Press Release No. 17/76

IMF Staff Initiates Discussion with Cameroon on an Economic Program Supported by the Fund

March 7, 2017

• IMF team and Cameroonian authorities discussed an economic program that would lay out a path to sustained economic recovery and higher, more inclusive growth
• The team and authorities discussed measures to enhance the business environment to boost private sector investment and economic diversification
• Discussions will continue to reach an understanding on the policies that could form the basis for an IMF-supported economic program

An International Monetary Fund (IMF) team, led by Ms. Corinne Deléchat, visited Yaoundé from February 20–March 6, 2017, to hold discussions toward a three-year economic and financial program for Cameroon.

At the conclusion of the visit, Ms. Deléchat issued the following statement:

“The IMF team and the Cameroonian authorities started discussing an economic program through 2019 that would lay out a path to sustained economic recovery and higher and more inclusive growth. The team follows the December 23 summit in Yaoundé, where CEMAC heads of state agreed that a resolute and concerted effort to preserve macroeconomic stability in the region was necessary, and to initiate discussions with the IMF and other development partners as part of a path toward the resolution of the region’s economic challenges.

“The sharp decline in commodity prices, along with security threats in the Lake Chad basin and, until recently, civil unrest in the neighboring Central African Republic, have negatively impacted Cameroon’s external and fiscal balances. While the Cameroonian economy has weathered these shocks thus far, with economic growth remaining relatively robust, public debt has risen rapidly and external and fiscal buffers have declined significantly. In light of this difficult context, which is deeply affecting all CEMAC countries, decisive fiscal and debt management policies are needed to preserve macroeconomic stability. At the same time, ambitious structural measures are critical to boost private sector investment and support inclusive growth.

“The medium-term economic outlook remains positive, as Cameroon enjoys a relatively diversified economy, and key infrastructure projects such as the Lom Pangar hydroelectric dam, the deep sea port of Kribi and the Kribi gas plant, are coming on stream. That outlook is subject to continued implementation of policies to increase non-oil domestic revenue, rationalize spending while preserving pro-growth and pro-poor expenditures, and adopt sound and prudent debt management policies. The IMF staff team noted that the 2017 Finance Law already represents an important step in this direction, and encouraged the authorities to continue to expand the non-oil tax base and enhance spending efficiency, in particular by prioritizing investment spending with the highest growth dividends. Staff emphasized the need to protect and even increase social spending in favor of the most vulnerable groups, and welcomed the authorities’ plans to scale up their successful social safety nets program. Given the rapid increase in public debt, a particular focus should be given to reducing the pace of new borrowing, particularly on non-concessional terms.

“The team and the authorities have made good progress in discussing measures to strengthen economic outcomes, enhance the business environment to boost private sector investment and economic diversification, and achieve a more inclusive growth. Discussions will continue in the coming days to reach a common understanding on the full set of policies that could form the basis for an economic program supported by the IMF.

“The team met with Minister Secretary General at the Presidency Ferdinand Ngoh Ngoh, Minister Secretary General at the Prime Minister’s Office Seraphin Fouda, Minister of Finance Alamine Ousmane Mey, Minister of Economy, Planning, and Territorial Development Louis Paul Motaze, the Governor of the Bank of Central African States (BEAC), Mahamat Abbas Tolli and other senior officials and representatives of the diplomatic community, development partners and private sector.

“The team wishes to thank the Cameroonian authorities for their warm hospitality, their excellent cooperation, and the constructive and frank dialogue.”