• (Business in Cameroon) – CEMAC credit rose 19.6% in 2024 to 12,670.1 bn CFA, driven by Cameroon.
• Loan growth defied BEAC rate hikes; bank rates fell, policy impact limited.
• Repo market use surged to 9,121.4 bn CFA as banks bypassed BEAC restrictions.
In its March 2025 Economic and Statistical Bulletin, published June 18, 2025, the Bank of Central African States (BEAC) disclosed that loans to the economy in the CEMAC zone grew by 19.6 percent year-on-year in 2024. This credit boom, totaling 12,670.1 billion CFA francs, was largely driven by Cameroon, which hosts nearly 40 percent of the sub-region’s banking network. It reflects a “sustained strengthening of regional economic activity, particularly in sectors such as industry and services,” the BEAC noted.
“From the analysis of credit trends by maturity, it appears that loans increased across various terms,” the central bank document further detailed. “During the period, medium-term loans rose by 19.4 percent, short-term loans by 19.7 percent, and long-term loans expanded by 21.2 percent. The contributions of short and medium-term loans to the expansion of banking credit to the economy were 11 points and 8.3 points respectively. Long-term loans had a marginal contribution of 0.3 points.“
In simpler terms, loan volumes in the CEMAC increased across all market segments throughout 2024. This trend mirrors that of 2023, when credit to the economy grew by 11.1 percent year-on-year. This reality raises questions about the effectiveness of the restrictive monetary policy implemented by the central bank between late 2021 and March 2025, which was officially aimed at combating soaring inflation in the CEMAC zone.
Key Interest Rate Hikes
The central bank sought to curb commercial bank liquidity by suspending liquidity injections into banks, which later resumed in June 2024. It also intensified liquidity withdrawals and repeatedly raised its main interest rates starting in late 2021, only to lower them again at the end of March 2025. The goal was to restrict access to credit by pushing interest rates upward.
Yet in practice, not only did credit volumes grow throughout 2023 and 2024, but bank interest rates in the CEMAC also declined. For instance, they dropped by 33 basis points year-on-year in the third quarter of 2024, falling from 9.78 percent to 9.45 percent, according to the BEAC. These two facts clearly indicate a lack of monetary policy transmission from the central bank to the real economy.
A Surge Toward the Interbank Market
Faced with tighter refinancing conditions from the central bank, commercial banks found an alternative by expanding the interbank market. This allowed them to lend to each other when necessary, leveraging the advantages offered by repurchase agreements, also known as repos, on the BEAC’s secondary market for public securities.
A repo is an interbank financing technique that involves exchanging negotiable securities for cash over a set period. The transaction requires a master agreement between the parties, allowing the lender to automatically acquire ownership of the securities used as collateral if the borrower fails to repay on time. “There is no need to go to court to obtain that transfer of ownership,” noted one frequent user of such operations.
Thanks to the security and transaction guarantees provided by this financing method, repos have surged across the CEMAC. They enable commercial banks to access liquidity from peers, bypassing the restrictive policies at the central bank’s refinancing window. Between 2023 and 2024, repo transactions in the CEMAC increased by approximately 4,000 billion CFA francs, rising from 5,263.4 billion in 2023 to 9,121.4 billion CFA francs by December 31, 2024, according to BEAC data.
Brice R. Mbodiam
