Optimal Monetary Zone and Economic Growth: Case of the CEMAC Countries (CHAD, CAMEROON, CENTRAL AFRICAN REPUBLIC, GABON, EQUATORIAL GUINEA, CONGO BRAZZAVILLE)

This article examines the relationship between a monetary zone and the economic growth of its member countries in Central Africa. The countries are Cameroon, Gabon, and Congo-Brazzaville, as well as the Central African Republic, Chad, and Congo-Brazzaville. Little research has been devoted to the link between optimal monetary zones and economic growth. Our methodology is hypothetico-deductive. Initially, it draws on the theory of Robert Mundell (1961) [1], which defines optimality in terms of labor mobility. His theory evolved considerably thereafter. Our study covers the period from 1960 to 2022. Our variables are household consumption, public consumption, investment, savings, exports, imports, external debt, the population aged 15 to 65, the real interest rate, the money supply, GDP, the price index, and the real exchange rate, all of which are from the World Bank, except for employment (UNCTAD). We established five equations relating the endogenous variables (money supply, real interest rate, and real exchange rate) to the other exogenous variables. We used cointegration models. The effect of a double cointegration relationship of rank two, as determined by the Johansen method, will allow us to determine whether the studied variables influence each other reciprocally in the long term. Granger causality analysis shows how one variable can be explained by another. We processed the statistical data of the different variables of the models using the EViews econometrics software. Our econometric results show that this relationship remains contradictory due to the lack of regular time series for the CEMAC region, caused by political crises, etc. We cannot reject our central hypothesis that there is a correlation between monetary policy and economic growth. Despite the statistical data, economic growth in the CEMAC monetary zone is not uniform. Some member countries, such as Equatorial Guinea, the Republic of the Congo, and Gabon, have experienced periods of strong and sustained growth, while others, such as the Central African Republic, Chad, and Cameroon, have experienced periods of imbalance.