## cr18235 — Selected Issues Paper and MEFP excerpts (Cameroon)

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### Security risks and humanitarian impact
- Anglophone region crisis is the dominant security risk, affecting North West and South West regions.
- Anglophone population: 20 percent of Cameroon’s total population of 25 million.
- Humanitarian impact (reported estimates):
  - More than 20,000 people fled to Nigeria.
  - 160,000 internally displaced persons (IDPs).
  - Adds to 340,000 refugees from Nigeria and the Central African Republic.
  - UNHCR estimates assistance cost: US$87 million, of which US$15 million are funded.
- Economic impacts linked to the crisis:
  - Real exports of coffee and cocoa decreased by about 10 percent in 2017.
  - Coffee export volumes declined by 72 percent in the first quarter of 2018 (y/y).
  - Tax revenues decreased by 8–9 percent in both anglophone regions in 2017 compared with 2016.
  - Additional security expenses: 0.4 percent of GDP in 2017 and at least 0.2 percent of GDP in 2018.

### Medium-term outlook and key macro projections
- Real GDP projections (annual): 2016: 4.5; 2017: 3.7; 2018: 3.2; 2019: 4.2; 2020: 4.0; 2021: 4.5; 2022: 4.8; 2023: 5.0 (additional table entries include 5.2, 5.4).
- Inflation (period average) (annual): 2016: 0.9; 2017: 0.5; 2018: 0.6; 2019: 1.0; 2020: 1.1; 2021: 1.3; 2022: 2.0; 2023: 2.0.
- Current account balance (percent of GDP): 2016: -3.2; 2017: -2.6; 2018: -2.7; 2019: -2.5; 2020: -3.0; 2021: -2.9; 2022: -2.8; 2023: -2.8.
- WEO oil price (US$/barrel) (annual): 2016: 42.8; 2017: 52.8; 2018: 62.3; 2019: 58.2; 2020: 55.6; 2021: 54.1; 2022: 53.6; 2023: 53.6.

### Risks (external and domestic)
- External risks:
  - Volatile commodity prices.
  - Incomplete CEMAC regional adjustment.
  - Tighter global financial conditions pressuring banks exposed to regional sovereign bonds.
- Domestic risks:
  - Continued security threats in anglophone and northern regions.
  - Fiscal slippages related to the 2018 elections and the 2019 CAN.
  - Delays in large infrastructure projects.
  - Materialization of SOE contingent liabilities.

### Revised 2018 budget, fiscal consolidation and key fiscal figures
- Revised 2018 overall deficit target: 2.6 percent of GDP versus 2.3 percent of GDP at 1st ECF review.
- Revised 2018 consolidation: 2.4 percent of GDP in 2018; revenue improvement from 2017 of 0.4 percent of GDP.
- Revised 2018 accommodates previously unbudgeted higher current spending of 0.7 percent of GDP.
- Larger cash deficit (4 percent of GDP) includes net domestic arrears reduction of CFAF 94 billion in 2018.
- Stock of domestic arrears: reduced from CFAF 530 billion at end-March to CFAF 268 billion at end-May; program targets: CFAF 282 billion for end-June 2018 and CFAF 188 billion for end-December 2018.
- Revised projection for current expenditure is 0.7 percent of GDP higher to accommodate subsidies: SONARA (0.4 percent of GDP), ENEO (0.1 percent of GDP), elections (0.1 percent of GDP).
- Capital expenditure: remained the same as in original budget.
- Financing plan adjustments:
  - Issuance of CFAF 150 billion medium-term infrastructure bonds as planned.
  - Stepped-up issuance of short-term T-bills; average maturity of domestic debt about 3 years.
- Statutory advances’ special escrow account: limited intra-quarter drawings and a gradual net draw-down; government to strictly limit drawings to a maximum of CFAF 50 billion per quarter for short-term liquidity management.

### Revenue measures in the revised 2018 budget (Text Table 3)
- New excises and airport taxes: CFAF 110.0 bn (0.06 percent of GDP)
- VAT collection on state budget: CFAF 200.0 bn (0.10 percent of GDP)
- Enhanced collection from crossing tax and customs information: CFAF 80.0 bn (0.04 percent of GDP)
- Operationalization of 7 new tax centers for medium-sized enterprises: CFAF 30.0 bn (0.02 percent of GDP)
- Improving tax collection: CFAF 20.0 bn (0.01 percent of GDP)
- Cross debt operations: CFAF 120.0 bn (0.06 percent of GDP)
- Recovery of SONARA tax arrears: CFAF 150.0 bn (0.08 percent of GDP)
- Other: CFAF 270.0 bn (0.14 percent of GDP)
- Total projected yield: CFAF 980.0 bn (0.50 percent of GDP)
- Note: Additional measures needed to increase non-oil revenue to 13.4 percent of GDP given one-off 2017 VAT arrears collection.

### Changes in fiscal aggregates (selected table entries)
- Total revenue and grants (percent of GDP): Est. 2016: 15.0; Est. 2017: 14.6; Budget 2018 Est.: 15.4; CR 18/9 Est.: 15.1; Proj. 2018: 15.1; CR 18/9 Proj.: 15.8.
- Public debt (percent of GDP): 2016: 33.3; 2017: 31.9; 2018: 38.2; 2019: 32.0; 2020: 38.7; 2021: 38.6; 2022: 37.9; 2023: 36.6.
- Total expenditure (percent of GDP): 2016: 21.2; 2017: 17.7; 2018 (various entries): 20.4, 17.7, 17.5, 18.4.
- Capital expenditure (percent of GDP): 2016: 8.4; 2017: 6.5; 2018 entries: 8.8, 6.2, 6.2, 6.2.
- Overall balance (payment order basis, incl. grants) (percent of GDP): 2016: -6.2; 2017: -3.1; 2018 entries: -5.0, -2.6, -2.3, -2.6.
- Memo: Unpaid government obligations: 2016: 596 (CFAF billions); 2017: 539; 2018 entries: 711, 393, 512.

### Audit of domestic arrears and clearance plan (Box 2)
- Audit findings for 2000–16 arrears as of end-2017:
  - Remaining eligible stock: CFAF 182.7 billion.
  - Validated: CFAF 176.4 billion.
- Composition of validated arrears (percent shares for 2016):
  - Debt to individuals and companies: 8%
  - Counterpart funds: 49%
  - Debt to local and public entities: 19%
  - Subsidies and transfers: 5%
  - Others: 19%
- Accounting weaknesses identified:
  - Domestic arrears based on physical documents not captured by accounting system: CFAF 1.6 billion.
  - Payment arrears in accounting system without related documents: over CFAF 1 trillion (6.4 percent of GDP).
- Authorities’ clearance plan:
  - Pay debt to companies and individuals and unpaid contributions in full; gradual payment of counterpart funds.
  - First tranche: CFAF 32 billion (0.2 percent of GDP) made available by the Ministry of Finance.

### Public financial management (PFM) weaknesses and reforms
- Causes of 2017 spending overruns:
  - Weak budgetary controls; reporting lags; lack of systematic data reconciliation among spending agencies.
  - Continued use of exceptional spending procedures (cash and treasury advances, provisional commitments).
  - Uncategorized spending reached 3.5 percent of GDP or 20 percent of the budget at end-February.
- Prior actions and reforms:
  - Supplementary 2018 budget submitted to Parliament (prior action).
  - Implementation circular limiting exceptional spending procedures; monthly regularization requirement; quantitative limit on exceptional procedures (prior action).
  - Measures to expand TSA coverage and reduce payment delays to suppliers (June SB).
  - Monthly reconciliations between agencies; monthly reports on disbursements and requests of funds from external creditors.
  - Draft laws transposing CEMAC Directives on finance laws and PFM transparency submitted to Parliament in June (prior action).

### Public investment and spending efficiency
- Public investment efficiency estimated at about 50 percent.
- Administrative costs in 2015: 16 percent of total current spending and 29 percent of total capital spending.
- About 1/3 of total investment over 2015–16 (around 3 percent of GDP over 2015–16) cannot be considered as resulting in fixed capital formation.
- Estimated efficiency gap: 51 percent (versus 27 percent average in other LIC/emerging markets).

### Fiscal multipliers and implications (Annex II)
- SVAR estimates (responses reported as "Impact", "After 2 years", "Peak"):
  - Current spending multipliers: Impact 0.8; After 2 years 1.6; Peak 0.8; REO 0.5
  - Investment multipliers: Impact 0.1; After 2 years 0.8; Peak 0.1; REO 0.7
  - Revenue multipliers: Impact 0.0; After 2 years 0.2; Peak 0.0; REO -
- Interpretation:
  - Estimated multipliers are overall small; multiplier on recurrent spending is largest.
  - Revenue multiplier statistically insignificant.
- Policy implication: improve quality of spending, particularly public investment, and broaden the tax base.

### Tax potential and revenue mobilization
- Tax-to-GDP ratio increased from an average of 11.3 percent in 2002–12 to 13.2 percent in 2013–17.
- Cross-country analysis suggests tax-to-GDP ratio can reach 19–21 percent, implying additional potential of at least 5–7 percent of GDP.
- FAD TA indicates tax administration gains can reach up to 2.5 percent of GDP.
- Authorities assessed tax expenditures at 2.4 percent of GDP in 2016 and plan to gradually reduce them starting in 2019.
- Authorities’ commitments:
  - Implement tax-base broadening measures starting in 2019, including property tax and tax expenditure reforms.
  - Enhance VAT efficiency, increase VAT threshold, simplify regimes for small enterprises, create new tax centers (CIMEs), pursue cooperation between tax and customs, and dematerialize procedures.
  - Additional measures expected to reduce recurrent spending by about 0.6 percent of GDP.

### Public debt developments and debt sustainability
- Total public and publicly guaranteed debt increased from a revised 33.3 percent of GDP in 2016 to 38.2 percent in 2017.
- 2017 split: Domestic: 12.6 percent of GDP; External: 25.6 percent of GDP.
- SONARA debt included in DSA: reported as 3.0 percent of GDP in one entry; elsewhere noted as 4 percent of GDP.
- Contracted-but-undisbursed debt (SENDs): CFAF 4.5 trillion or 23 percent of GDP in 2017 (up from 20 percent of GDP at end-2016).
- Stock of signed but undisbursed borrowing: 21.5 percent of GDP at end-March 2018.
- Public debt projections under program:
  - Public debt would peak at 38.7 percent of GDP and then gradually decline to about 33.6 percent of GDP by 2023 (program scenario).
- DSA assessment:
  - Policy-dependent thresholds breached: PV of external PPG debt-to-exports reached 103 percent in 2017.
  - Assessed risk of debt distress: high.
- Policy imperatives:
  - Steadfast fiscal consolidation.
  - Tilt new borrowing toward concessional debt.
  - Reduce SENDs (plan to reduce SENDs by one-third by end-2018).
  - Strengthen monitoring of SOE debt and contingent liabilities.

### SOE risks and SONARA specifics
- SOE debt: 12.5 percent of GDP in 2016.
- SONARA’s debt: reached 3½ percent of GDP in 2016 (a quarter of total SOE debt in one note); other entries report SONARA total debt figures across years.
- SONARA’s refining capacity too small for viability; domestic retail fuel prices below cost since late 2017.
- Short-term SONARA measures:
  1. Completion of recapitalization process by July 31, 2018.
  2. Signing agreement on government/SONARA cross debts as at December 31, 2015.
  3. Signing minutes substantiating clearance of shortfalls/overpayments as of December 31, 2016 and December 31, 2017.
  4. Revision of petroleum products price structure and gas price structure.
  5. Redemption of SONARA securities (OTZ) by the government to repay 2013 supplier debt.
  6. Monthly clearance of the shortfall starting in July 2018 and settlement within 90 days.

