At joint meeting with World Bank in Morocco: IMF hails Cameroon’s implementation of economic, financial programme.

Reacting to the rating, the Minister of Finance, MINFI, Louis Paul Motaze, who led the Cameroonian delegation to the global gathering, expressed delight in the assessment.

He, however, said there is need for more work to guarantee the country’s stability amid multiple global shocks.

Cameroon on right track 

During meeting, Minister Motaze held a meeting with the Director of the IMF's Africa Department, Abebe Aemro Selassie. 

Aemro assessed the overall results of the three-year programme Cameroon signed with the IMF on July 29, 2021, which runs until mid-2024. 

According to the MINFI boss, his meeting with the IMF official unequivocally showed that Cameroon is on the right track.  

“To say the least, it results in relation to the programme's expectations are satisfactory. Everyone agrees that Cameroon has executed its programme well," Minister Motaze said.

He continued that: “Cameroon must continue to be disciplined, given the global and national economic context where, in addition to the global health crisis, COVID-19. The Russia-Ukraine war has the capacity of creating difficulties linked to the rise in oil prices”. 

The Minister of Finance said the situation would have forced him to increase subsidy on petroleum products, already in excess of 700 billion FCFA in 2022.

Shouldering amid constraints

At the local level, Motaze told the Bretton Woods officials that Cameroon is faced with budget-intensive security crises in certain regions, as well as the financing of investment projects and incompressible expenses like salaries. 

The minister stressed that in the face of these external and internal difficulties, Cameroon has demonstrated resilience, and as such, has received the IMF's congratulations. 

"Cameroon has performed well, but more needs to be done. The country also intends to pursue these efforts in the social sector in particular, by financing social safety nets, education, health and vocational training,” Motaze further unveiled.

Cameroon hope of CEMAC Sub-region

At the level of the Central African Economic and Monetary Community, CEMAC, Motaze said the IMF also recognizes Cameroon's leading role. 

"Cameroon is part of a whole. Before this meeting in Marrakech, we had a meeting with the IMF, and it was clear that the efforts made by Cameroon should also have been made by the other CEMAC member countries. In any case, if Cameroon stops its efforts now, it risks undermining the programme in the entire CEMAC zone," he detailed.

Louis Paul Motaze: Cameroon’s ingenious Finance Minister, during IMF meeting in Morocco 

Economic, financial programmes with IMF conclusive

To date, Motaze assured, all reviews of the economic and financial programme with the IMF have been conclusive. 

This, he said, has enabled Cameroon to disburse, as at the end of June this year, an amount of US$73.6 million; which is around 44.5 billion FCFA, as part of the 4th review of the IMF programme under the Extended Credit Facility and the Extended Fund Facility. 

He added that the last disbursement in June, brings Cameroon's total disbursement under the current IMF programme to 225.4 billion FCFA.

Cameroon in good standing with IMF 

Minister Motaze revealed that the IMF gave Yaounde a pass mark, asserting that Cameroon is in “good standing with regard to the expectations of the programme with the IMF".

The Minister of Finance also said when it comes to comparing Cameroon´s results with regard to the expectations of the programme, “I can say that we are in good standing, but Cameroon's economy isn't on an island. It belongs to the world. Right now, there are a number of shocks. As I always say, there are a series of crises. Except that they haven't come one after the other, they've piled up and hit at about the same time”. 

Israel-Palestine war could affect oil prices 

Using specific examples to buttress his claim, the member of government said: “We have a war in one part of the country, we have external crises like COVID-19. Right now, there's something I'm watching like a hawk, and that's what's happening in the Middle East”.

What happens in the Middle East, he situated, “can have an impact on the price of oil. You should understand that in the face of these crises, it was not possible for Cameroon, like all countries, to emerge unhurt. There are bound to be repercussions”.

Tax adjustments in view

As a strategy to face the looming challenges, the finance boss delved into details about tax adjustments to increase revenue collection.  

“The policy we're going to pursue is to increase the tax burden and to broaden the tax base. That's not to say that we're going to raise taxes. You have to understand that there are more people who are supposed to be paying taxes but are not doing so,” he revealed. 

Authorities, he said, “can increase the tax burden without necessarily making the same people pay the same taxes, but the same people pay taxes in their other businesses also”. 

The MINFI boss was clear that there are many people who are doing big businesses at customs but who were unknown and not included in the national tax file. 

“This is not normal. When we broaden the tax base, it's much more about taxing those who weren't taxed before, or whose alternative businesses were overlooked. It's not a question of making those who were already paying their taxes to pay more, but taxing those who weren't, and businesses not covered," he argued.

About economic & financial reforms programme

On July 29, 2021, the Executive Board of the International Monetary Fund, IMF, approved the disbursement of 689.5 million US dollars (over 427 billion FCFA), to Cameroon. This was under the Extended Credit Facility, ECF and the Extended Fund Facility, EFF.

The goal of the programme to end in mid-2024, is to ensure post-COVID-19 recovery, rejuvenate fiscal and external sustainability, promote inclusive and private sector growth, reduce corruption, enhance transparency, minimise financial risk, modernise the tax and customs administration.

The program also targets improving public finance management, reduce fiscal risks from state-owned enterprises, boost efficiency in public investment, strength debts management, diversify the economy, promote gender equality and green economy.