MarketForces Africa | The International Monetary Fund (IMF) and the Cameroonian authorities have reached a staff-level agreement on the seventh reviews of the Extended Credit Facility (ECF) and the Extended Fund Facility (EFF), as well as the second review of the Resilience and Sustainability Facility (RSF).
The ECF/EFF arrangements were approved by the IMF Executive Board for a total amount of SDR 483 million (US$ 689.5 million) in July 2021, according to an official statement. An extension of these arrangements of 12 months was approved in December 2023 to allow more time to implement the policies and reforms, and access was augmented by SDR 110.4 million (US$ 147.6 million).
The 18-month RSF was approved by the Executive Board in January 2024 in the amount of SDR 138 million (US$ 183.4 million). Economic recovery has continued, but growth remains subdued, IMF staff said at the end of review.
Economic growth was 2 percent in 2023 and expected to pick up to 3.9 percent in 2024. Twelve-month average inflation was 4.6 percent in November 2024, down from 7.5 percent last year.
IMF said program performance was broadly satisfactory. Some reforms have been delayed, and the authorities have worked to complete work on measures related to governance in the extractive industry sector, the business climate, SOE reform, and public financial management.
At the conclusion of the discussions, Ms. Cemile Sancak, Mission Chief said, “The IMF and the Cameroonian authorities have reached staff-level agreement on the seventh review of the ECF/EFF arrangements, as well as the second review of the RSF arrangement.
“The agreement is subject to approval by the IMF Executive Board. Completion of the reviews would enable disbursement under the ECF-EFF arrangements of SDR 55.2 million (US$ 73.0 million) and disbursement under the RSF arrangement of SDR 34.5 million (US$ 45.6 million).
“Cameroon’s recovery is continuing, but growth is subdued. In 2023, the economy grew 3.2 percent and is expected to pick up to 3.9 percent for 2024. Inflation has subsided further; twelve-month average inflation was 4.6 percent in November 2024, down from 7.5 percent last year.
“The fiscal outlook for 2024 is positive. The target for the non-oil primary deficit remains 2 percent of GDP, an improvement on 2.5 percent of GDP last year (and 3.9 percent of GDP in 2022).
“During the first half of 2024, non-oil revenues improved by 5 percent, helped by a solid performance of corporate and indirect taxes.
“Lower-than-expected expenditure was due to delays in investment projects, a recurrent challenge that weighs on growth prospects.
“Prospects are broadly positive provided continued reform implementation and benign external conditions.
“The growth forecast is unchanged at about 4 percent in 2024, gradually rising to about 4.5 percent over the medium term. Inflation is expected to decline to 4.4 percent by the end of 2024 and gradually reach the CEMAC convergence criterion of 3 percent by 2026.
“The 2025 budget was adopted by Parliament in December and is consistent with the objectives set out under Cameroon’s IMF-supported program and anchoring fiscal policy over the Presidential elections later in 2025.
“A key goal remains generating space for productive and social investment and advancing anticorruption reforms”.
There have been delays in the implementation of the structural reform agenda.
To attain the ambitious objectives of the national development strategy (SND30), the authorities are encouraged to complete important measures set out in the program concerning governance in the extractive industry sector, the business climate, SOE reform, and public financial management.
“Specifically, the mission urged the authorities to advance long-pending work on the SONARA restructuring plan and revise the 2013 law to streamline investment incentives.
“Under the RSF, Cameroon has intensified efforts to improve the climate policy framework. Work is progressing on the reform measure to establish guidelines for evaluating investment projects with climate change considerations in mind, to improve disaster preparedness by revising the Civil Protection law and by updating the mandate of the National Risk Observatory.
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