Central Africa to maintain 2.2% economic growth amid challenges

The committee anticipates a 2.2% economic growth in the sub-region for 2023, with a notable -2.7% decline in oil activity compared to -0.7% in 2022, vox.cg reports.

Th 4th regular session of the BEAC monetary policy committee highlighted consistent inflationary pressures at an annual average of 5.6% in both 2022 and 2023. The commitment-based budget balance, excluding grants, saw a decrease from 2.4% of gross domestic product (GDP) in 2022 to 1.7% in 2023.

Additionally, there was a projected increase in the money supply by 9.2% in 2023, compared to 13.5% in 2022. Foreign exchange reserves were expected to decline from 4.95 months of imports of goods and services in 2022 to 4.12 in 2023, accompanied by a drop in the external currency coverage rate from 73.1% in 2022 to 4.12% in 2023.

The meeting, conducted via videoconference, revealed a shift in the current account balance, including official donations, from a surplus of 5.9% of GDP in 2022 to a deficit of -0.2% in 2023.

Considering the international economic and financial landscape marked by significant certainties and the sub-regional level characterised by favourable macroeconomic accomplishment since the 3rd quarter of 2023, the monetary policy committee has decided to maintain the following rates: Tender interest rate at 5.00%; Marginal lending facility rate at 6.75%; Deposit facility rate at 0.00%; Mandatory reserve coefficients at 7.00% on sight payables and 4.50% on term payables.

The Central African Economic Outlook 2023 published in July 2023, indicated that in 2022, Central Africa showed a comparatively lower inflation rate of 6.7 percent, indicating a better performance than other African regions – specifically North Africa, 8.2 percent, Southern Africa, 12.6 percent, West Africa experienced 17 percent, and East Africa saw the highest inflation at 28.9 percent, the AfDB reported.