Int'l financial market: Gov’t raises 335 billion FCFA to settle internal debts, strengthen economy.

The money was raised within just three days in London. According to the Minister of Finance, Louis Paul Motaze, the mad rush for the bonds demonstrates Cameroon’s attractiveness and credibility on the financial markets. 

Minister Motaze, it should be said, is head of the government delegation to London. They are said to be finalising the fundraiser through bonds.

In a release issued on July 31, Minister Motaze disclosed that the bond was issued on the high instructions of the Head of State, Paul Biya. 

He specified that “despite the volatile market conditions, the confidence shown by international financial markets, once again demonstrates Cameroon’s credibility and ability to mobilise the investor community to finance the National Development Strategy”.

The member of government explained that the money raised “will significantly contribute to clearing domestic debts, boosting SME activities, strengthening economic growth, enhancing private sector confidence in the State and improving business climate”.

Minister Motaze mentioned in the release that the transaction was completed in London on July 31, following a series of negotiations with a group of investors as well as rating agencies that began on July 29. 

According to reports, Minister Motaze met with officials from the rating agencies Fitch, Standard & Poors and Moody’s. 

The encounters were to update the agencies with relevant information on the development of the Cameroonian economy and enable them improve their perception of Cameroon’s credit risk.

Reports also add that the minister equally met with two groups of major investors who had announced their firm's intention to take part in the fundraising. 

Among the participants was Eaton Vance, a subsidiary of Morgan Stanley’s investment fund.

Minister Motaze also assured the investors of Yaounde’s ability to honour its commitments on time. 

He additionally spoke at length about the sustainability of the country’s public debt, which stands at 43% of Cameroon’s Gross Domestic Product, GDP. 

This, the MINFI boss indicated, is well below the 70% ceiling set by the Economic Community of Central African States, CEMAC.

He also highlighted the diversification and resilience of the economy, and the launch of a number of major development projects that should support growth.

Context of credibility

Amid fears, economists have saluted the context within which Cameroon is recording such high confidence from investors on the global financial market.

They cite the close to seven years crisis in the North West and South West Regions and Boko Haram terrorist attacks in the Far North Region that have threatened the economy.

There is also the influx of refugees from neighbouring countries such as Nigeria and the Central African Republic, CAR, that have also increased the burden on the country’s resources.

The same holds for Internally Displaced Persons, IDPs, of the Anglophone crisis on whom government has spent billions.

The Russia-Ukraine war that has caused a sharp rise in freight transportation across the globe and disrupting the supply chain, is another challenge. 

Locally, it has resulted in an increase in the cost of production for most companies.

As if that is not enough, the prospects of peace in the Middle East have continued to elude the predictions of enthusiasts, further putting the world, especially financial markets, in constant instability. 

This story was first published in The Guardian Post issue N0:3187 of Friday August 02, 2024