Cameroon’s Credit Rating Holds Steady as Economy Shows Promise, But Challenges Remain

March 24, 2025 1 Comment

CameroonOnline.ORG | March 2025 – The international credit rating agency S&P Global has kept Cameroon’s credit rating at ‘B-/B’ with a stable outlook. This means that while the country still faces financial and political risks, its economy is showing enough strength to avoid a downgrade for now.

Why the Rating Matters

Credit ratings are like report cards for countries. They tell investors how risky it is to lend money to a government. A stable rating helps Cameroon attract loans and support from international partners at lower interest rates, which is important for building infrastructure and running public services.

A Growing Economy, but Not Without Risks

Cameroon’s economy is expected to grow steadily—about 4.3% each year from 2025 to 2028. This is thanks to:

Rising natural gas and mining production
Ongoing industrial growth
Strong exports of cocoa, gold, and timber

Several big projects are helping too, like new hydroelectric dams and upgrades to the Kribi deep seaport, which should improve electricity access and trade.

But there are still challenges:

Oil production is going down as older oil fields dry up
Climate events like floods are a growing threat, especially to farming
Some parts of the country still face security problems
Cameroon depends heavily on exports, so changes in global markets could hurt the economy

Government Budget: Better Control, but Still Fragile

The government has made progress in managing its finances. By cutting back on expensive fuel subsidies and increasing tax collections, the budget deficit (the gap between what the government earns and spends) is expected to stay low—about 1% of GDP each year.

Debt is also going down slowly. The government is working with international lenders like the IMF and World Bank to improve public spending and reduce waste. However, the regional bond market (where the government borrows money) is starting to get crowded, making it harder to find cheap loans.

Support from Regional Partners and Donors

Cameroon is part of a regional group called CEMAC (Economic and Monetary Community of Central Africa), which helps reduce risks from trade and currency changes. The country uses the CFA franc, which is tied to the euro. This helps keep inflation under control and gives Cameroon access to shared financial resources in times of crisis.

Cameroon also gets strong support from international donors. The IMF has provided nearly $840 million in loans since 2021. More help is expected after the October 2025 elections. Donor support not only brings in money, but also helps Cameroon carry out important reforms.

Political Uncertainty Ahead of Elections

One major concern is the upcoming presidential election. President Paul Biya, who has been in power since 1982 and is now 92 years old, is expected to run again. Because power in Cameroon is very centralized, the country has never gone through a major political transition, and that creates uncertainty.

Delays in legislative elections and ongoing tensions in some English-speaking regions of the country also add to the risk of unrest.

Looking Ahead: What Could Go Wrong or Right

Downside Risks
Cameroon’s economy could take a hit if oil and gas prices fall sharply, or if the government fails to manage its finances properly. Political instability or conflict could also hurt the country’s credit rating.

Upside Opportunities
If the government continues to improve tax collection and public spending, and if exports grow faster than expected, Cameroon’s rating could improve. Making government more transparent and efficient would also help.

Conclusion: A Country with Potential and Challenges

Cameroon has strong potential, with natural resources, growing industries, and large infrastructure projects underway. The economy is holding up well, and the government is making progress in managing money more responsibly.

However, the road ahead is not easy. Political uncertainty, global economic changes, and climate risks all pose serious threats. With smart policies, continued support from international partners, and a peaceful political process, Cameroon can stay on a stable path and even improve its position in the years to come.

Cameroon’s Credit Rating Holds Steady as Economy Shows Promise, But Challenges Remain

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