(Business in Cameroon) - Cameroon is about to secure a valuable partner for its National Development Strategy 2020-2030. Yesterday, the Minister of Economy (Minepat) signed a Memorandum of Understanding (MoU) with Zhu Chunyu, the CEO of the Silk Road Investment Fund (SRIF), an investment fund controlled by the Chinese government. The validation of the agreement will see Cameroon receive a loan of $30 billion, or about CFA18,330 billion to finance development projects.
According to information relayed by Cameroon Tribune, the MoU is just the first step in the process leading to actual disbursements. Further general and specific agreements will need to be signed at the time of implementing the selected projects.
Strong Exposure to China
"The Prime Minister has provided clear indications regarding expectations and strategic directions under the NDS-30, and the Chinese side will position itself in projects that offer profitability to attract them," the Minister of Economy explained. The availability of this significant funding, which amounts to three times the budget of Cameroon for 2023, is expected to accelerate the implementation of the NDS-30, officially estimated at CFA88 trillion. However, the disbursement will further strengthen Cameroon's exposure to China. As of March 31, 2023, the debt owed to China accounted for 64.5% of Cameroon's bilateral debt and 26.2% of its external debt, amounting to CFA2,106.7 billion.
Due to difficulties in meeting its obligations to its lender, Cameroon received debt restructuring from Eximbank in July 2019. According to the Cameroonian Ministry of Economy, the Chinese state-owned import-export bank agreed to reschedule 70% of the amount (excluding interest) that Cameroon owed it, covering the period from July 2019 to March 2022. This funding, relating to 22 projects in Cameroon's portfolio, is estimated at CFA150 billion.