Chapter

Appendix: Introduction to the CEMAC Institutions

Author(s):
Bernardin Akitoby, and Sharmini Coorey
Published Date:
August 2012
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Author(s)
Salao Aboubakar

The Central African Economic and Monetary Community (CEMAC) comprises six countries in Central Africa that have been engaging in various forms of economic and monetary cooperation with each other for more than a half century. Cameroon, the Central African Republic, Chad, the Republic of Congo, Equatorial Guinea, and Gabon established a formal framework for cooperation under the treaty signed in N’Djamena, Chad, on January 16, 1994. The CEMAC emerged as the successor to the Customs and Central African Economic Union, the initial framework for cooperation between the six countries, founded by the Brazzaville Treaty of December 1964. The population of the CEMAC region is estimated to be about 40 million inhabitants, spread over a surface area of 3,020 million square kilometers.

Article 2 of the CEMAC treaty stipulates: “The main aim of the Community is to promote peace and the harmonious development of the Member States, through the institution of two Unions: an Economic Union and a Monetary Union.1 In each of these two areas, the Member States intend to move from the existing form of cooperation between them to the creation of a Union conducive to completing the process of economic and monetary integration.”

The Central African Monetary Union (UMAC)

The UMAC manages all issues related to currency, finance, and banks. A central feature of the UMAC is the adoption of a common currency, the Coopération Financière en Afrique Centrale (CFA) franc, the issuance of which is entrusted to a common central bank known as the Bank of Central African States (BEAC).

In general terms, the UMAC is responsible for

  • the management of the rules governing currency issuance;

  • the pooling of foreign currency reserves;

  • the free circulation of banknotes and coins and freedom of transfers among the states of the union;

  • the preparation of measures aimed at the harmonization of monetary, banking, and financial legislation, and exchange arrangements; and

  • multilateral surveillance, in collaboration with Central African Economic Union (UEAC), through the coordination of economic policies and the establishment of national fiscal policies consistent with the common monetary policy of the union.

To fulfill its multiple missions in the area of monetary integration, the UMAC comprises the following elements:

  • a common currency, the franc of Financial Cooperation in Central Africa, also known as the CFA franc;

  • a common central bank, the BEAC, which has the exclusive authority to issue bank notes and coins with legal tender in the six member states. The BEAC also manages the common pool of foreign currency reserves;

  • a common authority for banking supervision and microfinance activities, the Central African Banking Commission, which has extensive powers to regulate the banking system of member states. These include administrative powers (licensing of credit institutions and their managers, and the like), and regulatory and jurisdictional powers to sanction any noncompliance observed, with all six countries being subject to a single body of banking laws;

  • a common stock market, the Central African Stock Exchange;

  • a common body responsible for financial market supervision, the Central African Financial Oversight Commission;

  • a common body responsible for the management of means of payment, the Central African Electronic Banking Company;

  • a common body responsible for the regulation of means of payment, the Central African Electronic Banking Authority;

  • a common body responsible for combating money laundering and terrorist financing, the Task Force on Anti-Money Laundering and Combating the Financing of Terrorism in Central Africa;

  • a common body responsible for regulation of the insurance market, which also covers the member countries of the West African franc zone, the Inter-African Conference on Insurance Markets;

  • a common body responsible for the supervision of insurance companies, the Insurance Supervisory Commission; and

  • a common body of laws and accounting framework, which also covers the member countries of the West African franc zone, the Organization for the Harmonization of Business Law in Africa.

The Central African Economic Union (UEAC)

The UEAC, in turn, is responsible for achieving the following objectives:

  • strengthening economic and financial competitiveness by harmonizing the rules conducive to improving the business environment, and regulating its functioning;

  • promoting convergence on sustainable growth through the coordination of economic policies and ensuring the consistency of national fiscal policies with the common monetary policy;

  • creating a common market based on the free movement of goods, services, capital, and people; and

  • fostering the coordination of national sectoral policies, implementation of common actions and adoption of common policies, particularly in the following areas: agriculture, livestock farming, fisheries, industry, commerce, tourism, transport, community land use planning and development and major infrastructural projects, telecommunications, information and communication technologies, social dialogue, gender issues, good governance and human rights, energy, the environment and natural resources, research, and education and vocational training.

Several specialized institutions of the UEAC contribute to achieving these goals: the Central African Development Bank; the Economic Commission for Livestock; Meat; and Fisheries Resources; the Court of Justice of the Community; the Regional Hotel and Tourism School; the Central African School of Telecommunications; the Development Fund of the Community; the Institute of Economics and Finance; the Sub-regional Institute of Statistics and Applied Economics; the Sub-regional Multisectoral Institute of Applied Technology, Planning, and Project Evaluation; and the Organization for the Coordination and Control of Endemic Diseases in Central Africa.

The texts creating and governing the Central African Monetary Union (UMAC), the Central African Economic Union (UEAC), the Community Parliament, and the Court of Justice of the Community complement the treaty establishing the CEMAC.

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