You have just published an essay which questions the failing governance of the Bank of Central African States. What motivated the production of this work, the title of which is “To get the BEAC out of its failing governance. Promote a central bank ensuring the general interest”?
One of the triggers for this essay is the observation of the weakness of the information disseminated on the BEAC, a sub-regional public institution, both by its leaders and by the press which does not have easy access to the managers of this institution strongly impregnated with a culture of secrecy.
I started writing it at the end of January 2022, particularly in view of the articles published in the Cameroonian press during this period, sometimes in different newspapers on the same day, and repeated on social networks. Some of their headlines, often on the front page, were: Discord over extension of director’s mandate; The interim ring; Carelessness alert, we must save the BEAC.
It seemed necessary to me to contribute to the deepening of the debate by going beyond what seems to emerge from the news items, especially at a time when the central bank was rather supposed to be working to propose, with the Commission of the Economic Community and Central African Monetary Fund (CEMAC), “within reasonable time frames, an appropriate plan, leading to the evolution of the common currency”. This resolution of the extraordinary summit of CEMAC Heads of State seemed to have fallen into oblivion.
Furthermore, the book helps to develop the history of central banks, a recent discipline, alongside that of other public and private institutions. The point of view that he brings, more pointed because based on direct experience, in the wake of the essay by my colleague Mahamat Massoud, published in 2010 with the title “the Bank of Central African States, a drift predictable”, is extremely rare.
You are writing this book after having worked 35 years at the BEAC. Why did you choose the end of your career, or even your retirement, to do it?
Better late than never. In connection with what I said previously, in this atmosphere of maintained silence, it became urgent to generate discussions on the evolution of this institution whose proper functioning would promote higher and more harmonious economic development. And then, being active, I had to devote most of my official working time to it and beyond. It is important to add that most of the mechanisms for consultation and exchange between central and national management, as well as with staff, have been put on hold.
To illustrate this last point, meetings between central services and national directorates have been stopped since 2018, the general commission and the joint commissions, communication structures between managers and staff, are not functional, with rules for designating staff representatives seriously deviating from the principles of labor law.
You present a deplorable face to the BEAC. However, this central bank fulfills its missions, namely to conduct monetary policy, manage foreign exchange reserves, promote and ensure the proper functioning of payment and settlement systems, among others. In addition, the BEAC’s result is 114 billion CFA francs in 2023 compared to 49.8 billion a year earlier. How do you explain the contrast between these results and the description you give of this institution?
First of all, the BEAC, like all central banks, must fulfill its assigned objectives by respecting a certain number of principles. The independence granted to it must be exercised in transparency, with an obligation to account and respect for ethics prescribing in particular fairness and impartiality. Nowadays, when diversity and social inclusion are values proclaimed by our political leaders, it is appropriate to establish a permanent review of the functioning of public institutions.
Regarding its missions, an important function, recorded in its statutes, is also, without compromising the primary objective of price and exchange stability, to support economic policies in its member countries. This support, among others, in the form of advice and technical assistance, including in matters of public finances, does not seem to be adequately continued, with the quality of public spending generally insufficient. Overall, CEMAC countries are among the last in the world in terms of economic and social performance as well as governance. What weight does the level of BEAC profit have in the face of massive underemployment in the population when efforts to reduce the cost of credit are not very visible?
How to get out of this governance that you describe as failing?
The current governance system of the BEAC, presented in its statutes, is the result of institutional reforms undertaken between 2006 and 2009, notably following the scandal of embezzlement of funds noted in 2009 at its Paris office. The significant flaws noted since May 2022 in the organization and publication of the results of the senior executive recruitment competition show the need for a profound reform of this system. This observation should be compared with the observation established by the Committee of Ministers of the Economic Union of Central Africa, on October 30, 2023, following an audit report on the functioning of the Commission of CEMAC, on the extreme seriousness and extent of the abuses revealed. This CEMAC body, comprising the ministers of finance and the economy, recommended “the extension of audits to all CEMAC institutions”.
The drastic revision of the governance of the central bank must be inspired by best international practices if we want to maintain its credibility, especially from the perspective of its administration by its member countries alone. It requires effective autonomy, vis-à-vis the States, of the members of the management, supervision and control bodies of the issuing institution, in this case the government of the Bank, the Board of Directors , the Audit Committee and the Monetary Policy Committee. This will mainly result from the method of designation of these personalities and their real obligation to report.
We must in fact abandon the direct attribution of leadership positions in the BEAC and other CEMAC institutions. This requirement is consistent with the principles of global governance in our countries where public contracts and jobs must be allocated following a transparent procedure requiring in particular a call for applications. More specifically, the list of three people presented by each country, according to methods unknown to the common citizens of the sub-region, without intervention in the selection of these candidates, from an independent recruitment firm, with a world reputation, does not cannot ensure the choice of a senior manager with indisputable competence and integrity.
In your book under suggest the lifting of the currently existing barrier concerning the designation as the first person responsible for the nationals of the country of the headquarters of the CEMAC institutions, for example a Cameroonian governor at the BEAC…
Indeed, if the system of governance of community institutions, after its essential prior reform, ensures their good management and efficiency, with transparency, accountability, probity and fairness, this opening would make it possible to benefit from all the intelligence of the sub-region, without exception, in the conduct of said institutions and organizations. So, for example, Cameroon, which accounts for almost half of the CEMAC population, should also see one of its nationals head the common central bank. This is in line with the demand of African countries to obtain the appointment of their citizens at the head of the Bretton Woods institutions.
You also mentioned the question of the CFA Franc in your work. You seemed to say that the behavior of BEAC leaders makes it difficult to leave the FCFA zone. In your work. You seemed to say that the behavior of the Beac leaders makes it difficult to leave the said zone. Can you tell us a little more?
The question of the FCFA was mainly addressed by me only in its dimension of emancipation from the franc zone. The theme of the conditions for abandoning the link with France, the new monetary regime, its organization, the institutional framework for managing the new currency being very vast, deserves to be examined by a Committee whose creation I recommended . This committee would notably include, alongside representatives of States, experts of international reputation, from the sub-region and elsewhere.
The reluctance to move forward on the path to true monetary sovereignty shows the limits of the independence of the BEAC leaders and their lack of will on this subject. However, the theoretical work relating to it exists and demonstrates the capacities of the economists of our countries and other experts to develop the diagrams necessary for the construction of a currency specific to the sub-region before eventually moving gradually towards a continental currency. . With Kako Nubukpo we can see that the comfort brought by low-cost imports provided by membership in the franc zone dissuades the elites of this set of initiatives of which they do not take the time to measure all the risks.
