At meeting in Douala: MINFI sensitises stakeholders on foreign exchange regulations in CEMAC.

It brought together managers of foreign trade companies, exchange offices, insurance companies, credit and microfinance institutions.

Also in attendance were financial and economic experts from the Ministry of Finance, Bank of Central African States, BEAC, and Central African Banking Commission, COBAC. 

Speaking at the opening of the session, the Director of Financial and Monetary Cooperation at MINFI, Sylvie Eyeffa Ekomo, said the seminar aimed to vulgarise exchange rate regulations.

She disclosed that it was holding at a very sensitive economic period, marked by downward trends in reserves in the Central African sub-region, which represents a serious threat to its monetary stability. Eyeffa Ekomo said sustainable solutions were therefore needed.

During the sitting, financial experts discussed on current exchange challenges, identified sustainable solutions, and proposed avenues for improvement for an effective implementation of foreign exchange regulations. 

Cameroon key player in CEMAC

It was revealed that Cameroon holds more than 50% of CEMAC’s foreign exchange reserves and must play its role as a locomotive.

Recall that during the Extraordinary Summit of CEMAC Heads of State on September 16, 2024, in Yaounde, the Conference of Heads of State reaffirmed the urgent need to strengthen measures to reconstitute and preserve foreign exchange reserves. 

These measures include; strict application of exchange regulations, effective repatriation of export earnings, optimised management of financial flows among others.

It should be recalled that after the fall of prices on raw materials on the international market in 2015, the Central African Monetary Union recorded a drastic drop in foreign exchange reserves, thus threatening the monetary stability of the sub-region. 

In 2016, Cameroon’s foreign exchange reserves, it was said, stood at 636 billion FCFA, less than half of the amount in 2015. 

Since then, significant efforts have been made to rebuild its reserves. As of December 31, 2023, CEMAC’s reserves reached 6,698.8 billion FCFA. 

However, it decreased by 5.8% in December 2024 to stand at approximately 6,484 billion FCFA, corresponding to 4.4 points of imports. 

“This downward trend reflects a slight progressive erosion. Despite increases from 2.3 months of imports in 2016 to 4.6 months of imports in 2023, reserves fell back to 4.4 months of imports in December 2024,” Eyeffa Ekomo noted.

She added that as the objective is to increase foreign exchange reserves to five months of imports, it will require increased vigilance. 

Thid, she added, necessitated the urgent need to organise the seminar in order to strengthen the compliance of operators with foreign exchange regulations, and ensure lasting monetary stability.

BEAC’s role in ensuring stability

Aware of the role played by the monetary authority in the proper implementation of the exchange regulations, the operators were informed about the role of the BEAC in the request for export pre-financing files. 

They also upgraded their knowledge on conditions of the procedures to be fulfilled to benefit from the facilities, as well as the regulatory provisions governing its operations. 

Information on the eligibility criteria, processing times, and practices drawn from previous experiences to better guide operators was equally dished out. 

To this effect, the central bank, has prescribed essential pillars, which are identification and monitoring of customers, internal organisation that is, procedures and monitoring, and cooperation or reporting of suspicious transactions. 

It remains imperative for Cameroon to strengthen these systems, but the challenge is to avoid a shift to the black list, which would have serious economic and financial consequences.

Tackling shortcomings

Notwithstanding, economic regulators have noted that the main shortcomings of the foreign exchange regulations are on the move to tackle them.   

In this perspective, the government, through MINFI, has included a provision in the new finance law for the 2025 aimed at strengthening the compliance of foreign exchange regulations. 

Hence, exchange offices are required to supply their cash registers with foreign currency mainly through credit institutions. 

Violations of the regulations in force will emanate in sanctions ranging from warnings to permanent withdrawal of approval for serious or persistent violations, as well as fines and temporary suspension of approval for repeated breaches. 

Non-compliance has a negative impact on the fight against money laundering, the financing of terrorism and the regulation of the foreign exchange market, particularly currencies in circulation. 

Compliance with these regulations is essential to ensure transparency and economic stability in CEMAC. 

Talking on export earnings, Ériz Pokem, Deputy Director of Exchange and Transfers at the DGTCFM/MINFI, said the repatriation of export earnings plays an important role in trade with the outside world. 

“It feeds the foreign exchange currency assets of a State or a group of States. An economic operator who invests outside the CEMAC zone must repatriate his earnings. If this is not done, we must be informed. However, some flows still escape monitoring, which impacts our ability to build up our economy,” he said.

This article was first published in The Guardian Post Edition No:3368 of Monday February 17, 2025