The African Energy Chamber (AEC) said the “new restrictive foreign exchange regulations” of the Bank of Central African States (BEAC) are a threat to foreign investment flows in the region.
In the World Bank’s 2020 Doing Business ranking, six countries in the Economic and Monetary Community of Central Africa (CEMAC) are in “the worst positions,” said Leoncio Amada Nze, president of the CEMAC region for the African Energy Chamber (AEC).
These are Cameroon (167th), Gabon (168th), Equatorial Guinea (178th), Congo (180th), Chad (182nd), and Central African Republic (184th) out of 190 countries.
“This image must change or we will never get out of the crisis that is decimating our economies,” Mr Nze argued during the CEMAC Energy and Business Forum held in Brazzaville, Congo, on 30 November.
According to the president of the CEMAC region for the African Chamber of Energy, fiscal policies in Central Africa, “the worst” on the continent, do not allow for investment of internal and external resources.
For this expert, “CEMAC needs to be reformed..it is no longer competitive. Leaders must drop their ego and listen to businesses and citizens. Our tax rates are very high. We need to make it easier for investors to invest in Africa. Unless significant steps are taken to improve the ease of doing business, the region will continue to see a reduction in investment.”
NJ Ayuk, executive chairman of the African Energy Chamber, said that “BEAC forex regulations are killing the energy sector, businesses, and local economies, more than foreign companies, by increasing the cost of doing business.”
Faced with this situation, Leoncio Amada Nze said that the financial institutions of CEMAC must be “at the service of growth aspirations,” because he assured, “the current financial situation cannot bring the region to where it needs to be in terms of economic development to create jobs because the banking sector is almost absent.”
BEAC is imposing stricter rules on currency transfers and payments.
This measure is aimed, according to the financial institution, at protecting the region’s dwindling foreign exchange reserves.
But African energy industry leaders and stakeholders say the new regulations “discourage investment and hinder private sector growth by increasing transaction and operating costs and limiting access to foreign financing for local companies.”
In Central Africa, oil and gas activities account for 70-75 percent of Gross Domestic Product.
By adopting new regulations, BEAC is making the sector “particularly vulnerable” and “struggling to attract new foreign investment.”
ID/lb/as/APA