP ratio, estimated at 96.0% in 2023. Gabon’s debt-to-GDP ratio was just above the CEMAC target of 70.0%.
Inflation Trends:
- Monetary Policy: The BEAC maintained a policy rate of 5% since March 2023, having raised it by 175 basis points from November 2021 to March 2023. This helped contain inflation, which had been rising since late 2021.
- Inflation Reduction: Average annual inflation in the CEMAC region decreased to 4.7% in September 2023 from 6.3% in December 2022, partly due to improved global supply chain recovery.
Poverty Rates:
- Persistent Poverty: High, persistent, and stagnant poverty rates in CEMAC, with about 31.1% of the population living below $2.15/day in 2023. The poverty rate varies significantly across countries, from 2.8% in Gabon to 65.9% in the Central African Republic.
- Inequality: Poverty is exacerbated by low economic growth, lack of employment opportunities, and rapid population growth, particularly in the Central African Republic.
Economic Policy and Recommendations:
- Revenue Mobilization: There is a need for stronger domestic revenue mobilization to build a more sustainable revenue base.
- Debt Management: Implement reforms to strengthen debt management and rationalize spending, prioritizing investments in infrastructure, human capital, and targeted social protection.
- Labor Market Development: Focus on promoting job creation and enhancing labor skills, particularly for youth, to address high unemployment rates in Gabon and the Republic of Congo.
This overview highlights the challenges and opportunities facing the CEMAC region, emphasizing the need for structural reforms and investment in human capital to drive sustainable growth and reduce poverty.
