BEAC (Bank of Central African States)

The BEAC (Banque des États de l'Afrique Centrale, or Bank of Central African States) acts as the common central bank for all six states that make up the Central African Economic and Monetary Community (CEMAC): Cameroon, the Central African Republic, Chad, the Republic of the Congo, Equatorial Guinea and Gabon. It issues the Central African CFA franc (ISO code XAF), conducts the region's monetary policy, holds its pooled foreign exchange reserves and administers the community's foreign exchange regulation.

The BEAC is headquartered in Yaoundé, Cameroon, and operates through a national directorate in each member state. For its institutional details, see the BEAC regulator profile.

The BEAC took its current name and form in 1972, succeeding an earlier issuing institution for French Equatorial Africa and Cameroon created around independence. Its headquarters moved from Paris to Yaoundé in the 1970s. Equatorial Guinea, a former Spanish colony, joined the zone in 1985. CEMAC itself was established by treaty in 1994, the same year the CFA franc was devalued by 50%, and it brings together the monetary union with an economic union intended to harmonize trade and regulation.

The XAF is pegged to the euro at 655.957 francs per euro, the same parity as the West African franc issued by the BCEAO. The two currencies are nonetheless distinct and not interchangeable. The French Treasury guarantees the convertibility of the XAF through an operations account arrangement, which in Central Africa has traditionally required a share of the BEAC's reserves to be held with the French Treasury. Reforms adopted for West Africa in 2019 and 2020 did not automatically apply to CEMAC, and arrangements for the Central African zone have been discussed separately.

The BEAC targets a minimum ratio of external reserves to its sight liabilities and monitors reserve adequacy, often expressed as months of import cover. Because the region depends heavily on oil exports, its reserves are sensitive to commodity prices. The oil price collapse of 2014 to 2016 sharply reduced reserves and led to regional adjustment programs supported by the International Monetary Fund.

Partly in response to that reserve pressure, CEMAC adopted a revised foreign exchange regulation in December 2018, applied with BEAC instructions from 2019. Its main features include:

• Mandatory repatriation and surrender to the banking system of export proceeds within set periods, an example of export proceeds repatriation.
• Documentary requirements for import payments and other outward transfers, with banks required to verify the underlying transaction.
• Restrictions on residents holding foreign currency accounts abroad without authorization.
• Reporting obligations on banks for foreign currency flows.

Extractive companies, which had long kept funds offshore, were brought within the regime under specific arrangements. Businesses and payment providers operating in the zone report that outward payments can be slow and document-heavy, and funds can become trapped capital if documentation is incomplete. The regime is a form of capital controls, even though convertibility into euros at the fixed parity is guaranteed.

Bank supervision is exercised by the Banking Commission of Central Africa (COBAC), for which the BEAC provides the secretariat. The BEAC operates the region's real-time gross settlement and clearing systems, and a regional interbank body works on card and mobile payment interoperability. The BEAC also regulates electronic money issuance and payment services, and mobile money has grown rapidly in Cameroon and other member states.

Debates about the BEAC mirror those surrounding the West African franc: whether the fixed peg and French guarantee provide valuable stability or limit growth and sovereignty. In Central Africa, additional concerns include dependence on oil, low intra-regional trade, and the impact of strict foreign exchange rules on investment and on cross-border payment costs.

• BEAC official website