(Business in Cameroon) - Cameroon signed eleven loan agreements with its financial partners this year, including the latest signed on September 25, 2020, for the second phase of the agriculture development program Padfa. The overall amount of the agreements is XAF416.5 billion, we learn.
According to the national sinking fund CAA, 81% of the agreements were for concessional loans while 19% were for non-concessional loans. This means that out of the XAF350 billion non-concessional loans approved by the 2020 finance law, the country still has a margin of XAF271 billion for the ongoing financial year. As for concessional loans, the amount raised this year is slightly up by XAF37.1 billion compared with the XAF300 billion cap.
Under the IMF’s definition, a loan is said to be concessional when its grant component (the difference between the face value of the loan and the sum of the discounted future debt service payments to be made by the borrower expressed as a percentage of the face value of the loan) is greater than or equal to 35%. This type of loan is encouraged by the IMF because it is considered less expensive, but is viewed with suspicion by sovereignists because of the conditions imposed for its obtention.