IMF advises Beac to stop financing BDEAC

According to the International Monetary Fund (IMF), it is not up to a central bank to guarantee the financing of a development bank.

Therefore, the establishment of Bretton Woods in a press release published on 18 December 2019 recommended to the Bank of Central African States (Beac), to avoid entering into a new financing agreement with the Bank of Development of the Central African States (BDEAC).

The IMF, which had already recommended that Beac gradually reduce its commitment to BDEAC, also believes that, looking more closely at some public projects implemented by the BDEACcentral bank financing is similar to progress. disguised statute for the benefit of the Cemac sub-region. The financial institution argued that the legal advances that were in force within the Beac are prohibited today.

According to rumours, this recommendation of the IMF is presented in a context where Beac is forced to submit its intervention to BEDEAC for arbitration. The question was certainly the subject of an announcement on the agenda of the Extraordinary Council of Finance Ministers of the sub-region, but in the end it was not introduced during the proceedings because it was considered very complex, we learn. also.

Existing constraints

Note that Beac holds up to 33.4% in the share capital of BDEAC and, as such, presents itself as the bank's largest shareholder. In this position, the central bank had opted for investment, a current account of FCFA 240 billion. By the end of November 2019, it had already been able to add FCFA 120 billion to this account and BDEAC is still waiting for the rest of the funding. The Development Bank of the Central African States was to benefit from financing in the order of FCFA 150 billion from Beac.

It should be noted that the current account can only be reclaimed to the extent of Beac's free net worth. The central bank indicates that its free net worth at the end of September 2019 was only FCFA 140 billion and was already allocated to other financing objectives. It also specifies that BDEAC's financing needs related to the implementation of public projects should not be beyond the rate of 50% compared to the overall available coverage line which is FCFA 150 billion.

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