(Business in Cameroon) - Only 59.3% of the bonds issued by Cameroon on October 21, 2020 (on the CEMAC money market), were subscribed, according to internal sources at the Ministry of Finance.

Out of the XAF35 billion it was seeking, it was able to raise only XAF20 billion via the issuance of 10-year bonds backed by a 7% interest rate. Despite the amount being below the volume sought, officials of the Cameroonian public treasury are satisfied because of the specificities of long-term borrowings.  "Let’s note that such amount raised with an interest rate of 7% is a remarkable achievement for securities maturing in 10 years. Usually, primary dealers’ outlooks are limited to five or six years. They don’t have enough data to make projections beyond these periods so they don’t take many risks,” a source close to the case at the Ministry of Finance explains.

Cameroon, therefore, concludes its second bond issuance for this quarter (fourth quarter), after the October 7, 2020, issuance. During the October 7, 2020, operation, the country was successful in raising the XAF35 billion it was seeking via the issuance of 7-year bonds backed by a 6% interest rate. It is currently planning new bond issuance operations (7 and 10-year bonds) in November.

Overall, the Cameroonian public treasury plans to raise XAF120 billion on the BEAC money market by issuing treasury bonds. This ambition is reasonable because, between April and June 2020, the country successfully concluded a bond issuance program where it raised XAF219.4 billion out of the XAF220 billion it was requesting.

The government was thus refocusing its fundraising strategy on long-term securities instead of the short-term ones public authorities were valuing. To defend this shift, the Cameroonian Ministry of Finance explains that long-term securities offer more flexibility in terms of cost and procedures.

Brice R. Mbodiam