### Financial sector soundness, liquidity and inclusion
- Banks are liquid; average capital ratio increased from 9 percent at end-2016 to 10.7 percent in March 2018.
- Capital ratio ranged between 10 and 16 percent excluding ailing banks; regulatory minimum: 8 percent.
- Exposure to CEMAC sovereign risk increased from 11 to 17 percent of total assets between 2014 and 2017.
- Stress test results (end-2017):
  - System-wide capital ratio could decline by 4.4 percentage points after a 25 percent haircut on Cameroonian government debt.
  - 3.5 percentage points decline from a 25 percent haircut on other CEMAC countries’ debt.
  - 2.7 percentage points decline from a full SONARA default.
- Liquidity: rising excess liquidity concentrated in non-CEMAC banks (114 percent excess liquidity before BEAC refinancing on average for 69 percent of system’s assets); CEMAC banks short of liquidity at -14 percent.
- Financial inclusion:
  - Only 12.2 percent of the population has an account at a financial institution (FINDEX 2014).
  - Mobile money accounts: 9 percent of adults in 2012 to about 28 percent in 2016.
  - Mobile money transactions estimated at CFAF 3.5 trillion (17.5 of GDP) up from CFAF 0.3 trillion in 2016.
  - Only 5 out of 12 banks provide mobile banking; MFIs not yet allowed to provide mobile money in current framework.
- Financial sector reforms and remedial actions:
  - Pricing methodology to purchase impaired assets updated with IMF TA.
  - Authorities to finalize evaluation of resolution options for ailing banks by August 2018.
  - Performance contract with management of the state-owned bank to be signed by July 2018.
  - Action plans to reduce NPLs and judicial improvements being finalized.

### Program financing, gaps and ECF disbursements
- Text Table 6. Financing Gap, 2017–20 (Total CFAF Billion):
  - Financing gap: 2017: 364; 2018: 334; 2019: 333; 2020: 40; Total: 1072.
  - IMF financing: 2017: 167; 2018: 81; 2019: 80; 2020: 40; Total: 368.
  - Budget support from other donors (Total: 704) with World Bank, EU, AfDB, France component breakdowns reported.
  - Residual financing gap (1-2-3): 2017–2020: 0s; Share of Fund financing: 2017: 46; 2018: 24; 2019: 24; 2020: 100; Total: 34.4.
- Table 9. Proposed Schedule of Disbursements Under the ECF Arrangement, 2017–20 (selected):
  - Total: 483.0 SDR million (in percent of quota entries provided).
  - Disbursement milestones and amounts include 16/26/2017 — 124.245; 12/15/2017 — 82.830; 6/30/2018 — 55.220; subsequent semiannual 55.220 tranches through 5/31/2020.
- Projected repayments to the Fund:
  - Repayments under the ECF-supported program remain below 0.2 percent of GDP during the program period and peak at 1.5 percent of exports and 1.2 percent of revenue in 2025–26 (Table 10).

### Program implementation, performance criteria and conditionality
- Program implementation underperformed original expectations in areas:
  - Nonobservance of the PC on non-oil primary balance at end-2017.
  - Missed PCs on disbursements of non-concessional loans and net BEAC financing.
  - IT on SNH direct interventions missed narrowly.
  - Most structural benchmarks met; some delayed (e.g., budget execution report, projects’ maturation guide circular, computerization of movable collateral register).
- Staff supports completion of the second review subject to:
  - Waivers of non-observance of specific end-December 2017 PCs.
  - Modification of end-June 2018 PCs and PC on disbursements of non-concessional project financing.
- Structural benchmarks and prior actions include:
  - Submission of supplementary 2018 budget to Parliament (prior action).
  - Publication of supplementary circular limiting exceptional spending (prior action).
  - Clearance of part of domestic payment arrears (CFAF 262 billion by end-May 2018, relative to a CFAF 212 billion target).

### Social spending, inclusion and gender considerations
- Social spending is low and ill-allocated; social assistance spending: less than 0.1 percent of GDP.
- Poverty and inequality (2014 National Household Survey):
  - Poverty rate: 37.5 percent (from 40.2 percent in 2001).
  - Inequality index increased from 42.2 to 46.6 over 2001–2014.
  - Three northern regions and the north-west region account for 74 percent of the total poor.
- Recommendations:
  - Scale up and target in-kind and cash transfers, expand coverage of cash transfer programs.
  - Increase health and education spending and redirect resources towards primary education and health care facilities in poorer regions.
  - Consider gender-responsive budgets; closing gender gaps could raise GDP per capita growth by 0.25 percentage point to up to 1 percentage point depending on comparator benchmarks.

### Key staff appraisal conclusions
- Regional stabilization improved but recovery fragile; Cameroon’s fiscal leadership is essential to bring deficit path in line with program objectives.
- Priorities emphasized by staff:
  - Strict enforcement of the revised budget implementation circular and limits on exceptional spending.
  - Progress toward TSA coverage and arrears reduction.
  - Save any oil windfall to build buffers.
  - Tilt new borrowing toward concessional debt and accelerate clearance of contracted but undisbursed debt.
  - Strengthen SOE governance, ensure cost-recovery pricing for utilities while protecting the poor.
  - Accelerate bank resolution measures, contain fiscal costs of bank rescues, and strengthen AML/CFT efforts.
  - Continue structural reforms to improve competitiveness and financial inclusion.

*Source: cr18235 — IMF staff report excerpts and Selected Issues Paper (Cameroon).*

### 1.   Security Risks and the Anglophone Region Crisis _________________________________________________ 6

### 1.   Security Risks and the Anglophone Region Crisis _________________________________________________ 6

### Overview
- Cameroon faces several security-related risks; the crisis in anglophone regions (North West and South West) is the dominant risk and has increased concerns about national stability.
- Other security risks include Boko Haram attacks in the Far North and instability related to a large number of refugees in the East.
- The anglophone population accounts for 20 percent of Cameroon’s total population of 25 million.

### Origins and Recent Escalation
- Roots: the current anglophone crisis stems from Cameroon’s unification in 1961 and the 1972 constitution that replaced federalism with a unitary state; anglophone populations have sought greater autonomy and rights.
- Timeline:
  - October 2016: strikes by lawyers and teachers, followed by a boycott of schools, protests, and ghost towns.
  - The movement evolved into an armed secessionist movement with violence on both sides, escalating in recent months to killings, detentions, burning and looting of villages, and kidnappings of government officials and civilians.
- Despite a heavy military presence, insecurity has spread and humanitarian costs have risen.

### Humanitarian Impact (reported estimates)
- More than 20,000 people have fled to Nigeria.
- 160,000 have become internally displaced persons (IDPs).
- Adds to an existing burden from 340,000 refugees from Nigeria and the Central African Republic.
- United Nations High Commission for Refugees estimates the cost of assisting refugees and IDPs in Cameroon has risen to US$87 million, of which only US$15 million are funded.

### Economic Effects and Quantified Impacts
- Real exports of coffee and cocoa (grown mostly in anglophone areas) decreased by about 10 percent in 2017.
- Coffee export volumes declined by 72 percent in the first quarter of 2018 (y/y).
- Tax revenues decreased by 8–9 percent in both anglophone regions in 2017 compared with 2016, due to lower economic activity and difficulties collecting taxes.
- Additional security expenses:
  - amounted to 0.4 percent of GDP in 2017,
  - and at least 0.2 percent of GDP in 2018.

### Implications for Fiscal Program and Macroeconomic Outlook
- The anglophone crisis contributes to spending and borrowing pressures that complicate implementation of the ECF-supported program.
- Program implementation in the second half of 2018 faces headwinds from:
  - continuing security concerns in the Lake Chad basin,
  - the anglophone crisis,
  - organization of presidential, legislative, and municipal elections,
  - preparations for hosting the 2019 African Nations soccer cup (CAN).
- Anecdotal evidence suggests a toll on the economy, but rigorous quantification is limited by lack of adequate data.

### Policy and Program Considerations (implicit from analysis)
- Persistence or escalation of the anglophone crisis would likely:
  - increase humanitarian and security expenditures beyond the reported 0.4 percent of GDP in 2017 and at least 0.2 percent of GDP in 2018;
  - depress economic activity and tax collection in affected regions (evidenced by 8–9 percent revenue declines in 2017);
  - reduce export performance for coffee and cocoa (observed declines of about 10 percent in 2017 and 72 percent in coffee exports in Q1 2018 (y/y));
  - complicate fiscal consolidation and the achievement of program fiscal targets.
- Maintaining the course on fiscal consolidation and reforms is imperative to support regional stabilization and recovery, given the fragility of the regional recovery and Cameroon’s prominent role in CEMAC adjustments.

*Source: cr18235 — Security Risks and the Anglophone Region Crisis (IMF).*

### Chapter I of the Selected Issues Paper (SIP) estimates fiscal multipliers for Cameroon.

### cr18235 - Chapter I of the Selected Issues Paper (SIP) estimates fiscal multipliers for Cameroon

### Medium-term outlook and external/domestic risks
- Real GDP projections (annual): 2016: 4.5; 2017: 3.7; 2018: 3.2; 2019: 4.2; 2020: 4.0; 2021: 4.5; 2022: 4.8; 2023: 5.0; (additional entries in table: 5.2, 5.4).
- Inflation (period average) (annual): 2016: 0.9; 2017: 0.5; 2018: 0.6; 2019: 1.0; 2020: 1.1; 2021: 1.3; 2022: 2.0; 2023: 2.0; (additional entries in table: 2.0, 2.0).
- Current account balance (percent of GDP) (annual): 2016: -3.2; 2017: -2.6; 2018: -2.7; 2019: -2.5; 2020: -3.0; 2021: -2.9; 2022: -2.8; 2023: -2.8; (additional entries: -2.9, -2.9).
- CEMAC reference balance (payment order basis, incl. grants) (annual): 2016: -5.4; 2017: -2.5; 2018: -4.5; 2019: -2.3; 2020: -2.8; 2021: -2.3; 2022: -1.6; 2023: -1.6; (additional entries: -1.6, -1.6).
- Public debt (percent of GDP) (annual): 2016: 33.3; 2017: 31.9; 2018: 38.2; 2019: 32.0; 2020: 38.7; 2021: 38.6; 2022: 37.9; 2023: 36.6; (additional entries: 35.1, 33.6).
- WEO oil price (US$/barrel) (annual): 2016: 42.8; 2017: 52.8; 2018: 62.3; 2019: 58.2; 2020: 55.6; 2021: 54.1; 2022: 53.6; 2023: 53.6; (additional entry: unspecified).
- Key upside and downside risks identified:
  - External risks: volatile commodity prices; incomplete CEMAC regional adjustment; tighter global financial conditions that could pressure banks exposed to regional sovereign bonds.
  - Domestic risks: continued security threats in anglophone and northern regions; fiscal slippages related to the 2018 elections and the 2019 CAN; delays in large infrastructure projects; materialization of SOE contingent liabilities.
- Policy stance on oil windfalls: staff and authorities agreed that any additional oil windfall should be saved given potential transitory nature and program risks.

### Fiscal consolidation, revised 2018 budget, and macro-fiscal figures
- Revised 2018 overall deficit target: 2.6 percent of GDP versus 2.3 percent of GDP at the time of the 1st ECF review.
- Revised 2018 consolidation: 2.4 percent of GDP in 2018; revenue improvement from 2017 of 0.4 percent of GDP based on new tax policy measures and enhanced revenue administration.
- Revised 2018 accommodates previously unbudgeted higher current spending of 0.7 percent of GDP related mainly to elections and energy subsidies.
- Larger cash deficit (4 percent of GDP) includes a net domestic arrears reduction of CFAF 94 billion in 2018.
- Stock of domestic arrears: reduced from CFAF 530 billion at end-March to CFAF 268 billion at end-May; program targets: CFAF 282 billion for end-June 2018 and CFAF 188 billion for end-December 2018.
- Revised projection for current expenditure is 0.7 percent of GDP higher to accommodate subsidies for SONARA (0.4 percent of GDP), ENEO (0.1 percent of GDP), and elections (0.1 percent of GDP).
- Revised 2018 projection for non-oil revenue is based on improved 2017 base and new revenue measures totaling 0.4 percent of GDP.
- Capital expenditure: remained the same as in original budget.
- Financing plan adjustments: issuance of CFAF 150 billion medium-term infrastructure bonds as planned; stepped-up issuance of short-term T-bills to attract non-bank investors and develop the secondary market; average maturity of domestic debt about 3 years (concern that increased short-term issuance could raise rollover risks and borrowing costs).
- Statutory advances’ special escrow account: to be used primarily for treasury management, with limited intra-quarter drawings and a very gradual net draw-down.

