IMF Executive Board Approves US$ 689.5 Million Arrangements Under Extended Credit Facility and Extended Fund Facility for Cameroon

  • Cameroon’s ECF/EFF-supported program aims to support the authorities’ efforts to achieve a rapid post-COVID-19 recovery, restore the country’s fiscal and external sustainability and unlock inclusive and private sector-driven growth.
  • Urgently addressing financial and fiscal risks associated with SOEs remains a high priority and efforts to strengthen public debt management and limit non-concessional borrowing remain critical.
  • Steadfast commitment to strengthen transparency and good governance and reduce corruption risks will be crucial.
  • Washington, DC: On July 29, the Executive Board of the International Monetary Fund (IMF) approved three-year arrangements under theExtended Credit Facility(ECF) and theExtended Fund Facility(EFF) for Cameroon for SDR 483 million (about US$ 689.5 million, or 175 percent of Cameroon’s quota) to support the country’s economic and financial reform program.

    Approval of the ECF/EFF enables immediate disbursement of about US$ 177.2 million, usable for budget support. This follows Fund emergency support to Cameroon under the Rapid Credit Facility (RCF) totaling SDR 276 million, about US$ 382 million or 100 percent of Cameroon’s quota (seeIMF Press Release No. 20/205andIMF Press Release No. 20/318).

    Cameroon faces significant development challenges heightened by the pandemic. An upsurge in COVID-19 cases since January 2021, has raised concerns about growth prospects and the external and fiscal positions. Additionally, security risks in parts of the country persist. The pandemic could reverse improvements in poverty reduction and development outcomes and jeopardize the implementation of reforms.

    While economic activity decelerated markedly in 2020, the slowdown was less than anticipated, reflecting strong performance in the agricultural and construction sectors. The current account deficit narrowed to 3.7 percent of GDP, owing to both lower imports and higher than expected non-oil exports. Inflation remained below 3.0 percent. In addition, the authorities’ proactive management of the COVID-19 pandemic helped contain the fiscal deficit to 3.6 percent of GDP.

    The near-term outlook remains highly uncertain and critically depends on the authorities implementing policy commitments under the program. A gradual recovery could increase GDP growth to 3.6 percent in 2021 and 4.6 percent in 2022. Total public and external debt to GDP are projected to gradually decline after 2021. Medium-term growth prospects remain positive, driven by the implementation of National Development Strategy for 2020-30 (SND30), large infrastructure projects, and a recovery in trading partner economies.

    At the conclusion of the Executive Board’s discussion, Mr. Mitsuhiro Furusawa, Deputy Managing Director and Acting Chair, stated:

    “The COVID-19 pandemic has heightened Cameroon’s development challenges and has raised concerns about its growth prospects and external and fiscal positions. In this context, financing under the ECF and EFF arrangements would support the authorities’ efforts to achieve a rapid post-pandemic recovery, strengthen medium-term external and fiscal sustainability, and implement their structural reform agenda toward sustained, more inclusive, and diversified growth. Effective and resolute implementation of the authorities’ reforms, particularly to further strengthen transparency, good governance, and the anti-corruption framework, are essential to help catalyze additional donor financing.

    “The five pillars of the new program will seek to (i) mitigate the health, economic, and social consequences of the pandemic while ensuring domestic and external sustainability; (ii) reinforce good governance and strengthen transparency and the anti-corruption framework; (iii) accelerate structural fiscal reforms to modernize tax and customs administrations, mobilize revenue, improve public financial management, increase public investment efficiency, and reduce fiscal risks from state-owned enterprises; (iv) strengthen debt management and reduce debt vulnerabilities; and (v) implement structural reforms to accelerate economic diversification, boost financial sector resilience and inclusion, and promote gender equality and a greener economy.

    “The authorities have appropriately adopted a revised budget, with a larger deficit to accommodate the impact of the pandemic. They have reiterated their firm commitment to gradually return to the fiscal consolidation path to safeguard debt sustainability once the pandemic abates. The success of Cameroon’s program will also depend on the implementation of supportive policies and reforms by the CEMAC regional institutions.”

    Cameroon: Selected Economic and Financial Indicators, 2019–26

    (CFAF billion, unless otherwise indicated)

    2019

    2020

    2021

    2022

    2023

    2024

    2025

    2026

    Est.

    Proj.

    Proj.

    Proj.

    Proj.

    Proj.

    Proj.

