(Business in Cameroon) - On May 27, 2021, the IMF staff announced that they have reached an agreement with the Cameroonian government concerning the 3-year economic and financial program that will replace the one that ended in September 2020. “IMF staff completed policy discussions with the authorities on a new 36-month program that could be supported by IMF resources under the Extended Credit Facility (ECF) and the Extended Fund Facility (EFF),” the Bretton Woods institution wrote in an official release.

Cameroon has not yet fulfilled all the transparency commitments made in the framework of the Extended Credit Facility (ECF), thanks to which it received a XAF224 billion support to fight the coronavirus and its economic fallouts. For instance, the audit report on the management of Covid-19 is yet to be published. So, this release surprised several people.

“The government provided guarantees to our staff that things will be settled before the agreement is presented to the Executive Board. The staff can not possibly doubt the words of a whole government,” a source at the IMF commented. The latter added that the said agreement is subjected to the executive board’s approval, which is scheduled to meet in June 2021 (according to the national sinking fund CAA).

Amazement aside, the preliminary agreement provides a glimpse into the specificities of Cameroon’s new economic and financial agreement with the IMF. According to the May 27 release, apart from the Extended Credit Facility (ECF) aimed at helping beneficiary countries restore stability and ensure macroeconomic viability while maintaining sustainable growth, the country could benefit from the Extended Fund Facility (EFF).

2020-2030 National Development Strategy (SND30)

According to the IMF, the EFF is a mechanism under which the Bretton Woods Institution can provide support to countries experiencing medium-term balance of payment problems that could not be quickly addressed. “Compared to assistance provided under the Stand-by Arrangement, assistance under an extended arrangement features longer program engagement - to help countries implement medium-term structural reforms - and a longer repayment period,” it adds.

Specifically, based on the 2020-2030 National Development Strategy (SND30), the announced economic and financial program will focus on four pillars.

“The authorities’ medium-term program centers on post-Covid-19 recovery, macroeconomic sustainability, and an ambitious structural reform agenda—laid out in the National Development Strategy for 2020-30 (SND30). In this context, the IMF-supported program builds on the authorities’ SND-30, with a cross-cutting focus on reinforcing good governance, transparency, and anti-corruption measures. It will focus on four pillars (i) mitigating the consequences of the pandemic while ensuring macroeconomic sustainability; (ii) accelerating fiscal reforms to modernize tax and customs administration, mobilize revenue, improve public financial management, increase investment efficiency, and reduce fiscal risks from state-owned enterprises; (iii) strengthening debt sustainability and management; and (iv) intensifying structural reforms to boost economic diversification and financial sector resilience. IMF financial support is also expected to help stimulate private sector investment and catalyze additional financing from development partners,” the IMF release reads

To implement the new program that will cover the 2021-2023 period, Cameroon could obtain over XAF375 billion from the IMF, sources close to the case informed. That support is usually disbursed in tranches.

Brice R. Mbodiam