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Yaoundé - 29 May 2020 -
Economy

Covid-19: Will Cameroon fulfill its plan to pay XAF1,011.9 bln of debt this year?

Covid-19: Will Cameroon fulfill its plan to pay XAF1,011.9 bln of debt this year?
  • Comments   -   Friday, 03 April 2020 13:45

(Business in Cameroon) - Cameroon planned to pay XAF1,011.9 billion of debt in the 2020 fiscal year, according to figures from the Ministry of Finance. This planned debt servicing includes XAF472.2 billion of external debts and XAF539.7 billion of domestic debts (of which 36% are public securities issued in the Beac market).

However, this plan may not be executed because of the coronavirus crisis affecting the world, and its loads of economic problems. According to experts, in Cameroon, the implementation of preventive measures could seriously affect public revenues.

Due to that, the Beac suggested member countries should amend their 2020 finance law to align them with more realistic revenue and expenditure forecasts, given the upheaval caused by Covid-19 in the socio-economic environment.

At the same time, at a meeting held on March 28, 2020, in Brazzaville, Congo, the Steering Committee of CEMAC's Economic and Financial Reform Programme, recommended that states should collectively negotiate and “obtain, for all member countries, the cancellation of all their external debts."

 All these suggestions prove that Cemac countries, Cameroon included, will face great difficulties in fulfilling their commitments towards fund providers this year. This is all the more plausible because, before the pandemic, the Minister of Finance had already estimated that till 2026, Cameroon would face “enormous difficulties” in servicing its debt on time.

Let’s note that, according to the Ministry of Finance, on December 31, 2019, Cameroon’s outstanding public and publicly guaranteed debt was XAF8,424 billion, representing 37.3% of GDP. At end-2015, it was estimated at XAF5,039 billion, i.e 30% of GDP.

Brice R. Mbodiam

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