IMF Reviews Cameroon’s Financial Programs, Approves Substantial Disbursements
The IMF Executive Board has completed its seventh review of Cameroon’s ECF and EFF arrangements, releasing USD 73.5 million, and the RSF review, releasing USD 45.9 million for climate initiatives. Despite economic recovery, growth is low, necessitating stronger action in revenue mobilization and governance improvement. CAMC’s reform momentum is crucial for fiscal sustainability amid ongoing challenges.
On December 13, 2023, the Executive Board of the International Monetary Fund (IMF) finalized its seventh reviews under both the Extended Credit Facility (ECF) and the Extended Fund Facility (EFF) for Cameroon. As a result, an immediate disbursement of approximately USD 73.5 million has been authorized, increasing the total funds disbursed under these arrangements to USD 718.1 million. Additionally, the second review under the Resilience and Sustainability Facility (RSF) has been completed, amounting to an available support of about USD 45.9 million.
Despite continued economic recovery in Cameroon, growth rates remain low, indicating a pressing need for measures that enhance medium-term growth. The IMF emphasizes the importance of intensifying efforts to mobilize non-oil revenue, mitigate vulnerabilities within the financial sector, and address governance challenges, particularly in relation to anti-corruption initiatives.
The ECF-EFF arrangements, approved in July 2021 for SDR 483 million (approximately USD 689.5 million), were extended by one year in December 2023 and had their access increased by SDR 110.4 million. Furthermore, the RSF, approved in January 2024 for SDR 138 million, aims to bolster climate resilience initiatives.
Mr. Nigel Clarke, the Deputy Managing Director and Acting Chair of the IMF, highlighted the need for ongoing reform momentum in Cameroon despite commendable progress. He outlined the critical aspects of maintaining fiscal discipline, enhancing non-oil revenue, and improving public financial management as essential to economic stability.
Mr. Clarke also stressed the importance of strengthening the financial sector and implementing governance reforms to promote private sector growth. He noted, “Stepping up governance reforms and strengthening the anti-money laundering and combating the financing of terrorism (AML/CFT) regime will be needed to promote inclusive and private sector-led growth.”
He further warned of Cameroon’s high risk of debt distress, yet concluded that its debt trajectory remains sustainable. Ensuring the restructuring of oil refineries and reforms in the electricity sector are necessary to limit liabilities and enhance public service quality. Cameroon’s progression under the RSF is promising, fostering an environment for new investments from donors and the private sector.
The recent reviews and disbursements by the IMF signify continued support for Cameroon’s economic reform efforts. However, significant challenges remain, particularly in mobilizing non-oil revenues, addressing financial sector vulnerabilities, and enhancing governance. Emphasis on climate-related initiatives under the RSF further reflects the country’s commitment to sustainable development, yet the need for ongoing reforms is critical to ensure lasting economic stability and resilience to external shocks.
Original Source: www.miragenews.com
