The new rules from the Bank of Central African States (BEAC) state that all foreign currency transfers in excess of 1,680 dollars will be checked for bank approval
The African Energy Chamber (www.EnergyChamber.org) met interested parties from the oil industry to ask the Bank of Central African States (BEAC) to relax their rules controlling foreign currency adopted in June 2019.
Last year, the BEAC introduced new rules controlling the exchange flow in Central Africa, in an attempt to promote financial transparency and guarantee that oil income stayed within local economies and local banks. While the African Energy Chamber is continuing to support the management and distribution of solid, transparent income in the oil and gas industries, these specific rules have created an environment which is unattractive for foreign investors looking to invest in States of the Central African Monetary Union.
In particular, the new rules state that all foreign currency transfers above $ 1680 will be checked for approval by the BEAC, and that all export income above $ 8400 will be repatriated in 150 days to a local bank account. Unfortunately, such checks are causing delays in transactions and preventing foreign investors from repatriating income from their investments, which is a key condition in any jurisdiction for attractive investment. With these established checks and rules, CEMAC will suffer and will become less attractive to credible investors.
Gabriel Mbega Obiang Lima, Minister for Mines and Hydrocarbons in Equatorial Guinea, reacted quickly and described the measures as lethal for the local oil and gas industry, stating that they could destroy economies and make attracting investment impossible, “Local and regional companies will suffer and the oil sector will see a reduction in investment. Given the current scenario of historically low oil prices and the COVID-19 pandemic, the Chamber is making an urgent call to the BEAC to listen to the voices and concerns of the industry and relax the foreign currency checks in order to keep the region attractive as an investment destination”.
“The FX Regulations adopted in June 2019 make it very difficult for our companies to compete and create employment, and make our business environment less attractive for foreign investors. Given the worsening of the economic forecast for the region in the light of COVID-19, the industry needs urgent measures to relax these FX Regulations”, declared the Minister.
Following the launch of the Common Sense Agenda for African Energy, the Chamber believes that reforms to the business environments in Africa should be a priority for all regulators and all central banks, in order to guarantee speedy economic recovery and to make the African continent more competitive globally.
Source: Equatorial Guinea Press and Information Office