Cemac questioned on the recurrence of its "excessive indebtedness”

(Agence Ecofin) - The president of the Economic Community of Central African States (CEMAC), Pierre Moussa, presented on23 July in Yaoundé, Cameroon, a report entitled “budgetary transparency and strengthening of the multilateral monitoring system within CEMAC”.
This document drafted by the Foundation for International Development Study and Research (FERDI), notes that the criteria and current indicators used for multilateral supervision of budgetary policies of the CEMAC members states (budget balance, indebtedness, arrears, inflation…) adopted in 2001 are neither “easy to calculate” nor “non-manipulable and readily available”. Worse, they are not "defined in such a way as to have their monitoring enable the assessment of the long term viability of public finances and their impact on the state of the economy as well as on growth and real convergence potential of economies in the long term” and “have difficulty taking into account the heterogeneity of the CEMAC countries”. Hence the necessity to reform them.
The Ferdi firm emphasised that, up until now, the states of the Community were bound to have an outstanding public debt inferior or equal to 70% of nominal GDP. However, if this criterion is well respected today, it is because it “does not impose any restraint following the cancellations of debt”. Since then, Ferdi argues, “it allows recurrent excessive indebtedness”.
Therefore, the Foundation proposes, in addition to lowering the ceiling of the nominal debt stock from 70% of GDP down to 60%, to combine the criteria of debt cap with that "of rise in debt”.