Experts discuss ways to improve monetary policy in Francophone Africa.

The hybrid event was organised by the Nkafu Policy Institute of the Dennis and Lenora Foretia Foundation.

The meeting, which brought together some economic analyst and researchers, was placed under the theme: “Providing evidence-based policy to improve the effectiveness of monetary policy in Francophone Africa”. 

Francophone Africa has two monetary unions with each currency zone. The monetary policies of the two central banks, the Bank of West African States, BCEAO, and the Bank of Central African States, BEAC, are unique and primarily aimed at maintaining price stability and supporting economic growth. 

However, the effectiveness of these two monetary policies remains weak, with market interest rates and inflation showing little responsiveness to the actions of these two central banks. 

The Director of Economic Affairs of the Nkafu Policy Institute, Dr Jean Cedric Kouam, explained that: “This meeting was about how we can use data or research to strengthen the effectiveness of monetary policy in Francophone Africa. We wanted to know how data collected in the field can improve policies and also change some policies in Francophone Africa”. 

He added that: “We (CEMAC) are is small and open economy and when a decision is taken abroad, for instance price increase, it will have a negative impact on our economy. The monetary policy is a good short term policy to fight against some shocks that our economy may be facing”. 

According to Dr Kouam, CEMAC has been in a monetary agreement with France since 1972, and the dynamics having changed overtime, it is important for parties to revisit the terms of the agreement with France. 

On his part, Prof Mignamissi Dieudonne, Associate Professor at the Faculty of Economic and Management in the University of Yaounde, argued that member states and the central banks must look in the same direction in order for the monetary policy to be effective and have positive impact on the population. 

“It is important to accord to the central bank objectives that have budgetary connotation in order to grow its correlation between monetary policies and the states. The states have problem of credibility, debts and of which sometimes do not match with the objective of the central bank,” Prof Mignamissi added.