Cameroon Seeks Alternative Financing Solutions for Development Goals

Cameroon is seeking alternative financing strategies, particularly structured finance, to fund its National Development Strategy (SND30) by 2030. A seminar organized by GM Finance educated financial professionals on leveraging complex financial instruments. The government aims to raise CFA1.795 trillion in debt for 2025, with emphasis on innovative mechanisms like securitization to secure the necessary funds.

Cameroon is pursuing new financing strategies to secure the necessary funds for its National Development Strategy (SND30) by 2030. With limited domestic resources and restricted access to traditional financial markets, the nation is focusing on alternative funding methods, especially structured finance. A seminar organized by GM Finance from February 26 to 28, 2025, in Douala aimed to educate financial professionals on structured finance solutions.

The three-day seminar brought together participants from government agencies, state-owned enterprises, private companies, multinational corporations, and banks to enhance their understanding of structured finance. Financial expert Hubert Otele Essomba elaborated on structured finance as the use of complex instruments that blend loans, equity, bonds, and derivatives to create tailored financial solutions. Key instruments discussed included public-private partnerships (PPPs), hedge funds, sovereign wealth funds, securitization, and credit ratings.

Recognizing the urgent need for liquidity, the Ministry of Finance, alongside financial experts, emphasized the importance of exploring these alternative funding sources. Currently, Cameroon’s debt remains below 70% of the regional threshold. For 2025, the government plans to secure CFA1.795 trillion in debt, with a significant portion allocated to project loans and budget support.

From 2025 to 2027, Cameroon will require an estimated CFA5.407 trillion in borrowing. To attain these funds, the country must shift from traditional financing approaches and adopt innovative mechanisms that reduce risk while maximizing returns. Essomba noted that opportunities lie in utilizing sovereign wealth funds, pension funds, and bonds for enhanced financial flexibility.

Securitization has emerged as a noteworthy avenue for financing development. Catherine Gerst, a financial strategy expert and former managing director at Moody’s France, articulated that securitization enables institutions to leverage assets to raise market funds. This process converts illiquid assets into tradable securities, thereby unlocking additional financing potential for development projects.

In summary, structured finance and innovative solutions such as securitization offer Cameroon the prospect of mobilizing essential resources to achieve its SND30 objectives. However, achieving success will depend on strengthening financial expertise, ensuring transparent governance, and creating an inviting environment for international investors.

Cameroon’s funding challenges necessitate innovative financial strategies to meet its development goals by 2030. The country’s shift towards structured finance and securitization represents a critical approach to bridging funding gaps. For effective implementation, strong financial capabilities and a welcoming investment climate are essential. Collaboration with international investors will be vital for realizing these aspirations.

Original Source: www.businessincameroon.com