### Revenue measures in the revised 2018 budget (Text Table 3)
- New excises and airport taxes: CFAF 110.0 bn (0.06 percent of GDP)
- VAT collection on state budget: CFAF 200.0 bn (0.10 percent of GDP)
- Enhanced collection from crossing tax and customs information: CFAF 80.0 bn (0.04 percent of GDP)
- Operationalization of 7 new tax centers for medium-sized enterprises: CFAF 30.0 bn (0.02 percent of GDP)
- Improving tax collection: CFAF 20.0 bn (0.01 percent of GDP)
- Cross debt operations: CFAF 120.0 bn (0.06 percent of GDP)
- Recovery of SONARA tax arrears: CFAF 150.0 bn (0.08 percent of GDP)
- Other: CFAF 270.0 bn (0.14 percent of GDP)
- Total revenue (projected yield): CFAF 980.0 bn (0.50 percent of GDP)
- Note: Additional measures needed to increase non-oil revenue to 13.4 percent of GDP given one-off 2017 VAT arrears collection.

### Changes in the revised 2018 budget (Text Table 4 key figures)
- Total revenue and grants (percent of GDP): Est. 2016: 15.0; CR 18/9 Est. 2017: 14.6; Budget 2018 Est.: 15.4; CR 18/9 Est.: 15.1; Proj. 2018: 15.1; CR 18/9 Proj.: 15.8.
- Oil sector revenue (percent of GDP): 2016: 2.2; 2017: 1.9; 2018 budget/est/proj entries include 1.9, 2.1, 1.8, 2.1.
- Non-oil sector revenue (percent of GDP): 2016: 12.5; 2017: 12.4; 2018 entries: 13.1, 13.0, 13.0, 13.4.
- Total expenditure (percent of GDP): 2016: 21.2; 2017: 17.7; 2018 entries: 20.4, 17.7, 17.5, 18.4.
- Current expenditure (percent of GDP): 2016: 12.6; 2017: 11.2; 2018 entries: 11.5, 11.4, 11.2, 12.2.
  - Wages and salaries (percent of GDP): 2016: 5.0; 2017: 4.9; 2018 entries: 5.1, 4.9, 4.9, 4.9.
  - Goods and services (percent of GDP): 2016: 4.3; 2017: 3.4; 2018 entries: 3.8, 3.8, 3.7, 4.1.
  - Subsidies and transfers (percent of GDP): 2016: 2.5; 2017: 1.9; 2018 entries: 1.8, 1.8, 1.8, 2.3.
  - Interest (percent of GDP): 2016: 0.8; 2017: 1.0; 2018 entries: 0.9, 0.8, 0.8, 0.8.
- Capital expenditure (percent of GDP): 2016: 8.4; 2017: 6.5; 2018 entries: 8.8, 6.2, 6.2, 6.2.
  - Domestically financed investment (percent of GDP): 2016: 5.9; 2017: 3.3; 2018 entries: 4.9, 3.4, 3.4, 3.4.
  - Foreign-financed investment (percent of GDP): 2016: 2.6; 2017: 3.2; 2018 entries: 3.9, 2.9, 2.9, 2.9.
- Overall balance (payment order basis, incl. grants) (percent of GDP): 2016: -6.2; 2017: -3.1; 2018 entries: -5.0, -2.6, -2.3, -2.6.
- Overall balance (cash basis, incl. grants) (percent of GDP): 2016: -5.1; 2017: -3.9; 2018 entries: -4.6, -3.5, -4.0 (other adjustments reported in table).
- Memo items (CFAF billions):
  - Unpaid government obligations: 2016: 596; 2017: 539; 2018 entries: 711, 393, 512.
  - Float: 2016: 101; 2017: 101; 2018 entries: 429, 101, 325.
  - Arrears: 2016: 495; 2017: 438; 2018 entries: 282, 292, 188.

### Audit of domestic arrears (Box 2)
- Audit findings for 2000–16 arrears as of end-2017:
  - Remaining eligible stock: CFAF 182.7 billion.
  - Validated: CFAF 176.4 billion.
- Composition of validated arrears (percent shares reported for 2016):
  - Debt to individuals and companies: 8%
  - Counterpart funds: 49%
  - Debt to local and public entities: 19%
  - Subsidies and transfers: 5%
  - Others: 19%
- Audit identified accounting weaknesses:
  - Domestic arrears based on physical documents but not captured by accounting system: CFAF 1.6 billion.
  - Payment arrears in accounting system without related documents: over CFAF 1 trillion (6.4 percent of GDP).
- Authorities’ proposed clearance plan:
  - Pay debt to companies and individuals and unpaid contributions in full, followed by gradual payment of counterpart funds based on project needs.
  - A first tranche of CFAF 32 billion (0.2 percent of GDP) made available by the Ministry of Finance.

### Public financial management (PFM) weaknesses and reforms
- Causes of 2017 spending overruns:
  - Weak budgetary controls, reporting lags, lack of systematic data reconciliation among spending agencies.
  - Continued use of exceptional spending procedures (cash and treasury advances, provisional commitments).
  - Lack of comprehensive reporting hindered monitoring of foreign-financed disbursements.
  - Uncategorized spending reached 3.5 percent of GDP or 20 percent of the budget at end-February.
- Prior actions and reforms to strengthen fiscal discipline:
  - Supplementary 2018 budget submitted to Parliament (prior action).
  - Implementation circular limiting exceptional spending procedures and strengthening reporting; monthly regularization requirement; quantitative limit (new IT) on share of non-interest domestic expenditures executed under exceptional procedures (prior action).
  - Measures to expand coverage of the treasury single account (TSA) and reduce payment delays to suppliers (June SB).
  - Monthly reconciliations between all agencies for consistency of accounting and statistical fiscal data; FAD mission identified measures to address discrepancies (new July SB).
  - Monthly reports on disbursements and requests of funds from external creditors to improve monitoring of foreign-financed projects (new July SB).
  - Further reductions of balances in correspondent accounts (new August SB).
  - Draft laws implementing CEMAC Directives on finance laws and on transparency and governance in PFM submitted to Parliament in June for implementation starting in 2019 (prior action).

### Growth, inclusiveness, and fiscal policy priorities
- Three key areas to unlock growth potential and resilience:
  - Make growth more inclusive by enhancing redistributive potential of fiscal policy and removing barriers to women’s participation.
  - Address fiscal and financial risks, including resolving ailing banks and reducing high nonperforming loans.
  - Accelerate reforms to support diversification and regional integration by improving the business environment and boosting access to finance.
- Spending efficiency and social outcomes:
  - Public investment efficiency estimated at about 50 percent (Annexes II and III).
  - Social spending is low and ill-allocated; high administrative costs for current and capital spending; staff's empirical finding of low fiscal multipliers.
  - Poverty and inequality indicators (2014 National Household Survey): poverty rate 37.5 percent (from 40.2 percent in 2001); inequality index increased from 42.2 to 46.6 over 2001–2014.
  - Regional disparities with concentration of poverty in rural areas.
  - Targeted in-kind and cash transfers effective in reducing poverty and inequality and supporting women; indirect transfers (electricity and fuel subsidies) and tax expenditures are ineffective and regressive.
- Tax potential (Box 3):
  - Tax-to-GDP ratio increased from an average of 11.3 percent in 2002–12 to 13.2 percent in 2013–17.
  - Cross-country analysis suggests Cameroon’s tax-to-GDP ratio can reach 19–21 percent, implying an additional potential of at least 5–7 percent of GDP.
  - FAD technical assistance indicates tax administration gains can reach up to 2.5 percent of GDP.
  - Authorities assessed tax expenditures at 2.4 percent of GDP in 2016 and plan to gradually reduce them starting in 2019.
- Authorities’ commitments and measures:
  - Implement substantive tax-base broadening measures starting in 2019, including property tax and tax expenditure reforms (MEFP ¶24, 27).
  - Enhance VAT efficiency, increase VAT threshold, simplify tax regime for small enterprises, create new tax centers for medium-sized enterprises, pursue cooperation between tax and customs administrations, simplify and dematerialize procedures.
  - Additional measures expected to reduce recurrent spending by about 0.6 percent of GDP, including ongoing physical count of civil servants and cost-saving measures on goods and services mandated by a Prime Minister’s circular (MEFP ¶20).
  - Staff emphasized importance of saving any additional oil windfall to create buffers against risks.

*Source: Chapter I, Selected Issues Paper for Cameroon (cr18235).*

### 26.      Reforms to address spending inefficiencies, scale up social spending and improve the

### 26.      Reforms to address spending inefficiencies, scale up social spending and improve the

### Spending efficiency and social spending: recommendations and implementation
- Prioritize measures to reduce high administrative costs in current and capital spending by streamlining processes and eliminating overlapping missions.
- Continue implementation of key recommendations from the PIMA on improving the selection, budgeting, and enhancing monitoring of investment projects.
- Reform administered energy prices to minimize market distortions and direct and indirect costs to the state while increasing direct subsidies or transfers to poor households.
- Gradually eliminate tax expenditures; these measures would be both revenue-enhancing and progressive.
- Expand the coverage of cash transfer programs.
- Increase health and education spending and redirect resources towards primary education and health care facilities in poorer regions to support women and improve spending efficiency.
- Consider more gender-responsive budgets.

Key implementation notes from the authorities:
- Progress reported on recommendations related to tax expenditures, the wage bill (rationalizing non-wage benefits), and public investment (new procurement code).
- Interim Growth and Employment Strategy focuses on: health (expanding performance-based financing to health centers, increasing availability and reduce price of drugs), education (expanding vocational education and training, reforming the schoolbook policy), gender (incorporating gender in sector policies), and social protection (scaling up the cash transfer program, revising the National Social Protection Strategy).
- Authorities are transposing signed international treaties on gender equality into domestic law.

### Addressing gender gaps — findings and potential economic gains (Box 4)
- Progress and gaps:
  - A gender-friendly electoral law adopted in 2012 increased women’s representation in parliament; legal reforms improved the gender inequality index (GII) to just above the SSA average.
  - Signed international treaties on gender equality promotion are yet to be translated into law.
  - Legal marriage age is 15 for women and 18 for men; about 40 percent of women married before age 18.
  - Other legal barriers deter women’s employment and management of physical assets.
  - Public health and education expenditure is low, inefficient and unevenly allocated across regions.
  - Cameroon’s budget is gender neutral; more resources could be allocated to improve women’s conditions.
- Estimated economic gains:
  - GDP per capita growth could increase by ¼ percentage point if Cameroon’s GII score were brought to the SSA average.
  - GDP per capita growth could increase by up to 1 percentage point if brought to the level of the five main emerging Asian countries (Indonesia, Malaysia, Thailand, Philippines and Vietnam) or the five leading Latin American economies (Brazil, Chile, Colombia, Mexico, and Peru).

### Maintaining debt sustainability — status, projections, and risks
- Public debt developments:
  - Public debt stock increased by 5 percentage points of GDP since 2016.
  - Under the program scenario, public debt would peak this year at 38.7 percent of GDP and then gradually decline to about 33.6 percent of GDP by 2023.
- Borrowing composition and limits:
  - Authorities contracted new non-concessional debt amounting to 63 percent of the annual limit in January-May 2018.
  - Staff and authorities agreed to increase the concessional borrowing limit by CFAF 90 billion in 2018, while keeping the cumulative concessional borrowing broadly unchanged.
- Disbursement and undisbursed loans:
  - Stock of signed but undisbursed borrowing stood at 21.5 percent of GDP at end-March 2018.
  - A Ministry of Economy and CNDP study found CFAF 3,200 billion or two thirds of the SENDs linked to nonperforming projects.
  - Staff urged preparing a plan to reduce the SENDs by one-third by end-2018 and make meaningful progress in reducing their stock by September.

