IMF fifth review mission underway in Yaounde.

The head of the visiting team, Senior Adviser at the IMF, Semile Sanka, told reporters after their audience with Finance Minister, Louis Paul Motaze, that their assignment has two prongs. 

She said they will begin with routine review of government activities under the programme as per article 4, which governs activities with all member states that are benefitting from Extended Credit Facility and the Extended Fund Facility arrangement under the guidance and supervision of the IMF.

In which case they will look at the global economic context within which government had operated since the previous review. They will also asses what improvements have been recorded or not; and whether previous shocks are being mastered or are ameliorating.

The delegation will also assess the extent to which trade in natural resources are impacting positively or negatively government development effort, and how these are impacting the wellbeing of Cameroonians.

During the fourth review, the experts projected that the rise in non-oil revenues will significantly influence economic growth in Cameroon during the current financial year. 

Their expert projection showed that growth that was estimated at 3.8% during the 2022 financial year, would peak to 4% in 2023, supported mainly by non-oil production.

For this reason, they sustained that reforms will be needed to create additional fiscal space for productive investment and social spending, while maintaining debt sustainability and boosting Cameroon’s growth and resilience.

The second aspect will focus on assessing the effectiveness of government’s reforms in different sectors. 

Particularly as it concerns internal revenue mobilisation effort; the level of transparency in the management of government finances; and development prospects in the medium and long term.

At the end of the fourth review, the IMF concluded that Cameroon is showing resilience in an uncertain domestic and global environment. 

The medium-term outlook remains positive, provided reforms continue and the external environment becomes more supportive. Real Growth Domestic Product, GDP, growth is expected to reach four percent in 2023 and to average 4.4 percent in the medium term. 

This improvement is driven by the agroindustry, forestry, and services sectors, as well as, Liquified Natural Gas, LNG, production, which is projected to partially offset declining oil output. Inflation is expected to return to below three percent in the medium term.

“Cameroon’s performance under the programme is mixed. The quantitative performance criterion on the accumulation of external arrears experienced further minor and temporary breaches in early 2023, and three of five indicative targets under the programme have been repeatedly missed. While structural reforms continue to be slow, the authorities have made welcome progress in some key areas, including governance and revenue administration. Continued implementation of corrective measures to address missed targets and accelerate reforms will be crucial,” IMF had noted.

The IMF also gave assurance that the Yaounde authorities are committed to maintaining a fiscal consolidation path consistent with programme objectives. “Additional room for productive investment and social spending can be created through efforts to increase domestic non-oil revenue mobilization, enhance investment efficiency, improve public financial management, and gradually phase out fuel subsidies, while mitigating the impact on the vulnerable. The authorities are also committed to limiting non-concessional financing and preventing accumulation of external and domestic arrears. Improving cash management and limiting spending through exceptional procedures will be important in this regard,” the experts stated.