As a member state of the Central African Economic and Monetary Community (CEMAC), Cameroon's monetary policy is formulated and carried out by the Bank of Central African States (BEAC). The International Monetary Fund's 2000 Report on the Observance of Standards and Codes found that Cameroon, as a member state of BEAC, fully complied with the requirements of Principle 1 of this standard, "clarity of roles, responsibilities, and objectives," and partially complied with the requirements for "open process for formulating and reporting policy decisions," "public availability of information," and "accountability and assurances of integrity." The IMF's 2006 Financial Systems Stability Assessment for the CEMAC region, however, found that the BEAC had only limited transparency regarding monetary policy execution. The 2006 IMF report recommended broader involvement in the policy-making process, and suggested that clearly stated rules for implementation should be set forth. In addition, the IMF called for the creation of a monetary policy board drawn from member-state government appointees as well as the governor and vice-governor of the BEAC, with the governor serving as chair.

General Overview

As a member of the Central African Economic and Monetary Community (CEMAC), Cameroon's monetary policy is the responsibility of the Bank of Central African States (Banque des Etats de l'Afrique Centrale, BEAC). In a 2000 International Monetary Fund (IMF) Report on the Observance of Standards and Codes (ROSC) - Transparency of Monetary and Financial Policies module, the IMF found that Cameroon fully complied with regard to the transparency requirement of "clarity of roles, responsibilities, and objectives," and partially complied with the requirements for "open process for formulating and reporting policy decisions," "public availability of information," and "accountability and assurances of integrity."

The 2000 ROSC reported that the BEAC's statutes clearly define the institutional framework and objectives for monetary policy, as well as differentiating between its monetary and fiscal roles, and that these statutes are supported by CEMAC treaties. On the other hand, the monetary policy framework itself is only broadly defined in BEAC statutes. The ROSC also noted that BEAC has a number of publications that it makes available to the public, and that the BEAC statutes include at least a partial code of ethics. The ROSC noted that, whereas the BEAC considers transparency towards its member state governments to be important, transparency toward the public at large has been less of a priority.

In 2006, the IMF published a Financial Systems Stability Assessment (FSSA) for the CEMAC region. In this review, the IMF found that the BEAC had only limited transparency regarding monetary policy execution. Specifically, the report noted that "the governor of the BEAC decides on the use of instruments, at times without reference to clear rules, and transfers abroad have occasionally been subject to prior authorizations which are not contemplated in the exchange regulations" (p. 9). The IMF observed that the role assigned by statute to the BEAC governor is, perhaps, misleading, and that he might, in fact, wield greater influence than would appear at first glance. The IMF added that transparency suffers from the fact that there is no advance schedule for the monetary policy decision-making process and the assumptions that inform such decisions are not made public. Although a monetary policy council was officially created, with all members drawn from within the BEAC, it has not met in recent years. The 2006 IMF report recommended broader involvement in the policy-making process, and suggested that clearly stated rules for implementation should be set forth. In addition, the IMF called for the creation of a monetary policy board drawn from member-state government appointees as well as the governor and vice-governor of the BEAC, with the governor serving as chair. This would improve the credibility of monetary policy and permit some degree of administrative oversight.

According to the 2006 FSSA on CEMAC, the BEAC's monetary policy is conducted "in the context of a fixed exchange rate against the Euro" (p. 4). Although the BEAC is the official source of monetary policy for CEMAC states, the individual member governments retain the responsibility for managing their systemic liquidity. BEAC inefficiencies in implementing monetary policy have led to difficulties in coping with excess liquidity situations. In the 2006 FSSA, the IMF called for the BEAC to "introduce central bank bills to conduct liquidity management operations, strengthen its corporate governance and the transparency in monetary policy implementation, and raise the rate at which it conducts its liquidity absorbing operations at least to the level of the European Central Bank's policy rate" (p. 5). The IMF also suggested that the elimination of BEAC financing for CEMAC governments through the establishment of treasury bill markets in each of the CEMAC states. Also useful would be the creation of "a framework to assess the level of international reserves sufficient to absorb oil related shocks, and the resulting level of savings by the oil-producing states" (p. 5).

