Cameroon – Finance: State’s debt stands at 5,383 billion in May 2017

Alamine Ousmane Mey
Written by Deckson N.

The public debts of Cameroon remain viable over 20 years, with a risk of moderate debt distress.

In its publication of June 27, 2017, Le Quotidien de l’Economie reveals that the debt of the State amounts to CFAF 5 383 billion as of May 31, 2017. This represents 30.3% of the Gross Domestic Product (GDP). Direct public debt is estimated at 5,021 billion, or 28.2 per cent of GDP, and represents 93.6 per cent of this outstanding amount, compared to 6.4 per cent of the debt, including statutory advances of the Bank of Central African States (BEAC) valued at 281 billion FCFA. This amount increased by 1.6% month-on-year and 13% year-on-year.

As regards direct public debt, it is composed of the external debt of 3991 billion (22.4% of GDP) and that of the interior estimated at approximately 1047 billion CFA francs ( 5.9%). The public debt service paid by the State in the first five months of 2017 amounts to 209.4 billion, of which about 111.2 billion for the domestic debt and 98 billion for the account of the domestic debt. The cumulative forecast service for the period from January to May, entered in the 2017 Finance Act, amounts to 240.4 billion, reflecting an execution rate of 87.1%. This rate of execution remains in line with the trend begun in the first quarter of the year, the daily said.

The Minister of Finance (Minfi), Alamine Ousmane Mey, published on June 22, the budget execution of Cameroon at the end of March 2017. And according to the document, the effective service of the external debt amounts to 44.9 billion of FCFA in the first quarter, compared to 63.4 billion during the same period in 2016. This represents a decrease of 18.5 billion (-29.2%). “Its realization rate is practically 100% and there is no accumulation of arrears on foreign debt,” says Almond Ousmane Mey.

At the end of the recent public debt sustainability analysis (DSA) carried out in May 2017 by the CAA and the Debt Sustainability Analysis Committee, it emerged that Cameroon’s external debt and public debt at 31 December 2016 remain viable over the 20-year horizon, with a risk of moderate debt distress. According to the Debt Sustainability Framework methodology, all debt indicators remain below their respective critical thresholds throughout the analysis period in the baseline scenario. “However, exceeding these thresholds in the event of a shock for the present value of the debt on exports ratios, debt service on exports and debt servicing on revenue, justifies the situation of the risk of moderate overindebtedness” , Says the CAA.

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Deckson N.

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