### Containing fiscal risks from contingent liabilities and SOEs
- SOE fiscal risks:
  - SOE debt increased to reach 12.5 percent of GDP in 2016.
  - SONARA accounts for the largest share of SOE debt; SONARA’s debt reached 3½ percent of GDP in 2016 or a quarter of total SOE debt.
  - SONARA’s refining capacity is too small to ensure financial viability; domestic retail fuel prices have been below cost since late 2017.
- Policy recommendations for SOEs:
  - Improve SOE management and performance through financial audits and implementation of performance contracts.
  - Ensure regular payments of utility bills and budgeted subsidies to avoid straining SOEs’ cash positions.
  - Ensure prices of key utilities remain at least at cost-recovery levels while protecting the poorest.
  - Prepare regulations and a strategy to implement the two laws on SOEs and other public entities approved in 2017.

### Monitoring macrofinancial linkages and maintaining financial stability
- Banking sector indicators and vulnerabilities:
  - Banks are liquid; average capital ratio increased from 9 percent at end-2016 to 10.7 percent in March 2018.
  - Capital ratio ranged between 10 and 16 percent excluding ailing banks, compared to the regulatory minimum of 8 percent.
  - Exposure to CEMAC sovereign risk increased from 11 to 17 percent of total assets between 2014 and 2017.
- Stress test results (end-2017):
  - System-wide capital ratio could decline by 4.4 percentage points following a 25 percent haircut on Cameroonian government debt.
  - Decline of 3.5 percentage points due to a 25 percent haircut on other CEMAC countries’ debt.
  - Decline of 2.7 percentage points due to a full SONARA default.
- Liquidity and market functioning:
  - Rising excess liquidity concentrated in non-CEMAC banks: 114 percent excess liquidity before BEAC refinancing on average for 69 percent of system’s assets.
  - CEMAC banks are short of liquidity at -14 percent.
  - Reforms by BEAC and COBAC: tighter monetary stance, reforms of monetary policy operations, foreign exchange regulations and prudential policies.
  - Increase in BEAC policy rate in March 2017 and enhanced enforcement of foreign exchange regulations contributed to lower short-term capital outflows and supported NFA buildup.
  - Encouragement for development of an active interbank market and a secondary market for sovereign bonds.
- Financial sector reforms and remedial actions:
  - With IMF technical assistance, pricing methodology to purchase impaired assets updated.
  - Authorities to finalize evaluation of resolution options of ailing banks by August 2018; performance contract with management of the state-owned bank to be signed by July 2018.
  - Action plans to reduce non-performing loans and improvements in judicial treatment of financial sector disputes are being finalized.

### AML/CFT framework and tax evasion priorities
- Weaknesses:
  - 94 percent of suspicious transaction reports are submitted by banks; designated non-financial businesses or professions rarely send such reports to the National Agency for Financial Information.
  - Money laundering itself is not sufficiently pursued; authorities focus on tackling predicate crimes.
- Recommended actions:
  - Prepare a diagnostic and identify actions to address AML/CFT weaknesses.
  - In the context of the Yaoundé Declaration, prioritize international cooperation to better fight tax evasion.

### Boosting competitiveness — bottlenecks and reforms
- Key bottlenecks identified:
  - Infrastructure gaps: incomplete large infrastructure projects with gaps in road and electricity networks; need to complete ongoing priority projects before initiating new investments to preserve debt sustainability.
  - Difficult business environment: burdensome and often unclear regulations; complex tax procedures; weak governance.
  - High trade costs: border compliance costs higher than peers; 95 percent of total trade goes through the Douala port; priority to address inefficiencies (long dwell times, low storage fees, number of manual procedures) and perceptions of poor governance at customs.
  - Low access to financial services: only 12 percent of the population in Cameroon has a bank account compared to the SSA average of 29 percent.
- Supply- and demand-side constraints to financial inclusion:
  - Demand-side: cost, lack of revenue, religion, lack of trust, and large recourse to onerous informal finance.
  - Supply-side: information asymmetries, lack of available collateral, difficulties in enforcing contracts.
  - Mobile banking and micro-finance are filling some gaps but require adequate and effective regulation.
- Authorities’ reported reforms and measures:
  - Unbundling in the energy sector to facilitate investments in transmission and distribution.
  - 98 percent of tax declarations processed online.
  - Customs procedures account for only 47 percent of the time traders spent at the border; ongoing efforts to enhance governance and reduce time and cost.
  - Regular reconciliation of declared import values and customs receipts (new September SB) and intensified controls of exemptions (MEFP ¶27).
  - An electronic payment platform will be operational at the port later in the year.

*CAMEROON  INTERNATIONAL MONETARY FUND*

### 41.      The authorities agreed that enhancing financial inclusion was a key priority. They

### 41. The authorities agreed that enhancing financial inclusion was a key priority. They

### Financial inclusion — current status and reforms
- Overall access to financial services in Cameroon is low with significant recourse to informal services.
- Access to formal financial services in Cameroon is among the lowest in SSA.
- 38 percent of total bank assets and more than half of the licensed MFIs in the CEMAC region are located in Cameroon.
- The 2014 FINDEX survey shows that only 12.2 percent of the population has an account at a financial institution.
- More than half of the adult population relies on informal finance.
- Access to finance is better for men and people at higher education and income levels, and formally-employed; however, the gender gap is reversed at higher education levels, for formal employment and use of mobile banking services.

- Ongoing reforms and actions the authorities pointed to:
  - Promote wider access to creditor databases.
  - Computerize the movable collateral registry (reprogrammed December SB) and the cadaster.
  - Training of judges for resolving banking conflicts.
  - Revising the national financial inclusion strategy, based on a recent FINSCOPE survey.
  - Cooperation with the BEAC to ensure consistency of national and regional initiatives and to develop information platforms.
  - Full implementation of the 2017 COBAC regulation on micro-finance institutions.
  - Review of the business model of the public SME bank before August 2018 (new SB) with donors’ support to enhance SMEs’ access to financial services.

### Mobile money and digital finance
- Mobile money initiated in 2012 has potential to significantly boost financial inclusion.
- Mobile money accounts increased from 9 percent of adults in 2012 to about 28 percent in 2016, with only a quarter of registered cellphone users using mobile banking, and it continued to grow in 2017.
- Mobile money transactions are estimated to have reached CFAF 3.5 trillion (17.5 of GDP) up from CFAF 0.3 trillion in 2016.
- Only 5 out 12 banks are providing mobile banking services at the moment and microfinance institutions are not yet allowed to do so.

### Program modalities, corrective measures, and fiscal controls
- Based on the strength of corrective measures, authorities request waivers for non-observance of three end-2017 performance criteria.
- Prior actions implemented ahead of the Board meeting include:
  - A supplementary budget in line with the program was submitted to Parliament on June 11.
  - A supplementary circular to strengthen budget controls was published on June 21.
  - The total stock of arrears was reduced by CFAF 262 billion by end-May as compared to end-March and to a CFAF 212 billion target.
  - Draft laws to transpose two CEMAC directives (transparency and good governance in public finances’ management; financial regime of the government and other public entities) were submitted to Parliament on June 20.

- Requests and proposals:
  - Modifications to three end-June 2018 performance criteria are requested and new structural benchmarks through end-2018 are proposed.
  - End-December 2018 PCs and end-September 2018 and end-March 2019 ITs (including a new IT on exceptional spending procedures) are proposed.
  - Modification requested for PCs on: ceiling on the net borrowing of the central government from the central bank excluding IMF financing; ceiling on the net domestic financing of the central government excluding IMF financing; and the PC on disbursements of non-concessional project financing (to include all disbursements of non-concessional project financing).
  - New SBs proposed to:
    - (i) strengthen revenue mobilization, budgetary execution and treasury management;
    - (ii) contain debt sustainability risks and contingent risks;
    - (iii) accelerate the bank resolution process and promote access to finance;
    - (iv) improve governance and the business climate.

### Regional central bank, supervisory authorities, and policy assurances
- The BEAC and COBAC have pursued implementation of policy commitments and provided new policy assurances in support of CEMAC countries’ programs.
- Implemented commitments included tighter monetary policy, elimination of statutory advances, and maintaining firm control over extension of credit to banks.
- Regional NFA accumulation up to December 2017 was in line with projections; corrective actions are being implemented following underperformance in early 2018.
- BEAC provided new policy assurances including:
  - Completion by end-2018 of the modernization of the monetary policy operations framework.
  - Submission (for adoption) to the UMAC ministerial committee by end-2018 of revised foreign exchange regulations.
  - Commitment to implement an adequately tight monetary policy together with member states’ implementation of adjustment policies in IMF-supported programs.
- These assurances are critical to rebuilding sufficient external reserves cover for regional external sustainability and for Cameroon.

### Financing assurances (next 12 months) and Text Table 6 figures
- Budget support commitments totaling CFAF 135 billion for 2018 from the World Bank, France and the European Union are confirmed, with most disbursements planned in the second half of 2018.
- The African Development Bank disbursed CFAF 118 billion in January 2018 for its 2017 commitment.

Text Table 6. Cameroon: Financing Gap, 2017–20 (Total CFAF Billion)
- 1. Financing gap
  - 2017: 364
  - 2018: 334
  - 2019: 333
  - 2020: 40
  - Total: 1072
- 2. IMF financing
  - 2017: 167
  - 2018: 81
  - 2019: 80
  - 2020: 40
  - Total: 368
  - Percent of quota
    - 2017: 75
    - 2018: 40
    - 2019: 40
    - 2020: 20
    - Total: 175
- 3. Budget support from other donors
  - 2017: 197
  - 2018: 253
  - 2019: 253
  - 2020: 0
  - Total: 704
  - World Bank
    - 2017: 113
    - 2018: 53
    - 2019: 52
    - 2020: 0
    - Total: 218
  - European Union
    - 2017: 19
    - 2018: 16
    - 2019: 23
    - 2020: 0
    - Total: 59
  - African Development Bank
    - 2017: 0
    - 2018: 118
    - 2019: 112
    - 2020: 0
    - Total: 230
  - France
    - 2017: 66
    - 2018: 66
    - 2019: 66
    - 2020: 0
    - Total: 197
- 4. Residual financing gap (1-2-3)
  - 2017: 0
  - 2018: 0
  - 2019: 0
  - 2020: 0
  - Total: 0
  - Share of Fund financing
    - 2017: 46
    - 2018: 24
    - 2019: 24
    - 2020: 100
    - Total: 34.4

### Repayment capacity and safeguards
- Repayments under the ECF-supported program will remain below 0.2 percent of GDP during the program period, and peak at 1.5 percent of exports and 1.2 percent of revenue in 2025–26 (Table 10).
- A full safeguards assessment under the four-year cycle for regional central banks was completed in August 2017.
  - The assessment noted positive steps by the BEAC to strengthen governance through amendments to its charter’s provisions and plans to strengthen financial reporting transparency through full transition to IFRS.
  - The BEAC continues to implement outstanding recommendations from the 2017 assessment.

### Statistical and data issues
- Data provision is broadly adequate; authorities working with development partners to improve quality, coverage and timeliness of key macroeconomic data.
- Notable actions:
  - Rebasing of national accounts implemented in 2017.
  - Ongoing improvements in the quality of balance-of-payments data.
  - TA in external sector statistics should support capacity development to allow production of international investment positions (IIPs).
- Fiscal data issues and priorities:
  - Authorities are beginning to expand coverage beyond central government.
  - Enhancing the quality and timeliness of fiscal data on central government operations is a key short-term priority.
  - Inconsistencies between different data sources and lags in data reconciliation, and the resort to exceptional procedures which accounted for around 20 percent of total expenditure in 2017 delayed the preparation of the final 2017 fiscal report to end-May.
  - A Fund expert mission in June 2018 supported efforts to enhance accounting of fiscal operations.

