After saluting Cameroon’s economic performance: IMF doles out another financial package.

This was after an IMF delegation led by Cemile Sancak as Chief of Mission, left the country. The delegation was in Cameroon from April 25 to May 8. 

The members of the IMF delegation met and exchanged with some key government officials, including Prime Minister, Head of Government, Dr Joseph Dion Ngute; Finance Minister, Louis Paul Motaze; the Director of the Bank of Central African States, BEAC, Emmanuel Nkoa Ayissi; among others.

The mission also met with representatives of development partners, the diplomatic community, the private sector, and civil society, before giving the pass mark.

In a release signed recently, Sancak said the successful completion of the reviews had enabled the disbursement under the Extended Credit Facility, ECF, and the Extended Fund Facility, EFF, arrangements of 73.0 million US Dollars.

The second strand under the climate change reserve fund, RSF arrangement stands at 45.6 million USD. Both disbursements amount to approximately over 72 billion FCFA. 

Cameroon on good footing 

The IMF remarked that the Cameroonian authorities are making good progress on their structural reform agenda. 

It went on to caution that meeting the ambitious objectives of the National Development Strategy (SND30) for 2020-30, will require stepping up these efforts, especially those that would create fiscal space for infrastructure investment while maintaining debt sustainability. 

The IMF also emphasised that reforms are needed to support a deep structural transformation of the economy, including to improve the business climate for the private sector. 

The mission encouraged the authorities’ efforts to strengthen the performance and financial management of public enterprises, complete technical studies related to the restructuring of the burnt down National Oil Refining Company, SONARA, and strengthen the anti-corruption framework. 

Even more, the IMF lauded government’s effort in tackling other emerging challenges, especially as they relate to environmental protection.

“The authorities recognise the need to strengthen Cameroon’s resilience to climate change. Under the RSF, the government has intensified its efforts to improve the climate policy framework. Work is well advanced on the initial reform measures that entail adoption of an order establishing the institutional framework for the coordination of the climate agenda, and publication of a project selection procedure manual that integrates criteria relating to climate change,” the IMF stated. 

The release by the Chief of Mission to Cameroon further pointed out that: “Work is ongoing on a series of important reform measures, including a national climate plan, a national strategy for disaster risk financing, climate-related public investment management, and in the governance and sustainability of the forestry sector”.

At the end of their last visit, the IMF issued a release stating that it had reached Staff-Level Agreement with Cameroon on the First Review of Resilience and Sustainability Facility and Sixth Reviews of Extended Credit Facility and Extended Fund Facility.

Economy bouncing back

The experts asserted that Cameroon’s economic recovery continued in 2023 with overall economic growth estimated at 3.3 percent, which is expected to increase to 3.9 percent in 2024. 

Inflation moderated to 5.9 percent at end-2023, with a continued decline to 5.5 percent expected by end-2024.

Overall performance, they stated, remained broadly on track, even though further efforts are needed to accelerate the reform agenda in public financial management, foster structural transformation, and advance adaptation and mitigation efforts.

“Preliminary data indicate that Cameroon’s post-COVID-19 recovery continued since 2021, with overall growth of 3.3 percent. This is lower than the 3.6 percent realized in 2022 and the previous growth forecast of 4 percent in 2023 due to a combination of external and internal factors, including supply chain and energy disruptions and a contraction in domestic oil production. Inflation subsided from 7.3 percent at the end 2022 to 5.9 percent at end 2023,” states the IMF.

The fund gave assurance that fiscal developments were broadly in line with their programme objectives, with the non-oil primary deficit improving to stand at 2.6 percent of GDP in 2023 from 3.9 percent in 2022. 

“However, effective public financial management remains a persistent challenge, with substantial extra-budgetary expenditure in 2023. This translated in overruns on current spending, and the non-oil primary deficit target under the program was missed by a small margin. The current spending overrun also constrained resources for priority, pro-growth investment, underlining the need to redouble efforts to strengthen budget integrity and execution,” the IMF underlined. 

The mission clarified that the authorities intend to introduce a revised 2024 budget to limit expenditures executed through treasury advances and adopt a plan to clear domestic arrears, among others. 

This story was first published in The Guardian Post issue No 3138 of Tuesday June 11, 2024