US Congress moves to block IMF’s central Africa support amid oil fund dispute

Dakar — The US Congress has introduced legislation that could block IMF support for some Central African countries, in an effort to guard billions of dollars that oil companies must set aside for environmental restoration.

The bill highlights a standoff between foreign investors and Central African monetary authorities trying to enforce tighter capital controls on extractive industries to shore up depleted reserves.

Introduced by US Republican Representatives Bill Huizenga and Dan Meuser, the bill targets new regulations imposed by the Bank of Central African States (BEAC), the regional central bank, that require international oil companies to deposit the environmental restoration funds into BEAC-controlled accounts.

The funds, estimated at between 3-trillion and 6-trillion CFA francs ($5bn-$10bn) and presently held in foreign banks, have been set aside by oil companies operating in the region for future environmental cleanup once production ends.

Central African Economic and Monetary Community (CEMAC) member states want the funds moved to regional institutions to bolster their economies and foreign currency holdings.

The move, backed by the IMF and approved during an emergency summit of CEMAC heads of state in Yaounde in December 2024, is seen by regional governments as an important step in addressing economic fragility.

According to the BEAC’s March 2025 monetary policy report, the implementation is expected to take effect from May 1, in line with the summit’s resolutions, with penalties of as much as 150% of the restoration funds for non-compliance.

The BEAC has also suggested raising rates for repatriation to the region of other funds, including for extractive companies’ operational spending, currently set at 35%.

Perenco, a privately-held French oil company with significant operations across the region, said it was in negotiations with regional stakeholders to reach an agreement before the April 30 deadline.

“Perenco is already complying with the 35% repatriation of funds’ rule, and all regulations currently in place,” a spokesperson said.

Other oil companies in the region did not respond to requests for comment.

In Equatorial Guinea, the finance ministry has met Marathon Oil, Chevron, Kosmos Energy and Vaalco Energy to discuss the issue, said one source.

Depleting reserves

The six CEMAC members — Cameroon, Gabon, Chad, Equatorial Guinea, the Central African Republic and the Republic of Congo — share monetary policy, a currency, and the common BEAC central bank.

They have struggled to emerge from the Covid pandemic and other global shocks, leaving them short of foreign exchange reserves to cover imports and debt.

Cameroon’s President Paul Biya warned during the summit in December of “disastrous consequences” for the countries if urgent action was not taken to address their deteriorating net external reserves.

Critics, including the bill’s sponsors, argue the BEAC mandate risks undermining billions of dollars in US oil and gas investments across Central Africa.

“By refusing to clarify that these restoration funds will not count towards gross foreign exchange reserves, the IMF has misled the CEMAC member states and directly put tens of billions of dollars of international oil companies’ investment in the region at risk,” the bill states.

The bill also states that the funds are contractually restricted and designated for future environmental rehabilitation, and therefore should not be “readily available” or “controlled by monetary authorities to count towards foreign exchange reserves.

Under the proposed legislation, the US Treasury would be barred from supporting any IMF proposals involving CEMAC countries until the IMF publicly confirms such funds cannot be classified as gross foreign exchange reserves.

The move could restrict further approvals of IMF financial support for some countries in the region that rely heavily on the fund’s support, such as Cameroon and the Republic of Congo.

The IMF did not immediately respond to questions on the bill’s implications.

In a March report, the IMF highlighted serious concerns about the CEMAC region’s economy, warning that without corrective action some countries could face debt levels nearing 100% of GDP and dwindling reserves by 2029.

That could worsen liquidity issues and threaten the region's financial stability and repayment capacity, it said.

Reuters