By Dr. Salim Ahmed Vessah
As traditional development assistance faces growing constraints amid geopolitical competition, fiscal pressures, and shifting donor priorities, countries of the Economic and Monetary Community of Central Africa are increasingly compelled to explore alternative pathways for financing sustainable development.
The End of a Model : Between Declining Aid and Economic Fragility
In 2025, the member states of the Economic and Monetary Community of Central Africa (CEMAC) raised nearly $9.4 billion on the regional debt market in Douala. This record level reflects a quiet yet profound shift: the region is now seeking to compensate for the gradual erosion of international aid through alternative financing sources. The global context is clear. Official development assistance declined by 6% in real terms in 2024, before falling by more than 23% between 2024 and 2025. Concurrently, flows to Sub-Saharan Africa dropped by more than a quarter in a single year. This sharp contraction is structurally reshaping the financing options available to African economies.
For CEMAC, this profound transformation is occurring amid persistent vulnerability. Regional growth, estimated at around 3% in 2024, remains too weak to generate a meaningful improvement in living standards, with per capita income virtually stagnant (+0.2%). Moreover, fiscal balances have deteriorated significantly, moving from a surplus of 0.6% of GDP in 2023 to a deficit of approximately 1.5% in 2024. Public revenues are capped at 18.2% of GDP, compared with expenditures close to 19.7%.
In this context, the combined dependence on aid and extractive resources is becoming increasingly unsustainable. CEMAC is no longer facing a temporary constraint but rather the exhaustion of a development model. This shift is not unique to Central Africa. In West Africa, several economies have accelerated their use of domestic markets, while emerging countries such as Indonesia and Mexico are focusing on broadening their tax base and mobilizing national capital. CEMAC is therefore part of a broader global transformation in development financing models.
Financial Constraints: Debt, Weak Revenues and Limited Markets
Rising debt pressures significantly exacerbate this fragility. The regional debt-to-GDP ratio is approximately 53%, with some countries exceeding critical thresholds. Debt servicing absorbs an increasing share of public budgets, limiting investment capacity in social and productive sectors. Access to financial markets is necessary yet constrained. The shallow Central African Stock Exchange (BVMAC) has a market capitalization of around CFAF 1,710 billion (€2.6 billion), modest relative to the region’s financing needs. However, the recent dynamism of the bond market, reflected in record issuances, shows room for progress. Recent sovereign issuances in Cameroon and Gabon, for example, have attracted growing demand, though often at high borrowing costs, reflecting persistent risk perceptions.
Provided that transparency, regulatory stability, and governance quality are improved, these markets could become a key pillar of regional financing. Yet, the central challenge remains the mobilization of domestic resources. With low tax revenue, CEMAC countries rely heavily on oil revenues. This dependence makes public finances vulnerable to external shocks and hinders stable budget planning. In an international environment characterized by rising interest rates and increased investor selectivity, this structural weakness is a major constraint.
Diversifying Financing in a Fragmented World
Tightened fiscal space prompts a key question : How can development be financed amid increasing uncertainty and reduced concessionality? Diversifying financing sources is critical. Traditional flows are being supplemented by new actors and instruments. Global diaspora remittances exceeded $860 billion in 2023, with $669 billion going to low- and middle-income countries. Sub-Saharan Africa received nearly $49 billion. However, in CEMAC, these funds largely go to consumption, not productive investment. Instruments like diaspora bonds and dedicated investment funds could leverage this resource.
Simultaneously, financing geopolitics are shifting. China, Gulf countries, and other emerging economies increasingly join traditional partners. This diversification offers opportunities but adds complexity. Faster financing may come with implicit trade-offs, like natural resource access or contractual dependencies. Innovative mechanisms, especially blended finance, are growing. Yet, the region lacks the capacity to structure bankable, credible projects aligning with international standards, which is necessary to access these instruments.
Finally, climate finance presents a major opportunity. The Congo Basin, the world’s second-largest tropical rainforest, gives the region a strategic advantage in environmental negotiations. Carbon markets and ecosystem preservation financing could generate significant revenue, but robust institutional capacity is needed to mobilize this resource.
Rethinking Priorities: Integration, Governance and Transformation
Beyond financial instruments, the development model itself must be reconsidered. The persistent weakness of intra-regional trade in CEMAC limits economic attractiveness and resilience to external shocks. In a fragmented world, regional integration is no longer a secondary option but a strategic necessity. A more integrated regional market would attract greater investment, generate economies of scale, and strengthen collective bargaining power. However, significant challenges remain, including inadequate infrastructure, non-tariff barriers, and limited political coordination.
Moreover, governance is a central issue. As capital becomes increasingly demanding, institutional credibility has become a key determinant of access to financing. Transparency, predictability, and policy effectiveness are no longer merely normative goals, they are conditions for accessing capital. Finally, structural transformation is essential. Without diversification, gradual industrialization, and substantial investment in human capital, no financing strategy will yield sustainable results.
Strategic Priorities for CEMAC
Against this backdrop, several strategic priorities clearly emerge:
- First, broadening the tax base is essential, notably through reducing exemptions, improving taxation of the informal sector, and gradually integrating the digital economy.
- Second, developing a deeper and more liquid regional financial market is a key lever for reducing dependence on external financing.
- Third, strengthening the capacity to structure bankable projects, particularly through public–private partnerships is critical to attracting private capital.
- Fourth, mobilizing the diaspora through dedicated instruments, such as diaspora bonds or targeted investment funds, could provide a stable and strategic source of financing.
- Finally, accelerating regional integration remains essential to expand market size, improve competitiveness, and enhance investor attractiveness.
Conclusion
CEMAC faces a demanding equation: increasing financing sources but facing increasingly complex access conditions. In a fragmented world, CEMAC struggles with both resource shortages and excessive uncertainty. The real shift will be strategic, not solely financial: transforming constraint into leverage, and moving from an aid-dependent model to a more autonomous, resilient, and sovereign economy. The question is no longer how to secure resources, but how to define a long-term trajectory.
