January 22, 2020. IMF Executive Board Completes Fifth Review of the Extended Credit Facility Arrangement for Cameroon.
- Cameroon to receive the sixth US$76.1 million disbursement from the IMF.
- Program implementation in 2019 was mixed and faced challenges.
- Despite short-term headwinds, the medium-term growth outlook remains broadly positive.
The Executive Board of the International Monetary Fund (IMF) today
completed the fifth review of the arrangement under the Extended Credit
Facility (ECF) for Cameroon. The completion of the review enables the
disbursement of SDR55.2 million (about US$76.1 million), bringing total
disbursements under the arrangement to SDR427.8 million (about US$590
The Executive Board also approved the authorities’ request for a waiver of
nonobservance of the continuous performance criteria on the
non-accumulation of new external payments arrears, based on the corrective
actions taken by the authorities.
Cameroon’s three-year arrangement was approved on June 26, 2017 for SDR 483
million (about US$666.1 million, or 175 percent of Cameroon’s quota— see
Press Release No.17/248
The arrangement aims at supporting the country’s efforts to restore
external and fiscal sustainability and to lay the foundations for a more
sustainable, inclusive and private sector-led growth.
Following the Executive Board discussion, Mr. Mitsuhiro Furusawa, Deputy
Managing Director and Acting Chair, made the following statement:
« Cameroon’s performance under the ECF-supported program has been mixed. All
end-June 2019 performance criteria have been met but four out of the five
indicative targets for end-June were missed. Structural reforms are
advancing but with delays.
« Cameroon is supporting the CEMAC’s regional external and financial
stability through fiscal consolidation and enforcement of foreign exchange
regulations. It will be important to also fully align the new Petroleum
Code with the BEAC’s foreign exchange regulation.
« Staying the course on fiscal consolidation is essential for building fiscal
and external buffers. The authorities are encouraged to broaden the non-oil
revenue base, reduce discretionary tax exemptions, combat tax fraud and
evasion, and enhance tax and customs administration. Completion of the
Treasury Single Account reform and reduced recourse to direct interventions
and exceptional spending procedures will help improve cash management and
budget execution and strengthen fiscal transparency and budget credibility.
« Urgently addressing financial and fiscal risks associated with the National
Oil Refinery (SONARA) is critical. SONARA’s corporate restructuring should
be based on a thorough cost-benefit analysis of all available options. The
planned audits of four large state-owned enterprises (SOEs) and the
clearance of government cross-debts with state-owned enterprises and of
government arrears will help mitigate contingent risks.
« Cameroon is at high risk of debt distress. To safeguard debt
sustainability, it is important to strictly adhere to the disbursement plan
for contracted-but-undisbursed loans and to limit nonconcessional borrowing
to macrocritical projects for which concessional financing is not
« Enhancing the business climate and governance is key to promoting private
sector-led and inclusive growth. Bold actions must be taken to strengthen
contract enforcement, improve compliance with the Extractive Industry
Transparency Initiative (EITI) recommendations and AML/CFT standards,
reduce nonperforming loans, and resolve ailing banks. Further steps to
diversify the export base and enhance investment efficiency remain
essential to unlock Cameroon’s growth potential.
« Cameroon’s program continues to be supported by policies and reforms by the
regional institutions in the areas of foreign exchange regulation and
monetary policy and a recovery in regional net foreign assets that is
critical to the program’s success. »