### Staff appraisal — key findings and recommendations
- Regional stabilization and fragility:
  - Coordinated efforts since December 2016 stabilized the region, but the recovery remains fragile.
  - BEAC reserves are stabilizing supported by adjustment and external financing, but adjustment has been uneven across CEMAC.
- Fiscal leadership and consolidation:
  - Cameroon’s leadership in bringing its fiscal deficit path back in line with program objectives is essential.
  - IMF staff welcomes strong measures to reprofile adjustment and strengthen expenditure controls while maintaining non-oil revenue mobilization objectives.
  - Staff urges the authorities to save any windfall from higher oil prices.
- Budget execution and governance:
  - Enhancing controls over budget execution is key to adhering to the revised 2018 budget deficit target.
  - Staff welcomes the revised budget implementation circular; new provisions limiting resort to exceptional spending procedures should be strictly enforced.
  - Progress towards the Single Treasury Account would support liquidity management and domestic arrears reduction.
  - Staff urges implementation of laws transposing two key CEMAC PFM directives starting in 2019 to enhance fiscal governance and transparency.
- Revenue mobilization and social spending:
  - Authorities encouraged to expand the non-oil revenue base while enhancing spending efficiency.
  - Starting with the 2019 budget, move forward with planned expansion in property tax coverage and reduction of tax exemptions.
  - Improve efficiency of existing social spending programs and gradually increase total social spending to reduce poverty, inequality and gender gaps.
- Debt and SOE risks:
  - Public debt has increased more rapidly than envisaged and is more vulnerable to shocks; staff urges tilting new borrowing toward concessional debt and accelerate clearing contracted but undisbursed debt.
  - Enhance monitoring of SOE debt and contingent liabilities; short-term measures do not restore SONARA’s financial viability, and higher oil prices would further strain its cash position and increase budgetary risks.
  - Reform administered prices to ensure cost-recovery for key public utilities while protecting the poor; hold SOEs accountable for performance while ensuring effective payment of owed subsidies and utility bills to SOEs to avoid further accumulation of cross debts.
- Financial sector and inclusion reforms:
  - Implement measures to support financial stability in a timely manner; avoid further delays in structural benchmarks.
  - For ailing banks, select options that minimize fiscal costs.
  - Move ahead with initial plans to train only a limited number of judges on banking conflicts to create poles of expertise.
  - Mobilize the AML/CFT framework, ensuring banks implement measures preventing laundering of proceeds of corruption.
  - Complete ongoing priority infrastructure projects, enhance predictability of the business environment, address non-tariff barriers including perceptions of weak governance.
  - Proceed with the revision of the financial inclusion strategy and with the design and implementation of regulations for micro-finance and mobile banking consistent with their continued expansion while maintaining financial stability.

### Program review and conditionality
- Staff supports the authorities’ request for completion of the second review under the Extended Credit Facility, subject to:
  - Waivers of non-observance of the end-December quantitative performance criteria on the floor on the non-oil primary fiscal balance, the ceiling on net borrowing of the central government from the central bank excluding IMF financing and the ceiling on the disbursement of non-concessional external debt contracted as of the date of program approval.
  - Modification of the end-June 2018 performance criteria on the ceiling on the net borrowing of the central government from the central bank excluding IMF financing and the ceiling on the net domestic financing of the central government excluding IMF financing.
  - Modification of the performance criterion on disbursements of non-concessional project financing.
- Staff proposes completion of the third ECF review be conditional on implementation of critical policy measures at the union level, as established in the June 2018 union-wide background paper.

*IMF staff report content as provided.*

### 58.      It is proposed that the next Article IV consultation take place within 24 months in

### It is proposed that the next Article IV consultation take place within 24 months in

### Proposed timing
- It is proposed that the next Article IV consultation take place within 24 months in accordance with the Decision on Article IV Consultation Cycles Decision No. 14747–10/96.
- 24 months

### Real sector: growth and prices
- GDP at constant prices (annual percentage change): 4.5; 3.7; 3.2; 4.2; 4.0; 4.5; 4.8; 5.0; 5.2; 5.4
- Oil GDP at constant prices (annual percentage change): -3.7; -4.7; -17.2; 0.2; 1.0; -2.1; -2.2; -2.2; -2.6; -2.7
- Non-Oil GDP at constant prices (annual percentage change): 5.1; 4.3; 4.6; 8.4; 4.4; 4.9; 5.1; 5.4; 5.6; 5.7
- Consumer prices (average): 0.9; 0.5; 0.6; 1.0; 1.1; 1.3; 2.0; 2.0; 2.0; 2.0
- Consumer prices (eop): 0.3; 1.0; 0.8; 1.0; 1.1; 1.3; 2.0; 2.0; 2.0; 2.0
- Export volume (annual percentage change): -6.0; 0.8; -0.3; 3.2; 4.1; 3.8; 4.0; 4.6; 5.4; 5.6

### Fiscal sector: revenues, spending, deficits
- Total revenue (percent of GDP): 14.7; 14.3; 15.0; 15.5; 14.8; 15.5; 15.6; 15.6; 15.7; 15.9
- Oil sector revenue (percent of GDP): 2.2; 1.9; 1.9; 2.1; 1.8; 2.1; 1.9; 1.6; 1.6; 1.5
- Non-oil revenue (percent of GDP): 12.5; 12.4; 13.1; 13.4; 13.0; 13.4; 13.7; 13.9; 14.2; 14.4
- Total expenditure (percent of GDP): 21.2; 17.7; 20.4; 17.5; 18.4; 17.8; 17.3; 17.5; 17.5; 17.5
- Capital expenditure (percent of GDP): 8.4; 6.5; 8.8; 6.2; 6.2; 6.1; 5.9; 6.1; 6.1; 6.3
- Overall fiscal balance (payment order basis) excluding grants (percent of GDP): -6.5; -3.5; -5.3; -2.6; -2.9; -2.2; -1.8; -1.7; -1.7; -1.6
- Overall fiscal balance (cash basis) including grants (percent of GDP): -5.1; -3.9; -4.6; -3.5; -4.0; -2.9; -2.5; -1.5; -1.5; -1.4
- Non-oil primary balance (payment basis, percent of non-oil GDP): -7.9; -4.1; -6.3; -3.5; -4.0; -3.1; -2.3; -2.2; -2.1; -2.1
- Unpaid government obligations (CFAF billions, memo in Table 2a): levels reported in the table and discussed as remaining high; end-2017 audit resulted in the cancelation of CFAF 68 billion of arrears.

### Public debt and contingent liabilities
- Stock of public debt (percent of GDP): 33.3; 31.9; 38.2; 32.0; 38.7; 38.6; 37.9; 36.6; 35.1; 33.6
- Of which: external debt (percent of GDP): 22.6; 22.2; 25.6; 24.4; 26.3; 27.3; 27.0; 26.4; 25.9; 25.2
- Contingent liabilities from state-owned enterprises: described as remaining high, with SONARA identified as the major contributor to risks originating from SOEs.
- Trends from figures: declining value-added, increasing wages-to-sales ratios, cumulative net profits turning negative, rising government net payments to SOEs, and build-up of arrears and account receivables.

### External sector: trade, current account, reserves
- Current account balance excluding official grants (percent of GDP): -3.6; -3.0; -3.1; -2.9; -3.4; -3.3; -3.2; -3.2; -3.2; -3.2
- Current account balance including official grants (percent of GDP): -3.2; -2.6; -2.7; -2.5; -3.0; -2.9; -2.8; -2.8; -2.9; -2.9
- Trade balance (percent of GDP): -0.7; -0.7; -0.6; -0.8; -1.1; -1.4; -1.8; -2.1; -2.2; -2.2
- Exports, goods (CFAF billions): 2,725; 2,733; 2,675; 2,715; 2,610; 2,583; 2,572; 2,597; 2,647; 2,720
- Imports, goods (CFAF billions): -2,862; -2,877; -2,792; -2,877; -2,829; -2,883; -2,982; -3,120; -3,237; -3,350
- Gross imputed reserves (US$ billions, memorandum): 2.3; 2.9; 3.2; 3.0; 3.5; 3.7; 3.7; 3.8; 4.0; 4.2
- BEAC reserves and stabilization: figures and charts show overall balance of payments improving and reserves stabilizing.

### Monetary and financial developments
- Broad money (M2) annual percentage change: 5.5; 5.0; 5.9; 5.3; 5.5; 5.8; 6.6; 7.1; 7.5; 8.1
- Net foreign assets contribution to M2 (percentage points): -14.0; 1.9; 6.1; ...; -0.4; 0.9; 0.4; -1.0; 0.3; 1.7; 1.8 (as reported in the monetary survey)
- Credit to the private sector (annual percentage change): 7.2; 5.6; 2.3; 2.0; 19.0; 1.7; 4.6; 8.1; 4.6; 6.6; 5.8; 6.7; 8.6; 9.9; 11.0 (table reports series across years/projections)
- Banks' liquidity: improved starting in H2-2017; banks' refinancing from BEAC declined with a surge at end-Q1-2018.
- Yields and T-Bill rollover: net issuance and yield curve charts show improvements in rollover and a decline in borrowing costs.

### Financial sector soundness and inclusion
- Capital adequacy (Capital/risk-weighted assets, percent): 11.4; 10.1; 9.0; 9.5; 9.5; 9.3; 10.3; 10.7; 13.8; 15.5; 17.5 (Table 5 shows series with Q1-18 entries)
- Asset quality: non-performing loans/total loans reported across periods and noted as poor and worsened in Q1-2018.
- Profitability: Return on Equity (ROE) and Return on Assets (ROA) reported as positive and banks described as profitable.
- Financial inclusion: Cameroon among the lowest in SSA for account ownership; recourse to informal finance is large; access gaps for poor regions, poorest population segments, and less educated people. Barriers to account ownership dominated by: too far away; too expensive; lack documentation; lack trust; religious reasons; lack of money; family member already has one; cannot get one; no need for financial services.

### Gender and social indicators
- Gender Inequality Index (2010–15) shows improvement for Cameroon relative to CEMAC and SSA aggregates.
- Social Institutions and Gender Index (SIGI) and indicators (education, maternal mortality, early marriage prevalence) highlight underlying gender gaps that, if addressed (including raising women's marriage age), would contribute to higher GDP per capita growth and reduced inequality.
- Estimated annual average growth differentials attributed to gender gaps: Annual average growth differential: 2.7 percent from the ASEAN5, 1.8 percent for the LAC5, and 1.2 percent from SSA (figure annotations).

### Risk assessment and recommended policy responses
- Key risks identified include: weaker-than-projected global growth; lower energy prices; deterioration of regional security; contingent risks from SOEs; spillovers from other CEMAC countries; cyber attacks; financial conditions tightening.
- Recommended policy responses include:
  - Widen the non-oil tax base, increase efficiency of SONARA, and spur competition in the oil import sector.
  - Contain SOE risks by enhanced monitoring, timely reporting, and strategies to reduce state aid to SOEs.
  - Improve CEMAC regional integration and facilitate intra-regional trade; implement structural reforms to improve business climate and competitiveness.
  - Continue necessary fiscal consolidation and structural reforms to reduce external imbalances and boost investor confidence.
  - Enhance bank supervision and regulation; encourage development of fintech platforms to expand access to finance.
  - Enhance investment in IT systems and increase awareness of cyber security.
  - Provide space for higher security expenditure by curtailing unproductive public investments; prepare contingency plans for refugees with UNHCR.

*Source: Cameroonian authorities; BEAC; and IMF staff calculations and tables excerpted from the IMF staff report.*

### 1. Total financing requirement1280.928.41055.7915.31031.4954.81037.51165.21298.0

### 1. Total financing requirement1280.928.41055.7915.31031.4954.81037.51165.21298.0

### Major components of the total financing requirement
- Current account deficit: 694.1613.0541.3615.3636.5660.2704.3761.3816.7
- Debt amortization: 169.5112.9134.5217.4295.3306.4316.9306.9395.1
  - Commercial banks
  - Corporate sector
- Repayment to the Fund: 18.417.716.714.613.70.00.00.029.2
- Change in gross reserves (increase=+): 398.9-715.2363.267.985.9-11.816.296.957.0

### 2. Total financing sources1280.936.6690.4581.2698.0915.11037.51165.21298.0
- Capital transfers: 11.136.367.936.028.230.132.234.537.0
- Foreign direct investment (net): 352.3324.7459.1460.7470.3488.4507.8528.2549.2
- Portfolio investment (net): 12.012.314.014.414.915.315.816.216.7
- Debt financing: 905.6-336.8169.270.0184.6381.3481.8586.3695.1
  - Public sector: 990.3458.0718.2560.0584.6631.3681.8736.3795.1
  - Short-term debt: -84.7-794.8-549.0-490.0-400.0-250.0-200.0-150.0-100.0
- Errors and omissions: 0.00.0-19.80.00.00.00.00.00.0

### 3. Total financing needs and gaps
- Total financing needs: 0.0-8.1365.3334.1333.439.70.00.00.0
- Expected financing: 201.5252.9253.1
  - AFDB: 118.0112.2
  - WB: 116.352.952.3
  - France: 65.516.423.0
  - EU: 19.765.665.6
- Residual financing gap: 167.181.280.339.7
  - IMF ECF financing 1/: 167.181.280.339.7
- Note: "Sources: IMF staff estimates and projections." and "1/ IMF ECF loan disbursed CFAF 167.1 billion in 2017."

