Study Says BEAC Needs Emergency Liquidity Tool for Geopolitical Shocks

The Bank of Central African States (BEAC) should create an emergency liquidity facility worth CFA1.7 trillion to CFA2.3 trillion to protect financing for essential imports during global geopolitical shocks, according to a new study.

The proposed facility would finance critical imports such as food, fuel, and pharmaceuticals during periods of severe international disruption.

The suggested size of the fund corresponds to the $3 billion to $4 billion recommended by the authors, or roughly 2% to 3% of the Central African Economic and Monetary Community’s (CEMAC) gross domestic product. The CFA franc equivalent is approximate and depends on the exchange rate used.

The proposal is not a BEAC initiative and has not been announced by the central bank. It comes from a study by Arnold Foko Kengne of the University of Dschang and Fabrice Ewolo Bitoto, a researcher affiliated with the SARChI-ID Chair at the University of Johannesburg. Their paper, Building Macroeconomic Resilience in CEMAC: Strategic Policy Responses to Geopolitical Uncertainty in a Multipolar World, was presented on July 10, 2026, during the African Economic Conference’s Young Professionals Research Session in Abidjan. The version reviewed does not indicate that the study has yet been published in a peer-reviewed academic journal.

A tipping point for imports

The researchers analyzed monthly data from January 1987 through June 2025 for the six CEMAC countries—Cameroon, the Republic of the Congo, Gabon, Equatorial Guinea, the Central African Republic, and Chad.

Their analysis examines how geopolitical tensions affect inflation, exports, imports, and the real exchange rate. The study relies in part on the Global Geopolitical Risk (GPR) Index developed by economists Dario Caldara and Matteo Iacoviello. The index measures geopolitical risk based on the frequency of newspaper articles covering wars, military threats, diplomatic tensions, and terrorist attacks.

A GPR reading of 150 is neither a probability nor an official BEAC threshold. Instead, the authors identify it as the point where geopolitical tensions begin to have a much stronger impact on regional trade.

Their model shows that higher geopolitical risk generally reduces both imports and exports across CEMAC. However, imports appear relatively resilient until the GPR approaches 150, partly because the region depends heavily on essential intermediate goods, particularly refined petroleum products that are not produced in sufficient quantities locally.

Beyond that level, the researchers expect imports to decline much more sharply as supply chains are disrupted, trade restrictions increase, and financing conditions tighten.

Such a shock could create supply shortages and fuel imported inflation. The study also identifies a GPR range between 100 and 150 where inflationary pressures become increasingly difficult to contain as supply chains weaken, import costs rise, and inflation expectations deteriorate.

An emergency facility for essential imports

To reduce the risk of payment disruptions during major international crises, the researchers propose creating a Geopolitical Emergency Liquidity Facility.

The mechanism would automatically be activated whenever the GPR reaches or exceeds 150. Its resources would be reserved primarily for financing imports of food, energy products, and pharmaceuticals under simplified disbursement procedures.

The proposed fund, estimated at $3 billion to $4 billion, would not guarantee the physical availability of imported goods if ports, shipping routes, or trade corridors were disrupted. Instead, its purpose would be to ensure that governments and businesses continue to have access to the foreign currency needed to pay for essential imports.

The study also recommends a three-tier monitoring system. A GPR below 100 would correspond to normal surveillance. Between 100 and 150, the BEAC would strengthen monitoring and could begin preventive measures. Above 150, the central bank would enter crisis mode, with daily monitoring and emergency interventions.

Key questions remain unanswered

The proposal remains largely conceptual. The study does not explain where the funding would come from, whether through BEAC foreign exchange reserves, contributions from member states, regional borrowing, multilateral financing, or a combination of those sources.

It also leaves unanswered questions about eligibility rules, how funds would be allocated among member countries, collateral requirements, the role of commercial banks, oversight of eligible imports, and how such a facility would fit within the BEAC’s reserve management framework.

The use of a media-based global risk index as an automatic trigger also raises practical questions. The study does not specify how long the threshold would need to be exceeded before activation, which institution would officially declare that condition met, or how temporary spikes in geopolitical tensions would be distinguished from more lasting crises.

The authors also acknowledge that the thresholds identified from historical data could evolve as CEMAC’s economic and institutional landscape changes. In addition, the index combines different types of geopolitical risks—including armed conflicts, trade disputes, and diplomatic crises—even though their economic effects may vary depending on their nature and proximity to the region.

Cameroon seen as relatively more resilient

For Cameroon, the region’s largest economy, the study offers a relatively more favorable assessment than for oil-dependent economies such as Chad and Equatorial Guinea.

The researchers argue that Cameroon’s more diversified economy gives it greater resilience to geopolitical shocks. Even so, they note that the country would still face higher import costs and regional supply chain disruptions during major international crises.

Rather than presenting a ready-to-launch mechanism, the study outlines a possible policy direction for the BEAC. Any implementation would still require decisions on financing, governance, and activation rules. More broadly, the authors argue that the central bank should incorporate geopolitical risk more explicitly into its macroeconomic surveillance to better protect the financing of strategic imports.

Baudouin Enama