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Cameroon gets additional 44 billion FCFA from IMF

July 22, 2019

By Amos Fofung

Mitsuhiro Furusawa, IMF Deputy Managing Director and acting Chair

Mitsuhiro Furusawa, IMF Deputy Managing Director and acting Chair

The International Monetary Fund, IMF, has concluded another review mission to Yaounde, after which it approved the sum of 76.2 million dollars (44 billion FCFA) as loan for the government of Cameroon.

The Executive Board of the IMF completed the fourth review of the arrangement under the Extended Credit Facility, ECF, for Cameroon on July 17.

According to the Fund’s officials, completion of the review enables the disbursement of SDR 55.2 million (about US$76.2 million), bringing total disbursements under the arrangement to SDR 372.6 million (about US$514.5 million).

The Executive Board also approved the authorities’ request for a waiver for the non-observance of the performance criteria pertaining to the external arrears’ accumulation and the ceiling on net BEAC financing, based on the corrective actions taken by the authorities. Cameroon’s three-year arrangement was approved on June 26, 2017 for SDR 483 million (about US$666.9million, or 175 percent of Cameroon’s quota.

The arrangement aims at supporting the country’s efforts to restore external and fiscal sustainability and to lay the foundations for a more sustainable, inclusive and private sector-led growth. Following the Executive Board discussion, Mitsuhiro Furusawa, who is presently IMF Deputy Managing Director and Acting Chair, stated that Cameroon’s performance under the ECF-supported program has improved from a year ago, adding that most end December 2018 targets including those on the fiscal deficit have been met, and structural reforms were advancing.

The Executive Board noted that Cameroon continues to play a leadership role in the rebuilding of fiscal and external buffers of member states of the Central African Economic and Monetary Union, CEMAC. Going forward, the Cameroonian authorities’ continued support of the implementation of the foreign exchange regulations stipulated by the Bank of Central African States, BEAC, will be essential to ensure full repatriation of foreign exchange receipts, IMF experts stated.

They advised that enhanced fiscal discipline is key to reaching the end-2019 programme targets and mitigating risks from external shocks and security challenges.

Reducing recourse to exceptional spending procedures and completing the Treasury Single Account reform will support the steadfast implementation of the 2019 budget while improving cash management and the transparency of budget execution.

Too, refraining from new non-concessional borrowing and strictly adhering to the disbursement plan for contracted-but undisbursed loans are essential to preserving debt sustainability. Further project prioritization and enhanced investment efficiency will help address developmental needs while supporting prudent debt management.

Improving the financial viability of key public enterprises through performance contracts and targeted reforms of administered prices will reduce reliance on subsidies and mitigate risks from contingent liabilities.

Above all, enhancing financial inclusion, the business climate, and governance remain central to promoting private sector development and boosting competitiveness.

In particular, further strengthening EITI compliance and the AML/CFT framework are essential to promoting private sector-led growth and attracting foreign investment.

The experts concluded that Cameroon’s program continues to be supported by the implementation of supportive policies and reforms by the regional institutions in the areas of foreign exchange regulations and monetary policy framework and to support an increase in regional net foreign assets, which are critical to the program’s success.

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