Leocadia Bongben
10 October 2008
An Economist cum Lecturer at the University of Yaounde II, Prof. Fondoh Sikod, has said the current world financial crisis could stir indirect repercussions on the countries of the Central African Economic and Monetary Community, CEMAC.
He appreciated the crisis within the framework of preparations by the 15 Finance Ministers of the franc zone for the upcoming General Assembly of the International Monetary Fund and the World Bank with the issue of the financial crisis top on the agenda.
The effects of the crisis may be felt if 'industries cannot get loans or credits. This means it would affect production and there would be scarcity. Buyers would consequently be priced out of the market,' Sikot said.In the same vein, Finance Ministers think that the financial crisis could downplay assistance to developing countries and could have a negative effect on the economies.
Linking the financial crisis to the franc zone with the peculiarity that the FCFA is linked to the French Treasury, Prof. Sikot said it has the strength to shield the economies of the franc zone.
The economist traced the genesis of the global crisis to mortgages in the United States whereby houses were sold on credit and people have not been able to pay back, thus leading to the collapse of the stock market. This has led to the uncertainty of lending with limited money to finance businesses.
He said the impact may not be felt directly as developing economies are structured differently from the traditional market economies. The banks in Cameroon, for example, have stocks of money but are reluctant to give loans without collaterals, which is different from what obtains in developed economies.
Evaluating the health of the CEMAC economies, he said the economies have not been doing well because of the structural adjustment programme and governance issues. Development indicators in the monetary union are worrying following figures from the IMF estimating mass growth at 3.5 percent and the gross domestic product per person at 321 dollars.
These are getting worse with high unemployment and poverty, he said. However, finance ministers think there has been progress from about 4.5 percent to 6 percent in 2007.
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