CEMAC: the central bank recorded a 52% drop in its free net capital in 2018



(Business in Cameroon) – According to official documents obtained by the Ecofin Agency on the sidelines of the extraordinary summit of CEMAC heads of state, the free net equity of the Bank of Central African States (BEAC) has fallen by 52% in 2018.

Two main reasons are put forward to justify this situation. On the one hand, the BEAC, which plans to strengthen its existing cooperation with international financial players, has optimized the way it calculates its exposure to States. As a result of this optimization, the BEAC recorded a loss of CFAF 212 billion in receivables held on national funds. However, the vast majority of investments made by the institution have expired and the capital gains they generated are no longer available.

The institution’s 2019 financial results should provide more detail and clarification. But central bank officials believe that recovering free equity to its pre-2018 level remains quite difficult. This is due to the decline in income from foreign assets. In accordance with its statutes, the BEAC is required to invest in financial products with strong guarantees.

The challenge is that this type of financial product, located in developed markets, is in such demand by many investors that their returns have plummeted. For the institution, it is urgent to think about the question.

The Beac is always solicited by certain CEMAC institutions to resolve their funding problems. In addition, it should reassure states that it can effectively help them invest the excess on their net foreign assets.

Idriss Lingé



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