By 
The African Energy Chamber (AEC) has joined oil industry stakeholders in calling on the Bank of Central African States (BEAC) to relax its currency controls rules adopted in June 2019.
Last year, the BEAC introduced new rules controlling the flows of currency in Central Africa in a bid to promote financial transparency and ensure that oil revenues stay within local economies and local banks.
While the Chamber continues to support sound and transparent revenue management and distribution across the oil & gas industry, these specific rules have created a very unattractive environment for foreign investors seeking to invest in CFA union states.
The new rules notably state that all foreign exchange transfers over $1,680 be vetted for approval by the bank and that all export proceeds above $8,400 be repatriated in 150 days to a local bank account.
Unfortunately, such controls are causing transaction delays and preventing foreign investors to repatriate proceeds from their investment, which is a key condition of any attractive investment jurisdiction.
With such controls and rules in place, CEMAC will suffer and becomes less attractive to credible investors.
H.E. Gabriel Mbaga Obiang Lima, Minister of Mines and Hydrocarbons of Equatorial Guinea, had quickly reacted and called the measures deadly for the local oil & gas industry, stating that they could destroy economies and make it impossible to attract investments.
Local and regional entrepreneurs will suffer and the oil sector will see a decline in investment.
Given the current scenario of historic low oil prices and COVID-19 pandemic, the Chamber is urgently calling on the BEAC to listen to industry voices and concerns and relax such currency controls to maintain the region’s attractiveness as an investment destination.
“The FX Regulations adopted in June 2019 make it very difficult for our companies to compete and create employment, and render our business environment very unattractive for foreign investors. Given the worsening of the region’s economic outlook in light of the COVID-19, the industry needs urgent action on the relaxing of these FX Regulations,” declared H.E. Gabriel Mbaga Obiang Lima, Minister of Mines and Hydrocarbons.
Following the release of Africa’s Energy Common-sense Agenda this week, the Chamber believes that reforming business environments across Africa should be a priority for every regulator and all central banks, in order to ensure swift economic recovery and make the continent more competitive on the global stage.
The Bank of Central African States (French: Banque des États de l’Afrique Centrale, BEAC) is a central bank that serves six central African countries which form the Economic and Monetary Community of Central Africa:
The Central African Economic and Monetary Community (CEMAC) is made up of six States: Gabon, Cameroon, the Central African Republic (CAR), Chad, the Republic of the Congo and Equatorial Guinea. With a total population of about 37 million, it covers a total surface of around 3 million km2. Together with the larger Economic Community of Central African States (ECCAS) and the mainly inactive Economic Community of Great Lake Countries (CEPGL), CEMAC presents one of the Central African regional Communities established to promote cooperation and exchange among its members.
Source: African Energy Chamber
Comments