News Brief: IMF Completes Third Review of Cameroon and Approves US$23.26 Million Credit
October 11, 2000
The Executive Board of the International Monetary Fund (IMF) today completed the third review of Cameroon’s economic performance under a program supported by a three-year arrangement under the Poverty Reduction and Growth Facility (PRGF)1. The completion of this review enables the release of a further SDR 18.01 million (about US$23.26 million) from the IMF, which brings total disbursements under the program to SDR162.12 million (about US$209.31 million).
After the Executive Board’s discussion, Stanley Fischer, First Deputy Managing Director, made the following statement:
“The Cameroonian authorities are to be commended for the good record of macroeconomic and structural policy performance during the three-year program supported under the PRGF arrangement. Overall improvements in economic and financial conditions included increased per capita GDP growth, containment of inflation, marked progress toward fiscal sustainability, the launching of an ambitious privatization program, and significant progress in the liberalization of the energy and transport sectors. Despite these achievements, a great deal more is needed to enhance growth prospects and reduce poverty. The challenge facing Cameroon is to consolidate the gains made over recent years and establish a solid foundation for the next phase of reforms.
“The government’s interim Poverty Reduction Strategy Paper and the participatory approach constitute a good basis for the elaboration of a full and participatory PRSP. Improvement in the areas of health, education, delivery of basic social services, rural development, as well as improved governance, will be crucial elements in tackling poverty.
“There is also a need to enhance public resource mobilization and expenditure management, including by improved monitoring. Directors attached particular importance to further progress in improving governance and fighting corruption.
“With the completion of the third year of the present PRGF program, the Executive Board looks forward to a new medium-term program that could be supported under a new PRGF arrangement,” Mr. Fischer said.
1 On November 22, 1999, the IMF’s concessional facility for low-income countries, the Enhanced Structural Adjustment Facility (ESAF), was renamed the Poverty Reduction and Growth Facility (PRGF), and its purposes were redefined. It was intended that PRGF-supported programs will in time be based on country-owned poverty reduction strategies adopted in a participatory process involving civil society and development partners, and articulated in a poverty reduction strategy paper (PRSP). This is intended to ensure that each PRGF-supported program is consistent with a comprehensive framework for macroeconomic, structural, and social policies to foster growth and reduce poverty. In the case of Cameroon, an interim PRSP--which will provide a guideline to the preparation of the full PRSP-- were prepared and presented to the World Bank and the IMF Executive Boards on October 10 and 11, 2000, respectively. PRGF loans carry an annual interest rate of 0.5%, and are repayable over 10 years with a 5 1/2 year grace period on principal payments.