2023 third quarter report: Autonomous Sinking Fund says debt payment, servicing gulp gov’t 896 BFCFA.

In hard currency, the ASF stated that the public treasury disbursed 208.7 million United States Dollars, USD to pay interest on loans and commissions during the period, an amount which analysts say is equivalent to not less that 83% of the entire cost of executing the Lom Pangar hydroelectric dam project.

The latter, with a reservoir whose water holding capacity is estimated at some 6 billion cubic meters, is currently recognised as the most strategically important energy infrastructure in Cameroon.

Further details on the expenditure on debt showed that 76.7% of the money spent represents the principal, estimated at approximately 687.3 billion FCFA, while the remaining 23.3% covers the interests and various commissions paid amounting to some 208.7 billion FCFA, averaging at 23.2 billion FCFA monthly payments.

In detail, 642.7 billion FCFA was used for the settlement of external debt, with 73% representing the principal. 

Here, the interests and commissions totalled 173.5 billion FCFA for the first nine months of 2023, averaging 19.2 billion FCFA monthly. The ASF noted that all deadlines for the external debt service were duly respected.

Moody’s and Standard & Poor's, two rated agencies, downgraded Cameroon’s sovereign rating in July 2023, citing delays in external debt settlements, which conveyed a negative signal for the country in the international capital markets.

According to the debt management body, government has not relented in meeting its debt obligations despite the rating.

Regarding domestic debt, the ASF report showed that Cameroon made repayments totalling 253.4 billion FCFA, with 216.3 billion FCFA for the principal, and 37.1 billion FCFA allocated to the payment of interests and commissions. 

The Autonomous Sinking Fund also noted that a major portion of this sum went to the public securities market, where Cameroon has become more active since 2019 in terms of fundraising. 

The structure added that the country's dynamism in this market justifies the 3.1% increase recorded in the central administration's direct debt by the end of September 2023.

The ASF further indicated that as at 30 September 2023, the outstanding debt of the public sector; central administration and state-owned enterprises in Cameroon combined, stands at around 12,510 billion FCFA. 

This outstanding debt corresponds to 43.9% of the country’s Gross Domestic Product, GDP, significantly below the 70% threshold recognised under the multilateral surveillance criteria set by the Central African Economic and Monetary Community, CEMAC.

Based on this data, government authorities argue that Cameroon's debt remains both sustainable and viable, despite the country being classified by the African Development Bank, AfDB as a country at high risk of over-indebtedness. 

This is supported by ASF data showing that over the 13 years from 2009 to 2022, Cameroon's public debt surged from 1,904 billion FCFA to 11,216 billion FCFA. This means the debt soared by 9,312 billion FCFA in 13 years, representing a 489% increase.

Managing Director of ASF, Adolphe Noah Ndongo told reporters that despite the downgrading of Cameroon by international rating agencies; financial players, both at national and international levels, continue to show interest in Cameroon. He stated that Cameroon remains committed to honouring its debt and other international obligations.

As part of this commitment, debt servicing for the last quarter of 2023 is pecked at 386.8 billion FCFA, made up of 306.4 billion FCFA for external debt and 80.4 billion FCFA for domestic debt payments, the ASF boss said.