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IMF chief joins Cameroon summit on oil woes

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AFP Yaounde
Last Updated : Dec 23 2016 | 6:33 PM IST
IMF chief Christine Lagarde today joined a Cameroon summit of central African leaders aimed at tackling economic woes brought on by weak oil prices.
"Our foreign exchange reserves have dropped substantially," Cameroon's President Paul Biya said in his opening address. "We need to act and fast, we should act together."
Lagarde's presence had not been announced previously, nor had that of French Finance Minister Michel Sapin who also joined the meeting.
Some of the foreign exchange reserves of central African nations using the CFA franc are held by the French treasury.
Historically, the currency used in much of central and west Africa was pegged to the French franc. It is now fixed to the euro.
Cameroon's leader, who has been in power since 1982, said he was waiting for "some useful light" to be shed on the situation by the International Monetary Fund.

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The Yaounde-based Bank of Central African States (BEAC), which serves six countries, estimates that the growth of gross domestic product across the zone will not exceed one percent in 2016, down from 2.4 per cent the previous year, which had already been deemed disappointing.
"The deceleration of growth is more marked than initially forecast," the central bank said, blaming damaging effects of the "morose state of the oil sector".
A source close to the talks said that the Yaounde meeting should enable experts from countries of the region - Cameroon, Central African Republic, Chad, Equatorial Guinea, Gabon and the Republic of Congo - to study solutions to "clean up the situation".
"These countries have for several months been confronted (with a fall) in their oil exports. As a result, their monetary reserves have diminished."
The deeply poor and restless CAR is the only one of the six nations in the Economic and Monetary Community of Central Africa (CEMAC) to have developed no oil industry.
The CFA franc, introduced in 1945, is also used by the eight members of the West African Economic and Monetary Union: Benin, Burkina Faso, Guinea-Bissau, Ivory Coast, Mali, Niger, Senegal and Togo).
On the basis of monetary cooperation agreements with both regions, Paris underwrites the convertible status of the CFA franc with the single European currency, just as it did with the French franc.

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First Published: Dec 23 2016 | 6:33 PM IST

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