News Brief: IMF Completes Cameroon Review Under PRGF and Approves $US 20 Million Disbursement
July 16, 2001
The Executive Board of the International Monetary Fund (IMF) today completed the first review of Cameroon's three-year arrangement under the Poverty Reduction and Growth Facility (PRGF).1 As a result, Cameroon will be able to draw an amount equivalent to SDR 15.92 million (about US$20 million) from the arrangement immediately.
Cameroon's three-year PRGF arrangement was approved on December 21, 2000 (see Press Release 00/86). for SDR 111.42 million (about US$139 million). So far, Cameroon has drawn SDR 15.92 million (about US$20 million).
After the Executive Board's discussion on Cameroon, Shigemitsu Sugisaki, Deputy Managing Director and Acting Chairman made the following statement:
"The Cameroonian authorities have made commendable progress in implementing their three-year, PRGF-supported program. Economic and financial conditions have substantially improved, inflation remains low, and progress toward fiscal sustainability has continued.
"Continued determined efforts are essential to reinforce the fiscal position by further strengthening public expenditure and revenue management, and to improve governance. These priorities are endorsed by the Cameroonian authorities at the highest level. The execution of the budget will be closely monitored to ensure that fiscal targets are met. The privatization program is to be brought to an early closure. Efforts in the near term to improve governance will focus on the judiciary system.
"The challenge facing Cameroon is to consolidate the fiscal and structural reform gains achieved so far and to create an environment conducive to increased private investment, job creation, and sustained growth. Determined policy implementation in these areas, together with effective and efficient use of the savings from HIPC assistance, are key to achieving Cameroon's poverty reduction objectives," Mr. Sugisaki said.
1 On November 22, 1999, the IMF's facility for low income countries, the Enhanced Structural Adjustment Facility (ESAF), was renamed Poverty Reduction and Growth Facility (PRGF), and its purposes were redefined. It is 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. Cameroon's full PRSP is expected to be finalized in early 2002. PRGF loans carry an annual interest rate of 0.5 % and are repayable over 10 years with a 5 ½-year grace period on principal payments.