    (Annual percentage change, unless otherwise indicated)

    National account and prices

    GDP at constant prices

    3,7

    -1,5

    3,6

    4,6

    4,9

    5,3

    5,4

    5,6

    Oil GDP at constant prices

    8,5

    2,6

    0,1

    0,1

    0,1

    0,1

    0,3

    0,5

    Non-Oil GDP at constant prices

    3,5

    -1,8

    3,8

    4,8

    5,2

    5,5

    5,6

    5,8

    GDP deflator

    2,5

    2,0

    2,0

    1,9

    2,0

    1,8

    2,1

    2,0

    Nominal GDP (at market prices, CFAF billions)

    22.855

    22.955

    24.265

    25.865

    27.687

    29.670

    31.922

    34.359

    Oil

    935

    663

    947

    887

    888

    889

    892

    897

    Non-Oil

    21.920

    22.292

    23.318

    24.977

    26.798

    28.780

    31.030

    33.462

    Consumer prices (average)

    2,5

    2,4

    2,3

    2,1

    2,0

    2,0

    2,0

    2,0

    Consumer prices (eop)

    2,4

    2,1

    2,1

    2,0

    2,0

    2,0

    2,0

    2,0

    Money and credit

    Broad money (M2)

    6,5

    12,1

    8,4

    8,2

    8,3

    9,0

    9,5

    7,6

    Net foreign assets 1/

    5,7

    -0,2

    2,6

    2,8

    2,7

    4,3

    5,0

    6,7

    Net domestic assets 1/

    0,8

    12,4

    5,8

    5,5

    5,6

    4,8

    4,5

    1,0

    Domestic credit to the private sector

    1,4

    1,1

    3,3

    4,9

    6,2

    7,4

    7,5

    7,7

    (Percent of GDP, unless otherwise indicated)

    Savings and investments

    Gross national savings

    26,1

    22,9

    24,9

    27,1

    28,6

    30,1

    31,7

    33,4

    Gross domestic investment

    30,4

    26,6

    28,9

    30,7

    32,0

    33,2

    34,6

    35,9

    Public investment

    7,0

    5,1

    5,6

    6,1

    6,3

    6,6

    6,8

    7,4

    Private investment

    23,4

    21,5

    23,3

    24,5

    25,6

    26,7

    27,8

    28,5

    Central government operations

    Total revenue (including grants)

    15,7

    13,7

    14,6

    15,5

    15,8

    16,4

    16,9

    17,5

    Oil revenue

    2,6

    1,9

    2,2

    2,1

    1,9

    1,7

    1,6

    1,4

    Non-oil revenue

    12,5

    11,7

    12,1

    13,0

    13,6

    14,3

    15,0

    15,8

    Non-oil revenue (percent of non-oil GDP)

    13,1

    12,0

    12,6

    13,4

    14,0

    14,7

    15,4

    16,2

    Total expenditure

    19,0

    17,0

    17,9

    18,0

    17,7

    18,0

    17,9

    18,6

    Overall fiscal balance (payment order basis)

    Excluding grants

    -3,9

    -3,4

    -3,7

    -2,9

    -2,2

    -2,0

    -1,3

    -1,4

    Including grants

    -3,3

    -3,3

    -3,4

    -2,5

    -1,8

    -1,6

    -0,9

    -1,1

    Overall fiscal balance (cash basis)

    Excluding grants

    -3,4

    -3,8

    -4,1

    -3,4

    -2,7

    -2,3

    -1,3

    -1,4

    Including grants

    -2,9

    -3,6

    -3,8

    -3,0

    -2,3

    -1,9

    -1,0

    -1,1

    Non-oil primary balance (payment basis, percent of non-oil GDP)

    -5,0

    -4,4

    -4,6

    -3,9

    -3,1

    -2,7

    -1,8

    -1,9

    External sector

    Trade balance

    -1,9

    -1,6

    -2,2

    -2,5

    -2,4

    -2,3

    -2,1

    -1,8

    Oil exports

    5,7

    3,6

    5,1

    4,6

    4,2

    4,0

    3,8

    3,7

    Non-oil rxports

    8,5

    8,0

    8,1

    8,2

    8,3

    8,4

    8,6

    8,7

    Imports

    16,1

    13,1

    15,3

    15,3

    14,9

    14,7

    14,5

    14,2

    Current account balance

    Excluding official grants

    -4,7

    -4,0

    -4,4

    -4,0

    -3,7

    -3,5

    -3,1

    -2,8

    Including official grants

    -4,3

    -3,7

    -4,0

    -3,5

    -3,4

    -3,2

    -2,8

    -2,5

    Terms of trade

    23,1

    -5,6

    -0,6

    -6,0

    -3,6

    -2,9

    -3,2

    -3,3

    Public debt

    Stock of public debt

    42,3

    45,8

    46,2

    45,6

    44,4

    43,1

    41,0

    39,2

    Of which: external debt

    29,9

    31,1

    32,3

    31,8

    31,3

    30,6

    29,9

    29,3

    Sources: Cameroonian authorities; and IMF staff estimates and projections using updated nominal GDP.

    1/ Percent of broad money at the beginning of the period.

    /Public Release. This material comes from the originating organization/author(s)and may be of a point-in-time nature, edited for clarity, style and length. The views and opinions expressed are those of the author(s).View in full here.