Press Release No. 23/399

IMF Reaches Staff-Level Agreement with Cameroon on the Fifth Reviews of Extended Credit Facility and Extended Fund Facility and Concludes Article IV Consultation

November 17, 2023

• IMF staff and the Cameroonian authorities have reached staff-level agreement on economic policies to conclude the fifth reviews of the ECF and EFF arrangements, and on a 12-month extension of the program. Once the review is approved by IMF Management and completed by the IMF Executive Board, Cameroon will have access to about $72.7 million (SDR 55.2 million) in financing.
• Cameroon has remained resilient in the face of successive external shocks. Real GDP growth is expected to reach 4 percent in 2023 and 4.3 percent in 2024.
• IMF staff also concluded the 2023 Article IV consultation. The discussions focused on macro-critical policy measures to boost medium-term growth and resilience, including to enhance growth potential through structural transformation and address climate change.

Washington, DC – November 16, 2023: An International Monetary Fund (IMF) team, led by Cemile Sancak, IMF Mission Chief for Cameroon, visited Cameroon on October 19-November 1 and held virtual meetings from November 2-16 to discuss macro-critical policy measures to manage current shocks and boost medium-term growth and resilience in the context of the fifth reviews of the three-year program supported by the Extended Credit Facility (ECF) and Extended Fund Facility (EFF) arrangements. The arrangement was approved by the IMF Executive Board on July 29, 2021 , for a total amount of SDR 483 million (about US$689.5 million).

At the conclusion of the mission, Ms. Sancak issued the following statement:

“I am pleased to announce that the Cameroonian authorities and the IMF staff have reached a staff-level agreement on the economic and financial policies that could support the approval of the fifth reviews of the program under the ECF and EFF arrangements. Conclusion of the fifth review by the IMF Executive Board in December would enable the disbursement of SDR 55.2 million (about US$ 72.7 million), bringing the total IMF financial support disbursed under the arrangement to SDR 427.8 million (about US$ 566.3 million.)

“The mission also reached a staff level agreement with the Cameroonian authorities on the extension of the ECF and EFF arrangements for 12 months to July 2025. The extension would provide additional financing of SDR 110.4 million (about US$ 145.4 million).

“The Cameroonian economy has remained resilient in the face of a difficult external environment, including tight global financial conditions and high oil price volatility. Following an increase of 4 percent in 2023, real GDP growth is expected to accelerate to 4.3 percent in 2024. Headline 12-month inflation is expected to moderate from 7.2 percent in 2023 to 5.9 percent in 2024.

“Fiscal performance in 2023 is broadly in line with the program. The overall deficit is expected to decline from 1.1 percent in 2022 to 0.7 percent in 2023 while the non-oil primary deficit is expected to fall from 3.9 to 2.5 percent over the same period. At the same time, the stock of public debt is expected to fall from 45 percent of GDP at end-2022 to below 42 percent at end-2023. Budget execution was supported by a significant increase in non-oil revenues. However, it also faced pressures from fuel subsidy in 2022, which was substantially higher than expected and carried over to 2023. A substantial portion of subsidy is also likely to be carried over from 2023 to 2024.

“The authorities expressed their continued commitment to maintaining macroeconomic stability. In line with program objectives, fiscal policy remains geared towards consolidation and strengthening the resilience of the public finances. The authorities are therefore committed to reducing the non-oil primary deficit further in 2024 to below 2 percent of GDP and the stock of public debt to 40 percent of GDP. The authorities have committed to incorporating adequate financing in the 2024 budget to cover substantial unpaid obligations from the execution of the 2023 budget and carried over to 2024. They recognize that budget execution in 2024 will continue to face large and unsustainable pressures from fuel subsidies unless steps are taken to moderate the costs.

“Implementation of structural reforms is progressing. The authorities acknowledged the need for a more concerted effort to mobilize domestic non-oil revenues by widening the tax base, improve the prioritization, efficiency, and procurement of public expenditures, reduce spending through exceptional procedures, and settle unpaid obligations on a timely basis. It is important to strengthen the management of public enterprises, especially those supporting economic infrastructure. In this context, the mission emphasized the need for progress on restructuring SONARA.

“The mission discussed policies to ensure long-term sustainable growth and address macro-critical climate challenges. The national development strategy for 2020-30 (SND30) envisages a broad structural transformation of the economy. Horizontal policies such as investments in human capital and infrastructure, enhancing governance, improving access to finance will support structural transformation and export diversification. To address macro-critical climate challenges, Cameroon needs to mainstream climate commitments into the country’s institutional, regulatory and public finance frameworks and step up both adaptation and mitigation efforts.

“The IMF team met with the Prime Minister, Joseph Dion Ngute, the Minister of State and Secretary General of the Presidency, Ferdinand Ngoh Ngoh, the Minister of Finance, Louis Paul Motaze, the Minister of the Economy, Planning, and Regional Development, Alamine Ousmane Mey, the National Director of the BEAC, Emmanuel Nkoa Ayissi, and other senior officials. The team also met with representatives of development partners, the diplomatic community, the private sector, and civil society.

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