(Business in Cameroon) - After a slight break following its series of bonds issuance thanks to which it raised XAF219.4 billion (between April and June 2020), Cameroon is announcing new fundraising on the money market in Q4-2020.
In the official release signed by Samuel Tela, Director of Treasury at the Treasury General Directorate of the Ministry of Finance, the Ministry of Finance indicate that the country plans to raise XAF180 billion on the BEAC public securities market between October and December 2020.
XAF120 billion will be raised by issuing long-term securities. First, in early October, the country will try to raise XAF35 billion each by issuing 6 and 10-year bonds. By the end of October 2020, the country will also issue 7-year securities to try to raise XAF25 billion and in November, it will issue 10-year bonds to raise XAF25 billion.
The remaining XAF60 billion will be raised via the issuance of short-term securities. Over the three (3) months, Cameroon will issue 26-week securities every month.
With the new provisional calendar, Cameroon is sticking to its plan to refocus its fundraising strategy by issuing long and medium-term securities on the money market instead of the capital market whose conditions are more stringent.
It implemented the new strategy in Q2-2020 and was emulated by some neighbors. According to a recent report by the BEAC, that quarter was the first since the launch of the market (in November 2011) in which the volume of treasury bonds (53.6% of overall issuance) issued exceeded that of the treasury bills.
The Central bank (BEAC) adds that this predominance of treasury bonds affected the composition of CEMAC countries’ debt portfolio. The portfolio is now constituted of 58.3% treasury bonds. From XAF763.9 billion at the end of June 2019, the volume of treasury bonds issued by CEMAC countries rose almost two-fold to XAF1,513.4 billion on June 30, 2020. However, the volume of treasury bills rose by just 14.9% during the period (XAF940.5 billion to XAF1,080.3 billion).
Brice R. Mbodiam