(Business in Cameroon) - On July 13, 2023, the 2024 budget preparation workshop was officially opened, in Yaoundé,  by Finance Minister Louis Paul Motaze (photo). During his opening address, he described national and international uncertainties that could lead to a significant drop in Cameroon’s oil revenues in 2024. "(...) The uncertainties weighing on the global economy call for caution regarding the forecast of a substantial increase in domestic revenues in 2024, in a context of falling prices and a crumbling potential for the mobilization of oil revenues, which are projected -in the latest budgetary framework- to drop by more than CFAF195 billion compared to 2023,” Minister Motazé said. 

The projections need to be taken with caution considering the uncontrolled fluctuations in the dollar exchange rate and even crude oil prices, which may evolve favorably in the coming months, as long as the war between Russia and Ukraine persists. Apart from oil revenues, budget support and funds raised are also expected to drop in 2024. "The projections are not better concerning financing resources, which could also experience a significant contraction in 2024 due to the reduction in budgetary support and domestic borrowing," Minister Motazé further stated on July 13, 2023.

Indeed, the economic and financial program with the IMF (the International Monetary Fund) will end in 2024. In the framework of the program, Cameroon receives gradual disbursements of budget support, amounting to CFAF770 billion, including CFAF380 billion directly from the IMF. A significant portion of that support has already been disbursed and, with the program coming to an end, the financial lifeline will cease. 

On February 10, 2023, when inaugurating the newly appointed executives of the national sinking fund CAA and the Deposits and Consignments Fund (CDC), the Minister of Finance had urged the executives to find solutions to address the decrease in budget support. "Cameroon is not destined to be indefinitely under a program [with the IMF], so we should remember that management involves foresight. It is therefore up to all of us, including you, to find replacement resources for this budget support so that Cameroon can continue moving forward and continue to finance its development. I count on you," he said. 

In addition to the projected drop in oil revenues and the imminent end of budget support, Louis Paul Motazé also fears Cameroon will have a hard time raising funds on the sub-regional capital market, where it regularly sources resources to finance the budget deficit. The country did raise CFAF176.7 billion out of CFAF150 billion for its 2023 bond issue but raising funds in the CEMAC zone is becoming challenging. The reason is the restrictive monetary policy implemented by the central bank (BEAC) to combat inflation. The measures it has taken for that purpose have dried up liquidity from commercial banks’ coffers and raised interest rates.  

Brice R. Mbodiam