Regional economic integration holds promise for Gabon

Although it has one of the region’s smallest populations, Gabon has long been a visible and effective diplomatic player in Central Africa, aided in part by strong ties to France – and more recently Asian economies – as well as by a comparatively high per-capita income and GDP.

The clearest example of the country’s clout is within the Central African Economic and Monetary Community (Communauté Économique et Monétaire des Etats de l’Afrique Centrale, CEMAC), the regional economic body that counts Cameroon, Chad, Equatorial Guinea, the Republic of the Congo and the Central African Republic as members.

CEMAC’s existence has allowed for a considerable level of regional integration, including a shared monetary policy and stock exchange, although deeper integration has been limited by a lack of harmonisation on other issues.

CEMAC History

The establishment of CEMAC in 1994 accelerated integration in Central Africa by creating a multinational body with common economic goals. The grouping was officially launched under the 1999 Declaration of Malabo, signed by the heads of state of the founding countries in Equatorial Guinea’s capital, Malabo.

Although the founding declaration of CEMAC included other members of the larger Economic Community of Central African States, which also includes Sao Tomé and Principe, Angola, Burundi and the Democratic Republic of the Congo, CEMAC sought to focus on tighter integration among the six founding member states.

Founding Goals

has enjoyed a certain degree of success in terms of economic integration, with a shared currency, a joint banking regulator and a number of countries listing bonds on the joint stock exchange. Members have established the free movement of capital, a unified tariff policy to regulate goods entering from outside the bloc and a common value-added tax rate for the six economies in the grouping.

The regional organisation has set up its own central bank, the Bank of Central African States, which is in charge of issuing and regulating the shared currency, the African Financial Community (Communauté Financière Africaine, CFA) franc. Despite the potential of its own currency for the development of regional trade, the CFA’s link to the euro has restricted the bank’s ability to implement independent monetary policies.

The regional bloc includes other important financial institutions, such as the Development Bank of Central African States, in charge of financing social development programmes, and the Bourse de Valeurs Mobiliéres, which serves as CEMAC’s shared regional stock exchange.

Besides the enhancement of economic integration to promote growth, CEMAC has other objectives that remain a core priority of the bloc. One is to maintain peace and stability in the region. It also seeks to increase the level of human and social integration of the populations of CEMAC countries. Lastly, it aims to expand financing for CEMAC states, by establishing an autonomous financing body for the economic bloc.

Furthermore, cooperation has yielded results in other important areas. CEMAC countries have established common policies on forestry and agricultural development, as well as plans to improve transport and communication links between the different member states.

In addition, CEMAC member states have sought military cooperation by pooling resources. This was one of the key drivers for the eventual creation by CEMAC members and other countries in the region of a multinational peacekeeping force, the Multinational Force for Central Africa, whose mandate is to carry out peacekeeping missions.

Testing its Limits

As one of the more economically developed countries in the bloc and home to the regional stock exchange, Gabon has cemented a strong presence within the regional body. Libreville recently hosted the 12th ordinary CEMAC summit in May 2015, allowing member states to discuss pressing issues, such as the effects of lower oil prices and security concerns in the Gulf of Guinea and the Lake Chad region.

Challenges

However, with the region affected by political and economic challenges, CEMAC’s ability to consolidate cooperation is under scrutiny. One of the immediate challenges is economic. According to the IMF, CEMAC’s growth for 2015 may be lower than initially expected, at around 2.2% instead of the 4.2% that had been previously announced by the Bank of Central African States, and less than half of the 4.6% growth registered for the region during 2014. Lower growth predictions by the IMF are based on the fall in oil revenues, which is set to impact public investment plans not only in Gabon but also in Equatorial Guinea and the Republic of the Congo.

The ongoing conflict in the Central African Republic, as well as the growing threat of piracy in the Gulf of Guinea, have stretched CEMAC’s ability to deal with regional security issues in a coordinated way. Facing piracy became a critical test for Gabon. In July 2013, pirates hijacked an oil tanker and its 24-person crew near Port-Gentil, the first such attack in Gabonese waters in five years.

In his strategic policy announcement in March 2014, Prime Minister Daniel Ona Ondo, who took office in January 2014, stressed the importance of reinforcing Gabon’s border security, both to prevent illegal immigration by land and also to protect the country’s coastal waters. The 2015 summit in Libreville, attended by four of the six heads of state, also sought to tackle some of the bloc’s long-term objectives, including the free movement of CEMAC citizens and the establishment of a single visa zone, similar to Europe’s Schengen zone.

Free Movement

The topic is a thorny one, particularly for Gabon, where concerns over irregular immigration – due in part to local unemployment and poaching – have prompted the country to maintain strict border controls. However, the bloc is hoping to eventually allow for free passage of member state citizens throughout the zone.

The proposal was initially mooted in 2013, when it was suggested that CEMAC citizens be fully exempt from visas for fellow member states, but concerns from Equatorial Guinea held up the implementation of the project. However, discussions earlier in 2015 proved more fruitful and the conclusion of the conference saw the announcement by Pierre Moussa, the president of the CEMAC Commission, of the removal of all visa controls for CEMAC citizens who possess a biometric passport.

Other integration plans have faced difficulties and ended up being abandoned, such as the goal of establishing a regional airline to better connect CEMAC countries, initially floated in 2010, and for a time linked in the press with investors both from South Africa and France. The plan was recently shelved due to a lack of progress.

Despite an increasingly complex regional environment, CEMAC has proven that it can contribute to the integration of its member economies. One of its biggest challenges will be to implement overarching policies within a group of states with diverging economic realities.

For example, while Cameroon had a GDP per capita of $1426 as of 2014, according to data from the World Bank, the equivalent figure for the Central African Republic was just $378. This discrepancy is symptomatic of the bloc’s biggest challenge; however, it also highlights the necessity of the community and its efforts to boost economic integration and trade between member states.