CI-NEWS

Why the Briscam Freedom Party believes that the future of the Southern Cameroons /Ambazonia is in th

2019-08-16

No: 441

Why the Briscam Freedom Party believes that the future of the Southern Cameroons /Ambazonia is in the ECOZONE.

The Heads of State of Ecowas met recently and decided that a new single currency to be known as the ECO shall be introduced in Ecowas in 2020. What this means is that the Naira, the Cedi and the West African FCFA XOF, shall disappear to be replaced by the ECO.

However some dissident views have already been expressed by President Macky Sall of Senegal and President Alassane Ouattara of Cote d'Ivoire who are reluctant to sever their links with France and the French Treasury.

What this means is that there will probably be a two-speed monetary union by which CFA countries from Cote d'Ivoire to Senegal (Ecozone/West) will implement the new single currency at one speed while countries from Ghana to Nigeria (Eco zone/East) will implement the new currency at another speed.

But the question is what is going to happen to the CEMAC Franc Zone. The answer is blowing in the wind because no one knows. Indeed the entire zone seems to be drifting towards collapse.

Cameroon which has the largest economy in terms of GDP is in deep trouble. The signs are as follows:

°Cameroon is in state of armed conflict with English speaking Cameroons which wants to break away to form a separate country called Ambazonia. This part of Cameroon accounts for around 60% of Cameroon’s GDP. Indeed the former West Cameroon which joined the Franc Zone in 1962 has complained about marginalization. Even though with a land area of only 44,000km2 and around 30% of the population, its resources enabled it to contribute around 60% of the GDP after Cameroon became an oil-producing country in 1977.

The people of Southern Cameroons have complained that although the English speaking population was larger than the combined population of Congo, Gabon and Car, the inscriptions on the CEMAC currency have always been exclusively in French. No one has ever provided any explanation for this except that it was another indication of flagrant marginalisation of Anglophones in the CEMAC monetary area.

The people of Southern Cameroons have further complained about language discrimination because no Anglophones have ever been employed by BEAC or BDEAC. They were simply shut out for language reasons notwithstanding the contribution of their region to the entire economy.

°One of Cameroon's most important companies is a petroleum refinery (Sonara) whose petrochemical complex recently went up in flames with no hope of repair or reactivation in the foreseeable future. The result is that Cameroon now has to import petroleum products at a very high cost in terms of its foreign reserves held by the French Treasury. In the event of a sudden increase in the international price of oil, the cost of petroleum imports will increase in tandem. The interesting aspect of the Sonara tragedy is that most of the loans were owed to the Cameroonian subsidiary of BGFI, the Gabonese bank. It is difficult to see how the loans which were unsecured can be repaid as long as Sonara is no longer a going concern.

°Cameroon has borrowed huge sums of money from the Export Import Bank of China directing it into infrastructure required to host the CAN2021 games. However, it is likely that Cameroon will again lose the hosting rights to the CAN2019 games because of uncertainties over its state of preparation including the likelihood that it may not count on being able to use the Victoria stadium which is in the Anglophone conflict zone.

°Cameroon also borrowed huge sums of money from the Export Import Bank of China for projects such as the Kribi Deep-sea port in anticipation of the development of the Mballam iron ore project which is expected to result in the export of 36 million MT of DSO (Direct Shipping Ore) per year. But the likelihood is that Cameroon will soon default on loan payments to China leaving the Chinese no choice but to seize the Kribi Deep-sea port as compensation. The Chinese will also seize the Douala-Yaounde Expressway and install tollgates to recover their money.

While Ecowas can transition from FCFA, Naira and Cedis to ECO by building the relatively more solid economies of Nigeria, Ghana, Cote d'Ivoire and Senegal and the political stability which they have known as a result to democratic transition from one regime to another, none of the countries in the CEMAC region offers either the economic strength or a similar history of democratic turnover.

In 2016 President Buhari of Nigeria allowed the Naira to float, enabling the exchange rate of the Naira to decline from 150 Naira /$ to 360 Naira /$. This represented a more than 200?valuation of the Naira.

But the CEMAC and UEMOA countries continued to maintain the exchange parity fixed by the French Treasury of at 655FCFA/€ where it has been since 1994. The result is that there is a 200?valuation gap between the Naira and the FCFA. This is a totally artificial exchange rate which does not reflect market forces or the economic fundamentals of the two franc zones. The Operations Account Convention guarantees the convertibility at that parity rate.

The proposed introduction of the ECO in 2020 will force the UEMOA countries to fix a more market related exchange rate for the FCFA XOF before all the ECOWAS countries can join the ECOZONE. That will require that BCEAO should devalue the FCFA from 655FCFA/€ to around 1200FCFA/€ in order to narrow the devaluation gap.

But there will be pressure to devalue the CEMAC CFA XAF to a greater level from 655FCFA/€ to around 1500FCFA/€. This is because the maintenance of the devaluation gap of 200% since 2016 between the FCFA and the Naira has resulted in a more rapid depletion in the exchange reserves of CEMAC countries than for UEMOA countries.

The problem is that the devaluation of the XAF and the XOF is likely to create major political and social repercussions in all the Franc Zone countries in UEMOA as well as CEMAC and that can generate political and economic upheaval that will lead to the collapse of some countries which have been living beyond their means on salaries and wages which were not justified by economic productivity.

A country like Cameroon is particularly vulnerable because the government is involved in a costly armed conflict with separatists in Southern Cameroons /Ambazonia and it is incapable of winning the war or stopping it. But in the end the government will be forced to give up because France will prefer to hold on to French Cameroun and allow Southern Cameroons /Ambazonia to become independent than to try to continue the war and cause uncontrollable economic and monetary chaos.

When Southern Cameroons /Ambazonia breaks away from French Cameroun, the logical course of action shall be to negotiate entry into the ECOZONE /East in order to have access to the entire ECOWAS market from Calabar to Dakar.

Dr. Nfor N Susungi

Chairman

Briscam Freedom Party

Ombudsman for National Security.

A PHP Error was encountered

A PHP Error was encountered

Why the Briscam Freedom Party believes that the future of the Southern Cameroons /Ambazonia is in th