The International Monetary Fund (IMF) granted Monday a credit of $ 666.2 million to Cameroon in exchange for a three-year economic program to revive an economy undermined by falling oil prices.
The IMF will immediately disburse $ 171.3 million. The remainder of this extended credit facility will be disbursed over a three-year period, the Fund said in a statement.
According to Deputy Managing Director of the Fund, Mitsuhiro Furusawa, “Cameroon was hit hard by the fall in oil prices as well as by insecurity factors” related to the attacks of the Nigerian jihadist group Boko Haram in the north of the country, “Which affected the activity of the Economic and Monetary Community of Central African States (CEMAC)“. This has led to a melting of common international reserves, one learns.
The Cameroonian economy, the largest in the subregion, “is facing a deceleration in its growth, a decline in its budget margin and a rapid increase in its public debt,” he added.
The aid program comes as the CEMAC countries (Cameroon, Central African Republic, Congo, Gabon, Equatorial Guinea, Chad) are experiencing an economic crisis that has resurrected the specter of a devaluation of the CFA franc.
It follows on from the summit of Heads of State of the six countries which met in Cameroon’s Yaoundé in December 2016 to find a coordinated response aimed at maintaining regional financial stability and anchoring the exchange rate.
The Central African Republic and Chad already have a program with the IMF. Gabon has just signed one, while Fund missions have recently visited Equatorial Guinea and the Congo.
Cameroon’s program will aim to consolidate the budget and implement reforms to diversify non-oil revenues. The authorities must also improve the “credibility and transparency” of budget execution by publishing regular reports, the IMF says.
Growth in the Cameroonian economy dropped from 5.8% in 2015 to 4.8% in 2016, while inflation in March was low at 0.4%. The budget deficit climbed to 6.5% of Gross Domestic Product (GDP) against 2% in 2015.