(Business in Cameroon) - The average cost of Cameroon's Treasury bond (OTA) issues on the Beac market stood at 7.2% in September 2023, according to the monthly stats bulletin released by the Central Securities Settlement and Registry (CRCT). This is the highest average cost on Cameroon's medium- and long-term securities since the Beac securities market was launched in 2011.

Indeed, for many years, as the Director-General of the Treasury at the Ministry of Finance, Sylvester Moh, liked to point out, "Cameroon was the only country south of the Sahara still borrowing at interest rates of less than 3% for short-term securities (BTA) and less than 7% for long-term securities (OTA)." However, since the end of 2022, the situation has changed. This is not only due to competition from other states offering more competitive interest rates but also because of the tightening of monetary policy by the BEAC.

To tackle surging inflation within the Cemac zone, Beac has tightened liquidity in the banking sector. This involved raising key interest rates, suspending liquidity injection operations, and intensifying withdrawals of liquidity from banks. This led to increased borrowing costs for both economic entities and governments. Consequently, Cameroon has readjusted its policy of conservative interest rates, adapting to the ever-changing dynamics of a market where it had encountered successive setbacks since the beginning of 2023.

According to CRCT, in September 2023, the average interest rate offered by Cameroon for its BTAs (Treasury Bills) surged to 5.67%, up from 5.40% in August, resulting in a general market average of 6.29%. By way of comparison, in June 2019, Cameroon's remuneration for the same securities was a mere 2.24%. This figure progressively increased to 3.11%, 1.98%, 2.38%, and 4.67% in June 2020, 2021, 2022, and 2023, respectively.

On OTAs (Treasury Bonds), Cameroon offered an average interest rate of 7.2% in September 2023. This represents a 100-basis point increase from the 6.2% average offered by the country between June 2019 and June 2023. Despite the uptick in interest rates, data from CRCT reveals that Cameroon remains the most cost-effective borrower in the Cemac sub-regional public securities market.