(Business in Cameroon) - At a little more than 35% of GDP in late April 2019, Cameroon’s public debt is still sustainable. Indeed, according to the convergence criteria within CEMAC, the max should be 70% of GDP.
Despite the sustainability of its debt, Cameroon is ranked as a country with a high risk of debt distress by Bretton Woods institutions because of its growing debt ratio recently.
This debt status was confirmed, on July 8, 2019, by Cameroon’s minister of finance Louis Paul Motazé during the presentation of the 2020 initial budget proposal. This presentation, made before the parliament, was in the framework of the first-ever budget orientation debate in Cameroon.
“The high risk of debt distress is justified by the overrun, since 2018, of two liquidity ratios namely, the debt service ratio to exports revenues as well as the debt service to revenues ratio. This means that from 2018 to 2026, the public treasury will encounter tremendous difficulties in fulfilling its commitments, the timely payment of debt servicing notably,” the official revealed.
To break free from this perpetual curse of public debt, the government suggests the implementation of “a rigorous and controlled debt policy” in the next three years, “to reduce middle-term vulnerability,” he added.
Let’s note that on April 30, 2019, Cameroon’s publicly guaranteed debt was XAF7,557 billion. According to figures published by the ministry of finance, it was 3.3% up compared with the level at end of December 2018 and 15.5% up year on year.
Brice R. Mbodiam