(Business in Cameroon) - Cameroon is launching a plan to raise CFA35 billion on the Beac public securities market this month. Information from the Finance department revealed that the first operation, aiming at CFA25 billion, will be launched on March 6. It will consist of the issuance of 5-year fungible Treasury bonds (OTA) with an interest rate of 5.75%.
The remaining CFA10 billion will be raised through the issuance of 3-year OTAs with an interest rate of 4.25% during an operation scheduled for March 27. Currently, the Beac market seems favorable for long-term borrowing, in terms of costs, subscription rates, and participation rates in operations of market intermediaries such as banks operating as Primary Dealers. Indeed, according to Beac data, since January 2023, average interest rates on government securities have tended to fall. Between December 2022 and January 2023, the average cost of operations fell from 7.06% to 6.74%, down 0.32 points. At the same time, the rate of participation of primary dealers in the issuance of government securities increased by 18.39 points, from 30.05% in December 2022 to 48.4% in January 2023. As for the subscription rate, it rose, during the period under review, from 70.18% to 88.91%, up 18.73 points.
However, although indicators are on the green, Cameroon relies more on its creditworthiness status to succeed in its operations. The country repaid more than CFA3,000 billion to investors since 2011, without a single default. This allows it to practice a very prudent interest rate policy. In December 2021, for example, the OTAs issued by Cameroon posted their lowest average cost since June 2019, at only 4.34%.
"So far, the market is receptive. The only problem we have is with short-term securities (fungible Treasury bills, whose maturity does not exceed 1 year, ed). Investors are more focused on making profits. For medium- and long-term securities, especially those with a maturity of 5 or 7 years, everything is going very well. The proof is that in May 2022, we raised CFA235 billion, at a rate of 6.25%. Subscriptions were even at CFA239 billion," says Sylvester Moh, Director General of the Treasury at the Ministry of Finance.
Brice R. Mbodiam