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Fiscal Imbalances, Debt Sustainability and Macroeconomic Challenges in Sub-Saharan Africa: A Diagnosis of CEMAC Countries (2012-2022)

Using revised 2012-2022 government data from the six CEMAC economies, this paper provides a comprehensive analysis of how persistent fiscal imbalances, coupled with challenging macroeconomic conditions, have exacerbated economic vulnerabilities in CEMAC countries. Evidence from the data highlights that overall fiscal deficits and current account imbalances were highly correlated on average over the period, underscoring the presence of twin deficits. Additionally, these dynamics have adversely impacted public debt levels and constrained the implementation of critical policy reforms. The CEMAC zone shifted from an environment of fiscal surpluses, high GDP growth, a low debt-to-GDP ratio, and foreign inflows to one characterised by persistent fiscal deficits, subdued growth, a higher debt-to-GDP ratio, and net FDI outflows on average between 2012 and 2022. CEMAC countries must pursue greater fiscal consolidation to reinforce their internal and external macroeconomic fundamentals: (i) Shrinking the primary fiscal deficit will alleviate fiscal pressure on outstanding debt, rebuild fiscal buffers, and provide greater flexibility to stimulate growth through increased capital spending; (ii) Stabilising the domestic balance will support the resolution of external imbalances and strengthen the macroeconomic environment, enabling it to meet emerging challenges and implement structural reforms sustainably.