(Business in Cameroon) - The Board of the International Monetary Fund (IMF) approved, on 26 July 2017, a loan agreement for FCfa 390.4 billion (666 million dollars) for Cameroon. This loan, which is in line with the IMF Extended Credit Facility, will be spread over a period of 3 years, with a first immediate disbursement of slightly over FCfa 100 billion (171 million dollars), as part of the programme to restore financial viability and unlock growth in the private sector, we officially learned.

“After showing resilience due to a larger diversification, the Cameroonian economy is now facing a slowdown in its growth, a decline in customs and foreign revenues and a growing public debt”, declared the Deputy Managing Director of the IMF, Mitsuhiro Furusawa, commenting on the decision of the Board of this Bretton Woods institution.

Indeed, in addition to the drop in international prices for crude oil, which has a significant impact on the public finances of the six CEMAC countries, Cameroon has been involved for close to 3 years now in an expensive war against the Nigerian Islamist sect Boko Haram, whose crimes in the Far North region have already cost the lives of over 1,000 people, officially.

Coupled with the decline in non-oil revenues, mainly due to the entry into force of the Economic Partnership Agreements with the European Union in August 2016, and the slowdown in the national economy (projected growth rate of 3.7% in 2017, against 4.4% in 2016, according to the IMF); the two above-mentioned external factors put considerable pressure on public finances, forcing Cameroon to further indebtedness to fulfil its sovereign missions.

Through an order signed on 17 May 2017, the Head of State even had to increase the maximum debt limit of the country for the year 2017, moving it from FCfa 1,000 billion, initially to FCfa 1,700 billion; including FCfa 500 billion in concessional loans and FCfa 1,200 in mon-concessional lending. All of which, at the end of the year 2017, should increase by 2% the debt-GDP ratio of the country compared to the end of the year 2016, to raise it over 30%.

Incidentally, despite the fast rise of this indicator, local public authorities often deem it both satisfactory and sustainable, with regards to the convergence criteria in the CEMAC, which authorise each country in this community to contract a debt of up to 70% of its GDP.

Brice R. Mbodiam