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Facing the fall in oil prices, Cameroon raises debt load to 900 billion FCFA

Facing the fall in oil prices, Cameroon raises debt load to 900 billion FCFA
  • Comments   -   Wednesday, 11 February 2015 06:51

(Business in Cameroon) - Instead of the initial 375 billion FCFA to be raised in 2015 by the Cameroonian Treasury Department, by issuing public securities on the capitals market, Cameroon has decided to aim for 900 billion FCFA that Cameroon will attempt to raise this year. The debt load was raised by presidential decree signed on February 6, 2015. The presidential decision has specified that this financing has to be raised through the Treasury’s issuance of bonds, which are long-term loan instruments.

This decision comes at a time of lower oil prices on the global market. Oil accounts for 20% of Cameroon’s budget and 40% of the country’s exports. According to the government’s forecasts, the current international oil situation is likely to leave the National Treasury short of 300 billion FCFA in 2015, while the country is undertaking several major investment projects which needed considerable financing.

The financing will be used to refinance Société nationale de raffinage (Sonara) and enable the financing of the three-year 925 billion FCFA emergency plan that the government will be officially launching this year to restart growth.

The Cameroon government’s activities on the capitals market comes at a time when the country has received a positive rating. “According to our forecasts, Cameroon’s real GDP growth is around 5.6% or 5.7% per annum from 2014 to 2017. This forecast is based on increasing oil production (…), improving energy supply for industrial sectors from the start of production at the Kribi gas plant in the second half of 2013,” highlighted S&P.

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