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Yaoundé - 15 August 2022 -
Economy

Cameroon: govt to increase debt level to 50% of GDP by 2025

Cameroon: govt to increase debt level to 50% of GDP by 2025
  • Comments   -   Tuesday, 19 July 2022 14:01

(Business in Cameroon) - The Cameroonian government plans to bring its debt level to 50% of GDP by 2025, compared to 45.1% at the end of May 2022. Until 2025, the debt level is expected to increase by only 4.3% of GDP.

According to the mid-term economic and budgetary programming document (2023-2025), Cameroon forecasts its nominal GDP to be CFA33,026 billion in 2025, meaning that to contain its debt level to 50% of GDP, the country will have to increase it by no more than CFA1,420 billion, or less than CFA400 billion per year. This will be a real challenge given that the public sector debt in the country grew by more than CFA4,000 billion between 2016 and 2020, from CFA6,000 billion to CFAF10,000 billion. In 2020 and 2021, public debt has increased by CFA512 billion and CFA1,026 billion, respectively.

To achieve its objective, Cameroon plans to focus on paying its debt on time and clearing all domestic arrears (outstanding debts, floating debts, unstructured debts, etc.). The country also relies on efficient resource mobilization through optimal programming of external drawings and public securities issues. Administrative measures such as compliance with the debt ceilings defined in the debt strategy and the obligation to refer to the National Public Debt Committee (CNDP) are planned to ease the process.

To date, Cameroon's public debt remains "sustainable”, with a high risk of debt distress. The government's ultimate objective is to reduce the risk of debt distress to a moderate or even low level in a few years to improve debt conditions (reduction of interest rates, increase in maturities, etc.). In addition to reducing the debt rate, the country also plans to gradually broaden the tax base and strengthen its capacity to mobilize export revenues through its import-substitution policy.

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