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Will the Central African bloc grow by up to 5.5 percent in 2014 as predicted by the International Monetary Fund? By Chofor Che, 7 June 2014


On the 5 of June 2014, the International Monetary Fund (IMF) predicted that economic growth in the six-nation Central African CEMAC bloc is set to double to between 5 and 5.5 percent in 2014. According to an article by Reuters dated the 6 of June 2014, this growth is supposed to be pivoted on the back of increased oil production.
The CEMAC zone is composed of Central African Republic, Gabon, Cameroon, Chad, Congo-Brazzaville and Equatorial Guinea. Reuters reports that five of these states produce oil, which accounts for 36 percent of the region’s Gross Domestic Product (GDP) and 87 percent of total exports. Growth reduced to around 2.5 percent in 2013 because of a substantial drop in oil output. The CEMAC zone’s central bank forecast 2014 GDP growth at 6.7 percent in March.
In an IMF statement at the end of a two-week evaluation mission, the team said “The outlook for the remainder of 2014 points to a pick-up in economic growth. Regional real GDP growth is projected at 5 to 5.5 percent, as oil production will increase. The team added that inflation is expected to remain below 3 percent.

The medium-term outlook seemed solid because of strong growth in non-oil sectors, but a projected decline in oil production was expected to bring overall growth down, observed Reuters. It is sad how states in the CEMAC zone depend on oil production to boast their GDP whereas there are sectors which can fire GDP up if harnessed such as the agricultural sector which remains under-exploited. The IMF confirmed that the deteriorating security situation due to conflict in Central African Republic and attacks by the Boko Haram Islamist group in Nigeria could also cut into growth.

The Central African region especially the CEMAC zone needs to get serious about other sectors of the economy rather than just relying on oil production. This zone has great potential in revamping the agricultural sector but has instead open room for land grabbing. Instead of ensuring that the populace in this zone benefits from vast arable farm land, governments in the CEMAC zone are giving away the land while their people languish in poverty.
Countries in the CEMAC zone still have a long way to go with respect to South-South cooperation. Rather than depending heavily on oil production to attain a 5.5 percent growth, which is not so evident, this zone needs to encourage trade amongst states in the zone and beyond. In recent weeks there have been tensions along the Gabonese and Cameroonian boarders. Both countries have accused each other of illegal poaching and trade which have led to arrests and repatriation of citizens from both states. There is need to encourage free trade among members states of this zone. Tensions amongst member states, such as that between Gabon and Cameroon will instead shrink growth in 2014 instead of boasting it.

Corruption also remains a serious reason why I remain pessimistic about the IMF’s predicted 5.5 percent growth in 2014. A recap on the Doing Business Report of 2013 and 2014 shows that states in the CEMAC zone are tailing the list when it comes to doing business. For instance, according to the AtlasFreeTrade.org initiative, Cameroon’s trade freedom ranks 128 out of 158 states and both the cost of doing business and tariffs remain extremely high. This picture mirrors itself with other states in the zone.

There is indeed high potential for states in the CEMAC zone to attain the 5.5 percent growth as predicted by the IMF. The zone is not only blessed with oil production, but has other sectors which need to be exploited. If the CEMAC zone is really serious about attaining the predicted 5.5 percent growth and more, then it is time for a policy rethink and shift. Government leaders need to also concentrate more in encouraging trade between member states as well as revamping their various agricultural systems. Government leaders need to be serious about true privatization and free trade. There is also need for the corruption canker worm to be curbed. Only such measures may project the CEMAC zone to the 5.5 percent target .

 
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Posted by on June 7, 2014 in Africa Development

 

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A recap on the overall governance situation in the Central African region – Chofor Che – 27 December 2013


The Mo Ibrahim Foundation published its 2013 Ibrahim Index of African Governance (IIAG) in October 2013. Although this was the seventh year the IIAG has been published, it charts governance performance since 2000. This publication is timely especially as the continent celebrates 50 years of the founding of the Organisation of African Unity (OAU) now the African Union (AU). It is important for organisations like the Mo Foundation to make an assessment of the governance situation on the continent, especially as we have just two years away from for the target date of the attainment of the Millennium Development Goals (MDGs) slated for 2015. This contribution therefore reads into the IIAG and gives an analysis of the governance situation in countries in the Central African region. First of all it is vital for a general overview of the governance situation on the continent and indicators used in the IIAG.

The findings of the 2013 Ibrahim Index of African Governance show that there have been some improvements across the African continent. 94 percent of people residing in Africa reside in a country that has made some improvements in governance since 2000. Eight states out of the continent’s fifty-two states performed well in the 2003 report. Nonetheless there are still humongous challenges to thrash especially in the allocation of financial and natural resources. In as much as there have been some improvement in indicators used by the IIAG such as Human Development; Sustainable Economic Opportunity; Participation and Human Rights, there has been a serious decline in an important indicator such as Safety and the Rule of law.

It is thus important to give an assessment of the overall governance situation in the Central African region according to indicators outlined in the IIAG. While states such as Mauritius, Botswana and Cape Verde are ranked 1st, 2nd and 3rd respectively, states in the Central African region ranked amongst the states on the continent with the poorest governance record. Gabon is ranked 24th, Cameroon is ranked 35th Congo Brazzaville is ranked 43rd, Equatorial Guinea is ranked 45th, Chad is ranked 48th, the Central African Republic is ranked 49th and the Democratic Republic of Congo is 51st. This is a clear indication that states in the Central African region continue to perform poorly with respect to Safety and the Rule of Law; Participation and human rights; Sustainable Economic Opportunity and Human Development.

Many pessimists may question the indicators utilized in the IIAG report, but if the same trends keep on repeating in other reports especially like the African Economic Outlook and the Doing Business Reports then there is a serious problem which African leaders need to address. Addressing the issue of governance needs a holistic approach which should include fighting corruption, improving on infrastructure, creating employment conditions for women and children by adequately revamping the private sector and speeding up the continent’s industrialisation process. Serious importance has to also be given to the deteriorating situation of Safety and the Rule of Law especially in the Central African region. States like the Central African Republic are plunged into a serious armed conflict and apparently this conflict is spilling over into neighboring states like Cameroon. If the deteriorating situation in the Central African region is not turned around especially in the Central African Republic by the African Union, the United Nations and other regional and international organisations, then this could signal an era where we shall see an increase spilling over not only in the Central African region but in Africa.

– See more at: http://africanliberty.org/content/recap-overall-governance-situation-central-african-region-chofor-che#sthash.IAsclYV7.dpuf

 
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Posted by on December 27, 2013 in Africa Development

 

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