Rethinking Monetary Strategy in CEMAC: Assessing the Role of Franco-CEMAC Cooperation in Shaping Policy and Business Cycle Resilience Amidst Crisis and Uncertainty

Résumé

Over the past decade, external shocks have placed growing pressure on the monetary policy framework of the BEAC, which remains primarily focused on price stability as a result of its institutional cooperation with France. This paper examines how that cooperation has shaped the orientation and effectiveness of BEAC’s monetary policy, particularly its capacity to manage economic cycles and support macroeconomic resilience. Through an analysis of stylized facts and the estimation of a VAR model based on Cameroonian data, the study finds that this cooperation has progressively constrained BEAC’s policy flexibility. While monetary interventions have helped cushion short-term impacts of crises, their overall effect on cyclical stabilization remains limited, due to a partial, delayed, and nonlinear transmission mechanism. These structural constraints hinder countercyclical policy management and weaken the region’s resilience to shocks. The findings suggest that the current strategy is insufficient in the face of rising economic risks. A transition toward a more flexible policy framework, supported by credible inflation targeting and innovative tools, is necessary. However, such a shift also requires a broader rethinking of the institutional foundations of Franco-CEMAC cooperation, to allow for greater regional ownership and alignment of monetary policy with the region’s development objectives.