### Table 8. Cameroon: Gross Fiscal Financing Needs, 2016–23 (selected lines)
- A. Overall fiscal deficit (cash basis, including grants): 977915831636571380393410
- B. Other financing needs: 394764288257302406420469
  - Amortization (including arrears): 367187334371336344333450
    - External: 131151232309306317307424
      - o/w Amortization (excl. IMF): 113135217295306317307395
      - o/w Repayment of IMF credit: 1817151400029
    - Domestic: 237361026229272626
  - Banking System: 27577-46-114-34628719
- C=A+B Total financing needs: 137216791119893873786812879
- D. Identified sources of financing: 13131679785560833786812879
  - External: 453920560585631682736795
    - Drawing: 453920560585631682736795
    - o/w Project financing (ext.): 453742560585631682736795
  - Domestic: 860759225-252021047684
    - Banking System: 655760100-1286603341
    - BEAC Statutory advances: 93346000000
    - Government deposits: 475352222200
    - Bank loans: 8331000000
    - Other bank financing: 43198-1483583341
    - Other non-bank financing: 205-1125-13116444344
      - o/w Bond issuance: 820000000
- E=C-D Financing gap: 59033433340000
- Errors and omissions: 590000000
- F. Exceptional external financing: 02532530000
  - Multilateral 1/: 01871880000
  - Bilateral: 06666000
- E-F Residual financing needs: IMF -ECF0818040000

### Table 9. Proposed Schedule of Disbursements Under the ECF Arrangement, 2017–20 (selected)
- Total: 483.0175 (in millions of SDR; In percent of quota)
- Disbursement dates, amounts and conditions for disbursement:
  - 16/26/2017 — 124.245 — Executive Board approval of the ECF arrangement.
  - 12/15/2017 — 82.830 — Observance of continuous and end-June 2017 performance criteria, and completion of the first review.
  - 6/30/2018 — 55.220 — Observance of continuous and end-December 2017 performance criteria, and completion of the second review.
  - 12/15/2018 — 55.220 — Observance of continuous and end-June 2018 performance criteria, and completion of the third review.
  - 6/15/2019 — 55.220 — Observance of continuous and end-December 2018 performance criteria, and completion of the fourth review.
  - 12/15/2019 — 55.220 — Observance of continuous and end-June 2019 performance criteria, and completion of the fifth review.
  - 5/31/2020 — 55.220 — Observance of continuous and end-December 2019 performance criteria, and completion of the sixth review.
- Note: "Cameroon's current quota is SDR 276.0 million, of which 235.654 million was outstanding as of May 31, 2018."

### Table 10. Capacity to Repay the Fund, 2016–32 (selected figures)
- Principal and charges and interest (SDR millions and CFAF billions) shown across 2016–2032 with year-by-year values.
- Outstanding Fund credit (SDR millions): 59.4245.7336.2427.8483.0483.0483.0441.6372.6281.5184.988.333.15.50.00.00.0
- Outstanding Fund credit (CFA F billions): 49.0198.4247.3311.0347.2344.8342.4311.7263.0198.7130.562.323.43.90.00.00.0
- Net use of Fund credit (SDR millions): -21.5186.390.591.655.20.00.0-41.4-69.0-91.1-96.6-96.6-55.2-27.6-5.50.00.0
- Disbursements and repayments and memoranda items (Nominal GDP, Exports of goods and services, Government revenue, Debt service, CFA francs/SDR) are provided for projection years.
- Memorandum items: Nominal GDP and other aggregates listed (e.g., Nominal GDP: 19,105 19,793 20,694 21,903 23,295 24,836 26,552 28,437 30,471 32,655 34,992 37,507 40,215 43,131 46,269 49,647 53,285).

### Notes on interest rate assumptions and projections
- Footnote on concessional interest rates and assumptions for ECF, SCF, RCF and ESF through end-2018 and beyond, including projected interest charges between 2019 and 2020: 0/0/0/0.25 percent per annum and beyond 2020: 0/0.25/0/0.25 percent per annum.

### Annex I. Implementation of Past Fund Advice — Status and Comments (selected)
- Tighten the fiscal stance with a goal to bring non-oil primary deficit (NOPD) below 4 percent of non-oil GDP.
  - Status: Ongoing
  - Comment: The fiscal stance was tightened by 1.2 percent of GDP in 2017, and the authorities aim to reduce the NOPD to 4 percent of non-oil GDP in 2018.
- Expand the tax base (phase out exemptions, restore fuel taxation, narrow investment incentives).
  - Status: Ongoing. Key measures due in 2019.
  - Comment: Authorities met non-oil revenue target in 2017; will start phasing out exemptions and expanding property tax in 2019.
- Strengthen tax collection (decentralized tax offices, single taxpayer identification).
  - Status: Ongoing. Key measures have yielded results.
  - Comment: Linking of taxpayer registry with tax application expected to be completed in mid-2018.
- Reform fuel subsidy and pricing policies by eliminating the fuel-subsidy scheme and restoring normal taxation of fuel products.
  - Status: Ongoing, not implemented.
  - Comment: Authorities publish monthly fuel price structure but have no immediate plans for more flexible pump prices.
- Enhance budget controls (accounting, complementary period, backlog of pending payments, SNH interventions, security spending).
  - Status: Ongoing, limited progress in 2017 despite strong ex-ante commitments.
  - Comment: Several measures taken (reduced complementary period to two months for 2017; arrears verification and clearance plan; reporting SNH interventions; circular to limit below-the-line treasury accounts; alignment of annual budgets with medium term framework; identification of underperforming projects).
- Improve implementation of medium-term debt strategy by vesting sole contracting authority in Minister of Finance.
  - Status: Partially implemented.
  - Comment: National Public Debt Committee chaired by Finance Minister examines new borrowing but President can still grant authority to other Ministers.
- Issue regional bonds in local currency in amounts consistent with market absorptive capacity.
  - Status: Not fully implemented.
  - Comment: Authorities reduced issuance of regional bonds in 2017 and relied mostly on deposits due to market conditions.
- Strengthen monitoring of contingent liabilities and SOEs (SONARA).
  - Status: Ongoing, short-term contingent liabilities still to be addressed.
  - Comment: Platform to monitor SOEs established; financial report prepared; two framework laws passed; restructuring plan for SONARA; CFAF 15 billion arrears to oil importers cleared in 2017.
- Strengthen the banking sector (problematic banks, NPLs, cooperation with COBAC).
  - Status: Ongoing, with some delay.
  - Comment: Preliminary resolution plans submitted; valuation review; NPL strategy; training for judges; SME bank business model review.
- Enhance financial intermediation (mobile banking legal framework, MFIs supervision, central information database).
  - Status: Ongoing.
  - Comment: Creditor database expanded to MFIs; progress in computerizing movable collateral registry.
- Improve business environment (reduce bureaucratic impediments, anti-corruption, AML, payment disciplines).
  - Status: Ongoing, with good progress in simplification of tax procedures.
  - Comment: Escrow accounts for VAT refunds; mobile tax declaration for SMEs; annual anti-corruption reports; digitalized land registry maps; reduced processing time for government invoices.
- Accelerate regional integration (CEMAC resources, common external tariff, harmonization, non-tariff barriers).
  - Status: Ongoing.
  - Comment: Authorities joined regional efforts to liberalize flow of goods and people and unify stock exchanges; revised customs tariff framework.

- Overall assessment: Traction of longstanding Fund policy advice has notably improved since the start of the ECF-supported program, with progress in fiscal consolidation and key structural reforms to boost non-oil revenue, enhance public financial management and improve the business environment. Given the complex socio-political environment, progress is yet to be made in some key areas (e.g. reduction of tax expenditures, expansion of the property tax, elimination of fuel subsidies with more flexible pump prices).

### Annex II. Impact of Fiscal Policy on Growth — Key findings
- Public spending efficiency and composition
  - Administrative costs in 2015 represented 16 and 29 percent of total current and capital spending, respectively.
  - Public investment reached 8.7 percent of GDP at end-2016; between 2008–15, public investment averaged 5.5 percent of GDP (twice 2000–07), yet real economic growth averaged 4.3 percent per annum compared to 4.2 percent in the previous period.
  - About ⅓ of total investment over 2015–16 (around 3 percent of GDP over 2015–16) cannot be considered as resulting in fixed capital formation.
  - Estimated efficiency gap: 51 percent (almost double the average efficiency gap of 27 percent in other low income and emerging market countries).
- Fiscal multipliers (SVAR estimates, responses reported as "Impact", "After 2 years", "Peak")
  - Current spending multipliers: Impact 0.8; After 2 years 1.6; Peak 0.8; REO 0.5
  - Investment multipliers: Impact 0.1; After 2 years 0.8; Peak 0.1; REO 0.7
  - Revenue multipliers: Impact 0.0; After 2 years 0.2; Peak 0.0; REO -
  - Interpretation: Estimated multipliers are overall small; multiplier on recurrent spending is largest; revenue multiplier statistically insignificant (likely due to narrow tax base and inefficiencies in revenue collection).
- Empirical SVAR setup: recurrent spending, investment and revenue estimated separately; trade balance, real effective exchange rate and interest rate introduced as exogenous variables.
- Conclusion: Limited pass-through of public investment and spending to real GDP; inefficiencies in investment process and narrow tax base constrain fiscal policy effectiveness.

*Sources: IMF staff estimates and projections.*

### 5.      These estimates suggest that growth-friendly fiscal consolidation is possible. Cuts in

### 5.      These estimates suggest that growth-friendly fiscal consolidation is possible. Cuts in

### Fiscal multipliers and implications for consolidation
- Estimates indicate low fiscal multipliers in low-income countries (LICs); cuts in spending, particularly investment, or revenue increases will have a limited impact on economic growth.
- Investment and consumption expenditure multipliers tend to be larger than those attached to revenue.
- Policy implications:
  - Improve the quality of spending, particularly public investment.
  - Aggressively pursue efforts to broaden the tax base to bring revenue closer to potential.

### Distributional impact of fiscal policy (Annex III)
- Poverty and inequality trends and context:
  - Annual real GDP growth for 2013–16: 5.3 percent.
  - Poverty rate declined from 40.2 percent to 37.5 percent between 2001 and 2014.
  - Inequality index increased from 42.2 to 46.6 between 2001 and 2014.
  - Three northern regions and the north-west region account for 74 percent of the total poor.
- Fiscal instruments and composition:
  - Direct taxes account for 25 percent of total non-oil revenue.
  - VAT represents around 40 percent of non-oil revenue.
  - Social assistance spending: less than 0.1 percent of GDP.
  - Social protection composition: pensions, social assistance (90 percent health-related) and subsidies represent the bulk; small labor market programs.
  - Main policy instruments: in-kind transfers (70 percent) and fee waivers (20 percent).
- Social spending and distribution:
  - More than 80 percent of social spending was on education; health and social protection account for the rest.
  - Total spending on education and health (percent of GDP) is below the average of SSA countries.
  - About 70 percent of the health budget is allocated to the central level; significant external funds and high out-of-pocket costs.
  - Education spending concentrated on the secondary level (half the education budget).
- Impact of transfers and subsidies:
  - Cash and near cash transfer programs had almost no impact on poverty and inequality, mainly due to their small size.
  - Indirect transfers (tax expenditures and energy subsidies) have small impact overall.
  - Targeted in-kind transfers in education and health have a visible impact on poverty and inequality reduction.
  - In 2014 the top 3 income groups received more than 50 percent of electricity subsidies and more than 80 percent of gasoline subsidies.
  - Simulation analysis: elimination of energy subsidies with higher transfers to poorer households can reduce poverty and inequality.
  - Removal of certain VAT and excise exemptions would be revenue enhancing and, with transfers to poor households, can reduce inequality.

