The European Business Council for Africa

The COVID‐19 pandemic has been contained relatively successfully in Central Africa, which comprises the six member countries of the Central African Economic and Monetary Community (CEMAC)—Cameroon, the Central African Republic, Chad, the Republic of Congo, Equatorial Guinea, and Gabon—and the Democratic Republic of Congo. Partly due to government lockdowns, mask requirements, and mobility restrictions and partly to the region’s younger populations and distance from highly infected areas, COVID-related deaths in the seven countries totaled about2,953 at the end of June 2021. Thus, the region’s COVID deaths accounted for just 2.1 percent of all COVID deaths in Africa—the lowest level of all African regions. The highest tolls have been in Cameroon and the Democratic Republic of Congo, with 1,320 and 916 deaths respectively as of June 27, 2021.

Still, the pandemic has affected all Central African countries by damaging economic growth. The region’s economies, which were struggling before COVID-19 due to security challenges and oil price volatility, have experienced significant shocks due to their heavy dependence on oil exports. The curtailment in economic activity, coupled with decreased international demand for oil amid plummeting prices, caused the region’s average growth rate to fall to –2.6 percent in 2020, down from 2.8 percent in 2019. The worst-affected countries were the Republic of Congo (–6.8 percent),Equatorial Guinea (–6.1 percent), and Gabon (–2.7 percent). Country with positive growth rates in 2020 were the Central African Republic (0.4 percent). The pandemic has led to widening fiscal and current account deficits in Central Africa. Overdependence on oil revenues led to an average fiscal contraction of –4.6 percent of GDP for oil exporters and a widening of the current account deficit to more than –9.0 percent for Chad, Equatorial Guinea and Gabon. Slow growth in nonoil revenues in the oil economies of CEMAC, along with low levels of revenue mobilization in the Central African Republic and the Democratic Republic of Congo, have led to inadequate fiscal buffers. Moreover, total debt in Central Africa rose from an average of 48 percent of GDP in 2019 to nearly 55 percent in 2020. The region has benefited from significant external emergency financing.

Inflation has also risen in several Central African countries. The largest increase has been in the Democratic Republic of Congo, where it reached 11.8 percent in 2020, partly due to macroeconomic policy and a falling currency. Chad and Equatorial Guinea also experienced higher inflation. In facing the global crisis, reducing poverty and ensuring inclusive growth should be part of the regional policy dialogue, with implementation of social programs and reforms. COVID-19 is expected to have increased the number of poor people in the region by several million in 2020. Per capita income growth fell from –0.9 percent in 2019 to –5.6 percent in 2020. The coronavirus will have longer-term negative effects on human capital because of lockdowns, shutdowns of schools, and reductions in the provision of healthcare.

Central African governments introduced several socioeconomic measures after COVID-19 first surfaced. CEMAC countries and the Democratic Republic of Congo enacted stimulus measures equivalent to several percentage points of GDP, combining tax relief and liquidity injections with spending for public health measures and social sectors. These have varied by country depending on political economies. Only the Democratic Republic of Congo, which is on a flexible exchange rate system, has used its exchange rate to actively respond to the shock. In CEMAC countries monetary policy became more accommodative; in July 2020 the Bank of Central African States started repurchasing public debt securities totaling CFAF 600 billion ($1.04 billion). Though there are potential risks, the regional outlook remains favorable for a post-COVID recovery. Countries are expected to rebound to average 3.3 percent GDP growth in 2021, mostly thanks to higher oil prices. Successful containment and the global recovery have helped revive activity in CEMAC countries. The main risks remain new variants of the coronavirus, slow vaccination rollouts, and security issues—especially in Cameroon, the Central African Republic, Chad, and the Democratic Republic of Congo. To foster recovery, it will be crucial to strengthen fiscal buffers through aid or domestic revenue mobilization. In addition, better governance can help ensure that fiscal measures target vulnerable populations. Finally, CEMAC should examine exchange rate reform to find a system that promotes growth and adjustment to shocks.


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