BEAC announces design of new coins, crackdown on counterfeit producers.

 He made the announcement during a presser with journalists at the BEAC headquarters in Yaounde Monday June 24. 

The outing followed the Second Ordinary Session of the Monetary Policy Committee, MPC, of BEAC, which also took place in Yaounde same day. 

While announcing measures to tackle issues relating to the quality of coins, Sana Bangui, also said the institution will engage police authorities across the CEMAC Subregion to crackdown on counterfeit banknotes producers.

While responding to questions from reporters, he said BEAC is already working on designing new coins that will last longer. 

On the issue of a spike in counterfeit banknotes, the Governor indicated that the practice is a surging threat to economic stability, which must be tackled in partnership with security officials of member countries.

He said BEAC is aware of challenges relating to coins, assuring that “we will announce when new grams of coins are available. By the end of the year, we will officialise new coins”. 

The design and production of new coins, he said, is being pursued, taking into consideration the cost of raw materials.

Commitment to boost growth

On the bank’s financing of development, Sana Bangui said besides its lead role in guiding monetary policy, BEAC, as circumstances may warrant, also plays a vital role in keeping economies of member states and the Subregion vibrant.

“We have a statutory role to monitor and guide the monitory policy. We need a dynamic and strong economy. Sometimes, BEAC will come out to support economic growth. We need a convergent economic policy for CEMAC,” the Governor explained.

He disclosed that BEAC, in a bit to finance development, has put in place a special counter. He added that commercial banks in Cameroon are already taking interest in financing structural adjustment projects.

The Governor also cited the commitment of Heads of State of member countries of the Central African Economic and Monetary Community, CEMAC, to diversify the economies of their countries. 

He reiterated that: “This is particular for import-export. We want BEAC to be involved alongside other experts”.

Sana Bangui stated that: “We are open to accompany our countries to promote economic development. BEAC plays a key role in controlling exchange reserves”.

He also said the institution’s committee, charged with monitoring market trends, is equally working on a new liquidity control strategy,

SONARA reconstruction must be rapid

On aspects to boost the foreign reserves of member states, Sana Bangui said it is economically draining for CEMAC countries to be importing fuel. He said there are possibilities to reverse the trend, for which consultations are ongoing. 

In Cameroon, he expressed the urgent need to get the National Oil Refining Company Ltd, SONARA, back to production. 

In this light, he declared that: “SONARA should be restored quickly and put back to production. It is something I am working on with Cameroonian authorities. The situation of all CEMAC countries importing fuel, is weakening our reserves”.

Within the CEMAC Subregion, the MPC, put economic growth at 3.4 percent for 2024 compared to 2.3 percent in 2023. 

This performance, it said, is being driven by the nonoil revenue sector that contributes 3.8%, whereas last year the sector was responsible for only 2.3% of the growth rate.

The MPC identified other factors stabilising growth to include an increase in crude oil trade at 1.0%,  which was at -1.1% in 2023; “persistent, albeit declining, inflationary pressures, at around 3.9% annual average by the end of 2024, compared with 5.6% in 2023”.

Public finances, the committee also noted, have improved “with the budget balance on a commitment basis, including official donations, moving from a deficit of 0.2% of Gross Domestic Product, GDP in 2023 to a surplus of 0. 5%”.

The Monetary Policy Committee also talked of a “reduction in the current account surplus, including donations, from 4.2% of GDP in 2023 to 3.6% in 2024; an increase in money supply of 13.5% in 2024, compared to 9.1% in 2023”.

The session projected foreign exchange reserves to stabilise at 7,285 billion FCFA, by the end of 2024. 

The figure, he said, corresponds to a currency coverage rate of 78.4%. 

In December 2023, foreign exchange reserves was at 74.8%. In terms of trade, the projections for 2024, the MPC observed, could cover international trade for an average of  4.79  months, compared to an average of  4.82 months  in 2023.

Global economic outlook 

At the global level, the MPC committee cited the assessments of the International Monetary  Fund, IMF, as indicating that  growth will stabilise around 3.2 percent in 2024 and 2025. 

It also noted a “decline in inflationary pressures worldwide, geopolitical tension and geo-economic divisions not unconnected to the Russia-Ukraine war and the Israel-Hamas war in the Gaza strip. 

The committee also cited rates applied by central banks of major economies to curb inflation as further triggering ‘economic tension”.

Key rates unchanged

The Committee resolved for the second consecutive time since Sana Bangui’s reign began, to maintain different monetary rates in place. 

Among them are the Tender Interest Rate, which has been maintained at 5,000 percent; Marginal Lending Rate at 6,75 percent. 

Sources say it is the minimum below which a bank is not permitted to lend money.

It also maintained the Deposit Rate at zero percent interest. The Deposit Rate is the interest financial institutions pay on cash deposit of account holders. 

The Compulsory Reserve Coefficients of 7.00% on sight liabilities and 4.50% on Term Liabilities was also maintained. This is the   percentage of a bank’s deposit that must be kept as reserve.

This story was first published in The Guardian Post issue No:3149 of Tuesday June 25, 2024