(Business in Cameroon) - During the 26-week fungible treasury bills issuance of Feburay 12, 2020, on BEAC’s debt market, Cameroon was unable to raise the XAF20 billion it was seeking.
According to the official release published by the Ministry of Finance, the country only raised XAF5.2 billion, slightly over the fourth of the amount it sought. This is the first time since the launch of the BEAC securities market that Cameroon is recording such poor performance.
This failure can first be explained by the mixed interest shown by money market investors in this operation. Indeed, contrary to the oversubscriptions of up to 500% recorded during Cameroon’s previous operations, that of 12 February 2020 resulted in a subscription rate of only 94.5%.
Indeed, the investors offered XAF18.9 billion. In view of the different interest rates demanded by investors, Cameroon kept only XAF5.2 billion.
The interest rates demanded varied between 2.4% and 3.5%, averaged to 2.7%.
This average interest rate is well above the 2.1% demanded by investors in that same market, for the same type of securities on January 8, 2020, during the very first operation of the Cameroonian State for the current fiscal year.
Brice R. Mbodiam