In a move aimed at supporting Cameroon’s economic and financial reform program, the Executive Board of the International Monetary Fund (IMF) has completed the Fourth Reviews of the country’s Fund-supported program. The completion of these reviews has resulted in an immediate disbursement of $73.6 million.
The three-year blended arrangements, known as the Extended Credit Facility (ECF) and the Extended Fund Facility (EFF), were approved on July 29, 2021. The disbursement of SDR 55.2 million (approximately $73.6 million) brings the total disbursements under the arrangements to SDR 372.6 million (around $493.6 million), according to the IMF.
Despite facing uncertainties in both domestic and global environments, Cameroon has shown resilience, with an estimated growth rate of 3.8 percent in 2022, supported by non-oil production. The country’s headline inflation stood at 7.3 percent at the end of 2022, and the overall fiscal deficit improved from 3 percent of GDP in 2021 to approximately 1.1 percent of GDP in 2022, driven by higher oil and non-oil revenues.
Looking ahead, the IMF stated that the medium-term outlook remains positive, contingent upon ongoing reforms and a more supportive external environment. Real GDP growth in Cameroon is projected to reach 4 percent in 2023 and average 4.4 percent in the medium term. This growth is expected to be driven by the agroindustry, forestry, services sectors, as well as LNG production, partially offsetting the decline in oil output. Inflation is also expected to return to below 3 percent in the medium term.
During the completion of the reviews, the IMF Board approved the waiver of non-observance of the performance criterion concerning the non-accumulation of new external payments arrears. The breach was deemed temporary and minor by the IMF.
Mr. Kenji Okamura, Deputy Managing Director and Acting Chair, commented on Cameroon’s recovery in the face of challenging circumstances. He highlighted the positive impact of the ECF and EFF arrangements in supporting macroeconomic stability, promoting growth, and advancing long-standing reforms. Okamura emphasized the importance of resolute reform implementation to manage current shocks, enhance growth, and bolster resilience.
However, Okamura also noted that Cameroon’s performance under the program has been mixed. There have been minor and temporary breaches in the quantitative performance criterion on the accumulation of external arrears in early 2023, and three out of five indicative targets under the program have been repeatedly missed. While acknowledging progress in certain areas, such as governance and revenue administration, Okamura emphasized the need for the authorities to accelerate structural reforms and address missed targets.
To unlock Cameroon’s growth potential, Okamura stressed the importance of accelerating structural reforms, including measures to boost private sector-led growth and enhance the business climate. He welcomed recent initiatives such as the launch of a financial inclusion strategy and efforts to strengthen governance. Additionally, Okamura highlighted the need to improve the financial sector’s stability and inclusion, strengthen governance and transparency, and address deficiencies in the anti-corruption framework identified by the Financial Action Task Force (FATF).The approval of the $73.6 million loan by the IMF will provide vital support to Cameroon as it continues its economic and financial reform efforts, aiming to achieve sustainable growth and stability in the years to come.