Cameroon does not subscribe to the IMF's Special Data Dissemination Standard (SDDS). Rather, it participates in the less rigorous General Data Dissemination System (GDDS). The IMF GDDS website provides not only access to the metadata posted by Cameroon, but also statements regarding Cameroon's plans for improvement in the area of data dissemination, quality, and other transparency issues. The BEAC has announced plans to, inter alia, reduce publication time lags for its monthly bulletins and statistical research publications, create a public-access website with links to its publications, and "update the bridge table between bank data and monetary statistics in order to adapt to the new format for monthly reporting by banks."

The Principles

Clarity of roles, responsibilities and objectives of central banks.

EN

The IMF's 2000 ROSC reported that the BEAC's roles, responsibilities, and objectives are clearly defined in the BEAC statutes, supported by treaty provisions of CEMAC. In the main, the requirements of this principle are fully observed, but the ROSC notes a deficiency in that "central bank involvement in the rest of the economy should be conducted in an open and public manner." The IMF's 2006 FSSA on CEMAC found that there was a discrepancy between the statutory roles defined for the BEAC governor and the actual nature of the governor's latitude of activity. The IMF added that transparency suffers from the fact that there is no advance schedule for the monetary policy decision-making process and the assumptions that inform such decisions are not made public.

Open process for formulating and reporting monetary policy decisions.

NC

The IMF's 2000 ROSC reported that the BEAC provided a broad-strokes definition of the monetary policy framework and process. In the words of the report, "policy changes are promptly communicated and clearly explained. Fundamental modifications are, in practice if not in law, preceded by consultations with the parties concerned." However, the 2000 ROSC suggested that there could be greater communication regarding policy framework and targets, and the BEAC could provide more thorough explanations of both general policy stance and the specific decisions that are implemented. The ROSC suggested that the BEAC also release a calendar of the bank's board meetings in advance and conduct more regular reviews of ongoing policy outcomes than the twice-per-year schedule currently followed. The ROSC noted that, whereas the BEAC considers transparency towards its member states governments to be important, transparency toward the public at large has been less of a priority.

In the 2006 FSSA, the IMF found that the BEAC had only limited transparency regarding monetary policy execution . The IMF added that transparency suffers from the fact that there is no advance schedule for the monetary policy decision-making process and the assumptions that inform such decisions are not made public. Although a monetary policy council was officially created, with all members drawn from within the BEAC, it has not met in recent years. The 2006 IMF report recommended broader involvement in the policy-making process, and suggested that clearly stated rules for implementation should be set forth. In addition, the IMF called for the creation of a monetary policy board drawn from member-state government appointees as well as the governor and vice-governor of the BEAC, with the governor serving as chair.

Public availability of information on monetary policy.

NC

According to the 2000 IMF ROSC, whereas the BEAC considers transparency towards its member states governments to be important, and ensures a high degree of transparency with regard to them, transparency toward the public at large has been less of a priority. The ROSC found that the BEAC publishes a range of materials on monetary policy, but that timeliness is an issue. The ROSC suggested that the BEAC adopt, and stick to, a regular schedule of deadlines for submission of information to be included in its monthly bulletin. It also recommended that the BEAC publish its accounting guidelines and send the governor to address parliamentary sessions in member states to provide explanations of monetary policy and achievements.

Cameroon does not subscribe to the IMF's SDDS. Rather, it participates in the less rigorous GDDS. The IMF GDDS website provides not only access to the metadata posted by Cameroon, but also statements regarding Cameroon's plans for improvement in the area of data dissemination, quality, and other transparency issues.

Accountability and assurances of integrity by the central bank.

EN

According to the IMF's 2000 ROSC, the BEAC partially complies with the requirements of this principle. The BEAC governor reports to the board of directors, as well as to the heads of state of the CEMAC and a ministerial committee. The BEAC submits to an internal audit of its financial statements. A portion of the BEAC's Code of Conduct is included in the BEAC statutes. The ROSC made some recommendations that would improve accountability, such as making more of its internal regulations publicly available. In addition, the member states participating in the BEAC could provide a degree of immunity to BEAC staff for actions and decisions arising from their official capacity. No more up-to-date information is publicly available.