Statement at the Conclusion of an IMF Mission to CameroonPress Release No. 10/135
April 5, 2010
An International Monetary Fund (IMF) mission led by Mr. Mauro Mecagni visited Cameroon during March 17–April 1, 2010 to conduct the 2010 Article IV Consultation.1 The mission met with Prime Minister Philemon Yang, State Minister at the Presidency Laurent Esso, several Cabinet members, senior officials, local government authorities, the business community, donors, and representatives of labor unions and civil society organizations.
At the end of the mission, Mr. Mecagni, Mission Chief for Cameroon, issued the following statement in Yaoundé:
“The global financial crisis has continued to affect Cameroon’s economy through weak external demand for the country’s main export commodities, a decline in average international oil prices in 2009 compared with 2008, and delays in foreign direct investments. As a result, economic activity, the fiscal accounts, and the external current account have been adversely impacted. The impact was, however, less severe than originally anticipated, owing to the authorities’ appropriate policy response, the Fund financial support under the rapid access component of the Exogenous Shocks Facility, and the global recovery now underway. Economic growth slowed to 2.0 percent in 2009 from 2.9 percent in 2008.
“Cameroon’s economic outlook remains broadly favorable. Growth is expected to pick up to around 3 percent in 2010 and to accelerate further in the coming years, contingent on the consolidation of the global recovery that could bolster demand for Cameroon’s exports. The mission welcomed the newly adopted Growth and Employment Strategy Paper (GESP), which defines the authorities’ medium- and long-term policy objectives and priorities. The mission concurred on the need to address the important infrastructural bottlenecks affecting growth prospects and called on the authorities to ensure an effective implementation of the GESP notably by enhancing upfront the capacity to better select, execute, and monitor public investment projects. The mission advised the authorities to seek appropriate resources to finance these projects in a way that would help preserve fiscal and debt sustainability and maintain economic stability. The IMF, in cooperation with other institutions, stands ready to assist the authorities in the implementation of their economic program, including through the provision of appropriate technical assistance.
“With regard to the 2010 budget, its feasibility depends critically on mobilizing a high level of domestic financing, including issuance of government bonds and drawing on deposits at the central bank. The 2010 budget could come under pressure from the unsettled payment orders accumulated over previous years. The mission called on the authorities to remain vigilant in executing the 2010 budget and to stand ready to adjust its implementation to ensure consistency with financing plans.
“While recognizing recent efforts, the mission urged the authorities to accelerate the completion of reforms underway to strengthen public expenditure and treasury management, and to improve governance and the business climate. A vigorous implementation of planned reforms in the fiscal, customs, and public enterprises areas and the clearing of domestic arrears will be crucial for normalizing relations with the private sector and restoring public credibility ahead of the planned issuance of public bonds on the domestic and regional financial markets.
“The mission agreed with the authorities on the need to preserve financial stability and ensure that banks comply with prudential regulations. It underscored the need to strengthen bank supervision and in this context to work with the regional supervision institution to reinforce its capacity. It is important that the authorities maintain close monitoring of development in this area while accelerating the implementation of the financial intermediation plan, in close collaboration with the regional institutions.
“The mission would like to thank the authorities for their warm hospitality, the timely provision of required information, the productive and open discussions, and the excellent cooperation during the mission. The IMF’s Executive Board is expected to discuss the 2010 Article IV Consultation with Cameroon by mid-June 2010.”
1 Under Article IV of the IMF's Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country's economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board. At the conclusion of the discussion, the Managing Director, as Chairman of the Board, summarizes the views of Executive Directors, and this summary is transmitted to the country's authorities.