### External stability assessment (Annex IV)
- Current account and reserves:
  - Current account deficit narrowed to 2.7 percent of GDP in 2017 from 3.2 percent of GDP in 2016 and an average of 3.6 percent of GDP in the previous 5 years.
  - Inflows related to budget support and foreign-financed public investment projects reached 3.6 percent of GDP in 2017, up from 2.4 percent in 2016.
  - Stock of imputed reserves reached US$3.2 billion, equivalent to 9 percent of GDP and 4.9 months of imports at end-2017, up from US$2.3 billion (or 7.4 percent of GDP; 3.9 months of imports) at end-2016.
- Exchange rates and IIP:
  - Nominal effective exchange rate depreciated by about 2.5 percent in 2017.
  - Over a 5-year horizon, the nominal effective rate depreciated by about 7 percent and the real effective exchange rate by about 5 percent.
  - Net International Investment Position (IIP) declined to -28.6 percent of GDP at end-2016.
  - Gross liabilities: 48.5 percent of GDP, of which almost 30 percent of GDP is in the form of public debt.
- EBA-lite methodologies and REER assessment:
  - All three EBA-lite methodologies indicate the REER is broadly in line with fundamentals; estimates vary between an undervaluation of 2 percent (Index REER approach) to an overvaluation of 2.8 percent (CA approach).
  - Panel regression-based approaches show a policy gap of -0.7 percent, driven by loose fiscal policy (-0.5 percent) and still relatively low reserve accumulation (-0.5 percent), mitigated by low depth of credit compared to peers (+0.3 percent).
  - CA approach estimates the REER to be overvalued by 2.8 percent; REER approach estimates it to be undervalued by 2.0 percent.
  - Trade elasticity assumed: -0.34 (Tokarick, 2010).
  - Combined simulation: increasing reserves accumulation by 2 percent of GDP and fiscal effort by 1 percent of GDP (compared to programmed 2020 levels) would point to an REER overvaluation of 7.3 percent (CA approach) and 0 percent (IREER approach).
  - External sustainability (ES) approach baseline: net IIP stabilizes at 2016 levels; estimates a 0.9 percent undervaluation.
  - ES alternative scenario: net IIP improves to -23.2 percent of GDP in 20 years; finds REER overvalued by 0.6 percent.
  - Simulation projecting net IIP consistent with a current account norm of -1.8 percent of GDP shows REER overvaluation of 0.2 percent.
- Reserve and data note:
  - Data on balance sheets and External Stability EBA-lite methodology are based on end-2016 values due to lack of more recent data.
- External risks and vulnerabilities:
  - External position remains vulnerable to fiscal pressures from security threats and public investment scaling-up.
  - Continued fiscal consolidation, implementation of structural reforms, and improvements in governance would help maintain the current account at sustainable levels as imports recover.

### Addressing high trade costs and weak governance to boost competitiveness
- Trade costs and border compliance:
  - Estimated trade costs remain elevated at over 200 percent ad-valorem equivalent.
  - Long dwell times at Douala port are a major contributor; 95 percent of Cameroon’s total trade goes through the port.
  - World Bank Doing Business indicators: performance below SSA and CEMAC averages on monetary costs and time of border compliance.
  - Trade facilitation indicators point to complex procedures and lack of transparency.
- Reforms undertaken and remaining weaknesses:
  - Reforms: elimination of some discriminatory regulation; fast-tracking of import declarations; scanning of containers; automated cross-checking of data; performance contracts in two largest customs offices; increased storage costs at the port in 2017.
  - Remaining issues: slow progress in enhancing automation, relatively low storage costs, overly complex customs procedures and regulations, inefficient bureaucracy and port management.
- Governance and corruption:
  - 2016 World Bank Enterprise Survey: 24 percent of surveyed firms reported expected informal gift/payment for an import license (down from 26 percent in 2009; SSA average 17 percent).
  - WEF Executive Opinion Survey score on undocumented extra payments/bribes in connection with imports/exports: 2.8 (scale 1 to 7).
  - Customs reforms: code of conduct, hotline to report corruption, independent Ethics and Governance Committee; new penal code in 2016 includes measures on corruption.
  - Perceptions of corruption remain significant per private sector and civil society discussions.
- Policy recommendations to boost competitiveness:
  - Reduce non-tariff barriers and simplify customs procedures to enhance competitiveness and regional integration.
  - Accelerate automation and transparency in trade formalities, increase storage cost reforms where appropriate, and strengthen port management.
  - Strengthen governance and anti-corruption measures in trade administration to reduce trade costs and time, thereby supporting diversification and growth.

_International Monetary Fund. CAMEROON (selected annexes and figures from the provided chapter)._

### Annex V. Capacity Development Strategy 2018–20

### Annex V. Capacity Development Strategy 2018–20

### Recent Technical Assistance and Perspectives
- CD activities through technical assistance (TA) from Fund headquarters and the Central Africa Regional Technical Assistance Center (AFRITAC Center) in Cameroon continue to be frequent in 2017–18.
- 2017–18 missions focused mainly on:
  - Enhancing the efficiency and equity of public expenditure.
  - Enhancing reliability of budget data and accounting information systems.
  - Improving external sector statistics.
  - Strengthening capacity on the valuation of the non-performing loans for the resolution of ailing banks.
- Going forward, priorities will focus on:
  - Mobilizing non-oil revenue.
  - Strengthening public financial management (budget control and treasury management in particular).
  - Improving debt management.
  - Establishing frameworks for bank resolution and NPL resolution.
  - Enhancing data reporting and compilation.
- Continued focus: enhance the quality and consistency of fiscal data across different sources of information.
  - Short-term measures are being implemented by the authorities to improve the current situation.
  - Longer-term CD support from HQ and AFRITAC will be provided in the context of the move to the GFSM 2014 presentation of fiscal accounts, and implementation of the CEMAC PFM Directives on budget nomenclature and on fiscal operations tables.

### Authorities’ Views
- The authorities highly value the dialogue with the IMF including through regular TA missions and appreciate the Fund’s responsiveness and availability to deliver high quality TA upon request.
- They believe the dialogue has helped raise awareness in relevant areas where reforms are being carried out.
- Authorities expressed interest in being more involved in preparing missions’ terms of reference to ensure their priorities are better integrated.
- They appreciated the level of donor coordination and recommended its enhancement in the spirit of the 2005 Paris Declaration on aid effectiveness.

### Technical Assistance Priorities (Table 1)
- 1. Tax Policy
  - Broaden the non-oil tax base
  - Rationalize exemptions and eliminate inefficient tax incentive schemes
  - Further strengthen mining taxation and scoping
- 2. Public Financial Management
  - Ensure consistency between multi-year budget frameworks and the annual budget
  - Strengthen fiscal reporting
  - Strengthen treasury management
  - Strengthen expenditure control
  - Enhance monitoring of fiscal risks
  - Strengthen management of the payroll
- 3. Revenue administration
  - Enhance tax and customs administration
  - Review and have a hold on parafiscal levies
- 4. Expenditure Policy
  - Strengthen expenditure rationalization
  - Improve expenditure efficiency particularly of investment spending
- 5. Debt Policy
  - Strengthen debt sustainability assessments by enhancing the quality of the macroeconomic projections and sensitivity/scenario analysis
  - Improve external debt reporting and management
  - Prepare robust medium-term debt strategies
- 6. Financial supervision & regulation
  - Complete the judiciary elements for the NPL resolution strategy
  - Implement a collateral registry
- 7. Compilation and dissemination of statistics
  - Use the NSDP as the main dissemination portal for macroeconomic statistics
  - Enhance government financial statistics
  - Complete the transition to Balance of Payments Manual 6 (BPM6)
  - Enhance external debt statistics
  - Increase the frequency of data collection to quarterly for balance of payments, and annually for the international investment position (IIP)

*Source: Annex V. Capacity Development Strategy 2018–20*

### 10.      In addition, the two structural benchmarks for September 2017 that had been re-

### 10.      In addition, the two structural benchmarks for September 2017 that had been re-scheduled for March 2018 were met:

### Compliance with structural benchmarks (re‑scheduled for March 2018)
- Verify the stock of domestic arrears at end-2016 by conducting an external audit.
  - Government chose to hire an independent external firm rather than conducting the audit itself, producing a delay vis-à-vis the initial deadline.
  - The new deadline was met and the auditor produced a report that has been sent to IMF staff.
- Adopt a plan for the gradual clearance of domestic arrears relating to prior fiscal years.
  - A plan has been prepared and proposed to the Minister of Finance for validation.
  - Quarterly reports tracking outstanding balances and other amounts due will be prepared starting in July 2018.

### Delayed structural benchmarks
- Four structural benchmarks were delayed:
  - The budget execution report for end-2017 was delayed by operations to close the accounts during the complementary period; the complementary period was maintained at two months as programmed but the final fiscal table was only produced in May 2018.
  - The circular implementing the projects’ maturation guide was prepared but has not yet been signed.
  - The computerization of the register of personal property collateral was delayed but should be effective in December with World Bank support and covering a broader range of movable assets.

### IV. ECONOMIC AND FINANCIAL PROGRAM IN 2018–19 AND THE MEDIUM TERM — A. Program Objectives
- Government reiterates firm commitment to achieving program objectives.
- Continued structural fiscal reforms to:
  - expand the non-oil revenue base;
  - improve effectiveness of public investment and quality of budgetary arrangements;
  - mitigate fiscal risks associated with contingent liabilities.
- Continue fiscal consolidation to increase fiscal and external buffers while protecting social spending and social protection programs.
- Introduce strong corrective measures to correct deviations observed in 2017 in both quantitative program targets and structural reforms aimed at improving fiscal discipline.

### B. Macroeconomic Framework — Growth and external balances
- Growth outlook:
  - In 2018, growth should improve, rising to at least 4 percent.
  - Growth projections adjusted downward slightly due to delay in natural gas production startup (scheduled for the end of the first quarter of 2018 rather than the beginning).
  - Medium term: growth will continue to rise gradually to stabilize at around 5–5.5 percent, driven by completion of large infrastructure projects (Kribi deep-water port, road projects, energy production projects).
- Sectoral and project drivers:
  - Construction work related to the 2019 African Cup of Nations (CAN).
  - Significant improvement in electricity supply from entry into operation of some hydroelectric dams benefiting manufacturing and agricultural industries.
- External balances and reserves:
  - Current account deficit should stabilize at around 2 ½ percent of GDP in the medium term.
  - Reserves should stabilize at around five months of imports.
- Public debt risks:
  - Public debt increased more rapidly than anticipated in 2017 owing to acceleration of disbursements of external financing.
  - Rapid accumulation of non-concessional debt and insufficiently strong and diversified export base could cause public debt to soar rather than stabilize and gradually decline after 2019 as envisaged in the program.
- Risks to baseline:
  - Progress in economic stabilization in the CAEMC and increase in oil prices could accelerate growth and revenue mobilization.
  - Persistence of security problems in the northwestern and southwestern regions poses fiscal risks and could impact investments and growth.

### C. Fiscal Policy — Fiscal objectives and revisions for 2018
- 2018 budget:
  - Calls for a deficit of 2.6 percent of GDP.
  - Government proposes to reprofile fiscal consolidation to account for potential real increase in non-oil revenues and unexpected expenditures from security threats and hydrocarbon subsidies.
  - Unexpected expenditures could total CFAF 24 billion for security and at least CFAF 72 billion for the subsidy to retail hydrocarbon prices.
- Supplementary budget (submitted to Parliament for ratification in June 2018 — prior action):
  - Aim (i): increase non-oil revenue targets by at least 0.5 percent of GDP from the target in the original 2018 budget.
  - Aim (ii): maintain existing current expenditure allocation while taking into account the 0.7 percent of GDP in non-budgeted expenditures for security and subsidies.
  - Aim (iii): limit investment spending on the basis of commitments already taken in the 2018 budget to 6.2 percent of GDP in total to achieve a revised overall deficit objective (payment order basis, including grants) of 2.6 percent of GDP.
  - Overall deficit (cash basis, including grants) should increase to 4.0 percent of GDP to allow for:
    - reduction in stock of outstanding floats accumulated in 2017 amounting to 1.6 percent of GDP;
    - continued implementation of the plan to clear domestic arrears;
    - reduction in the balance of the correspondent accounts.

