Gov´t borrows 49B FCFA, uses 40B FCFA to service debts.

Renowned for its solvency since the establishment of this market nearly 13 years ago, Cameroon used its usual borrowing strategy to make this repayment.

To this end, two new issuances of Fungible Treasury Bills, BTA were carried out on April 15, two days before the repayment date. 

These issuances, consisting of securities with maturities of 26 weeks for 40 billion FCFA and 52 weeks for 25 billion FCFA, raised 49.4 billion FCFA from investors. 

This sum not only covered the due repayment but also generated a cash surplus of 10 billion FCFA for the government.

The report added that the interest rates applied in these operations reflected the increasing tension in the market, which has seen its requirements rise over the months. 

The rise is said to be due to a restrictive monetary policy being implemented by BEAC. 

Therefore, the government offered an average interest rate of 6.3% on the 26-week BTAs and 6.5% on the 52-week ones. 

The rates are significantly higher than the 3% ceiling commonly practiced by the State treasury on these securities a few years ago.

It would be recalled that early in the year, President Biya signed decree no. 2024/043 of 02 February 2024 to authorise the Minister of Finance to issue government securities intended for the financing of development projects. It is included in the 2024 Finance Law.

Also, the International Monetary Fund, IMF disclosed that, during the fourth review under its Extended Credit Facility and the Extended Fund Facility Arrangements, the government in Yaounde requested for waiver for Non-observance of Performance Criterion and Modification of Performance Criteria. 

Though the IMF Executive Director in its publication of 10 July, 2023, asserted that Cameroon’s economic recovery continued in 2022, despite continued fragility and strong external headwinds. 

Gross Domestic Product, GDP, estimated at 3.8 percent in 2022, up from 3.4 percent in late 2022, with the agro industry and service sectors remaining vibrant. 

However, stubbornly high inflation in advanced markets has kept interest rates high, which has continued to dampen investment and growth.

The IMF also claimed that inflation pressures are subsiding with the easing of global pressures, but risks remain. Announcing that headline inflation stood at 7.3 percent at the end of 2022 year-over-year, up from 3.5 percent at end-2021. 

While domestic food prices have been the main drivers, non-food and non-energy prices have also increased.

World food and fertilizer prices and supply chain constraints have eased, but risks remain from a potential lagged global food price passed through to domestic prices. 

Just as the Fund´s estimates indicate that over three million people in Cameroon were severely food-insecure between January and May 2023, a 5 percent increase compared to the same period in 2022.