### Revenue measures and administration (DGI and DGD)
- General Directorate of Taxes (DGI) measures:
  - Opening since February 2018 of seven new medium-sized taxpayer centers (CIMEs) to improve VAT management.
  - Enhanced monitoring of taxation on execution of the government budget and cross debt operations.
  - Implementation of IMF technical assistance recommendations on use of some customs data and specific audits of large and medium-sized businesses.
  - Improved collection of tax arrears via payment solidarity measures and garnishment orders (avis à tiers détenteur).
  - Safeguard revenues by expanding dematerialization of the means of payment.
- General Directorate of Customs (DGD) measures:
  - Expand geographic coverage of the CIVIC Program.
  - Interface with the Ministry of Transport to combat fraudulent vehicle registration.
  - Allow large operators under performance contracts that already benefit from a “blue channel” rate of 80 percent to use the “green channel.”
  - Conduct joint DGD‑DGI (FUSION) audits.

### Expenditure streamlining and savings measures
- Planned measures and estimated savings:
  - Purging of the payroll database to combat phantom civil servants and achieve budget savings of around 0.1 percent of GDP on the wage bill.
  - Reduction of government goods and service expenditures (mission expenses and commissions, strict application of administered prices) to generate additional savings of around 0.5 percent of GDP.
  - Maintain a precautionary freeze introduced at the beginning of the year for a floor of CFAF 30 billion to consolidate primary deficit reduction profile.
  - Prioritization of domestically financed capital expenditure and increased monitoring of budget execution to reduce capital expenditures by around 1.7 percent of GDP.
  - For externally financed investments: reinforce programming and monitoring of disbursements, particularly for non-concessional financing; prepare quarterly disbursement plans for all investment projects in cooperation with financial partners; monitor requests for funds and actual disbursements on a monthly basis starting at end-July 2018 (new structural benchmark).
  - Government undertakes to make necessary trade-offs to keep executed expenditure within total budget appropriations.

### Arrears, financing, and debt management
- Payment arrears:
  - Payment arrears reached CFAF 529.8 billion at end-March 2018.
  - Government undertakes to reduce this amount in 2018; to achieve the quantitative program target at end-June 2018 on net non-accumulation of domestic arrears, the government cleared CFAF 262 billion (1.3 percent of GDP) by May 2018.
- Financing plan:
  - Financing will be covered by a combination of borrowing on the domestic and regional market and foreign loans.
  - Financing plan for issuance of treasury bills and bonds will be revised based on new objectives, availability of budgetary support, and projected external project financing.
  - Given decline in banks’ appetite for long-term bonds, government should give preference to issuance of fungible Treasury bills (BTAs) while working to expand bond subscription beyond banks and eliminate recourse to direct financing.

### Measures to enhance control of budget execution (urgent)
- Problems identified:
  - Recourse to exceptional expenditure procedures (provisional commitments, treasury advances, cash advances) contributed to accumulation of expenditures to be regularized at end of complementary period and discrepancies between budget appropriation commitments, acceptances for payment by the Treasury, and payments.
- Measures enacted:
  - Circular supplementing Circular No. 001/C/MINFI of January 6, 2018: implementation of the June 2018 supplementary budget to better control exceptional procedures and define new budgetary and accounting conditions, including:
    - monthly regularization of expenditures to avoid accumulation of significant expenditure balances to be regularized at year-end;
    - starting in June 2018, preparation of monthly accounting and budgetary statement extracts annexed to the TABORD indicating amounts of treasury advances, provisional commitments and cash advances;
    - limit on total volume of expenditure involving exceptional procedures to 10 percent of total domestically financed expenditures (excluding debt service) in 2018 and 5 percent in 2019 (new indicative target);
    - compliance of cash advances procedure with general public accounting regulations starting with the 2019 fiscal year;
    - prohibition on new provisional commitments and treasury advances as of date of publication of the circular for the remainder of the 2018 fiscal year.
  - Draft law on the Code of Transparency and Good Governance in the Management of Public Finances in Cameroon and draft law on the Financial Regime of the Government and Other Public Entities submitted to Parliament in June 2018 so implementation can begin with the 2019 fiscal year (prior action).
  - Close all accounts of non-revenue-generating public entities and prohibit transfers of new budget appropriations to these accounts (new structural benchmark, August 2018); existing balances will continue to be drawn down. At end-March 2018, one third of the 2017 stock had already been eliminated.
  - Enhance monitoring of budget execution through monthly reconciliation and validation of TABORD data by entities involved (DGI, DGD, DGTCFM, DGB, CAA and DN BEAC) and prepare a report signed by all those involved in the production of the TABORD and budget execution.

### Medium-Term Fiscal Policy Objectives
- Increase mobilization of non-oil revenues — measures planned for 2019:
  - Starting with the 2019 budget law, collection of property taxes will be made through the electricity bill. All electricity bills must now include pre-filled property tax forms.
  - Action plan to gradually reduce tax expenditures in 2019 and 2020, particularly discretionary exemptions, will be implemented in the 2019 budget and will aim to generate at least 0.4 percent of GDP in additional revenues.
  - Starting in 2018, measures will be taken to conclude external financing agreements for investment projects with all taxes included.
- Continue to streamline expenditures while protecting priority social spending:
  - For 2018–20, in the context of the interim growth and employment strategy, government will take decisive measures to further reduce poverty and inequality.
  - Implementation of national social protection strategy includes scaling up of social safety net program starting in 2019 with resources of at least CFAF 4.5 billion budgeted and made available to project managers.
  - Continue to increase expenditure on health and education and improve quality of such spending, particularly by ensuring release of sufficient resources for the performance-based health expenditure management program, i.e., at least 15 percent of the 2018 budget of the Ministry of Health.
  - The floor for social spending for 2019-20 will be gradually increased to 3.5 percent of GDP in 2019.

*International Monetary Fund — Cameroon: CR18235 (excerpt).*

### 26. The government intends to continue the medium-term public financial management

### 26. The government intends to continue the medium-term public financial management reforms aimed at improving the quality of expenditure

### Public financial management reforms — main focuses
- Acceleration of the transposition of CAEMC directives into national law and their implementation.
  - Draft decrees for the transposition of the four other directives into national law will be finalized by end-December-2018`.
- Cash flow management reforms to continue and expand:
  - Continue to expand the scope of the Treasury single account by closing all dormant bank accounts and repatriating their balances, while avoiding the opening of new accounts.
  - By July 2018 establish a timetable for closing and repatriating the balances of the bank accounts of administrative public establishments and some accounts of the Autonomous Amortization Fund (Caisse Autonome d’Amortissement—CAA), including “idle resources,” in strict compliance with prevailing laws and regulations, particularly the law on the Financial Regime of the Government (new SB).
  - Plan to examine, with technical and financial partners, centralizing all counterpart funds for new joint projects in a single account opened at the BEAC; management of accounts for older projects will continue until finalization of related studies while taking into account donors’ requirements.
- Strengthening government financial reporting:
  - Starting in September 2018, the TOFE will be produced based on automatic links with the account balances and will be available a maximum of 20 days after the end of each month.
- Improve effectiveness and quality of capital spending:
  - A Prime Minister decree will make mandatory the necessary preparations for proper execution of projects, in accordance with the updated Project Maturation Methodological Guide.
  - Minister responsible for public investments will conduct an independent assessment of maturity aspects of large-scale or strategically challenging projects (per PEFA recommendations).
  - Expand 2017 exercise on operating expenditures underlying domestically financed capital expenditures to externally financed capital expenditures so as to include in the Public Investment Budget only projects that genuinely lead to gross fixed capital formation.
  - Establish a mechanism for monitoring projects that could potentially generate idle resources deposited with commercial banks.
- Monitoring contingent liabilities and public enterprise consolidation:
  - Continue adoption and implementation of the strategy for reform of public enterprises and establishments under the 2017 laws.
  - Amend the law on PPPs to improve transparency and avoid projects that do not meet government priorities.
  - National Public Debt Committee (CNDP) will systematically review all PPP project proposals.

### Tax administration and revenue collection (DGI and DGD)
- Joint DGI/DGD work on “FUSION” software to improve data collection and information sharing.
- Minister of Finance to publish a communiqué making customs clearance conditional on existence of business taxpayers in the DGI active database (July 2018 structural benchmark).
- Main actions:
  - Clean-up of the taxpayer database using crosschecking results between customs and tax databases.
  - Harmonization and simplification of procedures.
  - Limitation of derogatory regimes (notably April 2013 law on tax incentives) and evaluation/trimming of fiscal expenditures and lists of goods/equipment eligible for import exemptions; use of experts for validation; acceleration of verifications of enterprises that benefited from exemptions via joint DGI-DGD audits.
  - Enhanced information sharing between DGD and DGI, including transfer of statistical and tax returns of enterprises under the Large-Taxpayer Directorate and the CIMEs to the FUSION platform; provision of complete information on purchases of tax stickers.
  - Organization of more effective joint audits and investigations to yield significant additional revenues.

- DGI-specific measures:
  - Strengthen tax audits via stepped-up cooperation with DGD and recourse to Tax Inspectors without Borders.
  - Improve VAT yield through entry into operation of new CIMEs and collection of VAT arrears owed by public enterprises.
  - Completion of work to start up interface between cleaned active taxpayer database (FISCALIS) and “MESURE” software (structural benchmark for July 2018).
    - The interface between the active database and MESURE has been completed.
    - Development of module for automatically updating the database (transfers, closures, mergers, suspensions, creations) in MESURE and migration to a web version to be completed by end-July 2018.
  - Simplify and automate procedures by expanding existing automation measures (DGE, CIMEs, specialized centers).

- DGD-specific measures:
  - Secure customs revenues through quarterly reconciliation of import declarations and scanner images validated by the SGS and assessed customs values (new structural benchmark for September).
    - The reconciliation will target at least 30 percent of total import operations based on risk (operations subject to exemptions and high-risk operators/origins) and will be conducted by a joint SGS/MINFI team.
  - Monthly reconciliations between revenues collected by Customs and revenues paid to the Treasury (in TABORD Committee) to assess and validate monthly MINFI results.
  - Elimination of discretionary exemptions not provided by law.
  - Launch specific checks under HALCOMI operation (products subject to tax stickers, vehicles, etc.).
  - Protect information system by securing user profiles and interconnection with partners using PKI technology, and enhance/security ASYCUDA++.

### Debt policy and management of contingent liabilities (Section E)
- Debt policy objective: avoid debt distress and place public borrowing on a sustainable trajectory.
  - Continue to limit non-concessional borrowing within program targets compliant with the debt sustainability analysis.
  - For 2018–19 non-concessional borrowing ceilings will be set in line with: (i) execution rates for the previous three years; (ii) volume of projects considered to be mature; and (iii) disbursements planned from committed but not yet disbursed balances (soldes engagés non-décaissés—SENDs).
- Government commits to respect borrowing ceilings defined in the program.
  - Revised borrowing plan after consultation with partners to give preference to projects with the least expensive financing.
  - Government hopes to increase concessional borrowing limit in 2018 given concessional borrowing in 2017 was below projections.
  - For 2019, a non-zero limit on nonconcessional borrowing will be proposed to accommodate critical projects lacking concessional financing.
- Processing and reduction of SENDs:
  - Government studied SENDs and prepared a plan to reduce those relating to projects not mature.
  - MINFI and MINEPAT to adopt plan by end-July 2018 (new structural benchmark).
  - Plan will include measures to reduce the stock of (non-performing) SENDs by at least one third by end-2018, with initial progress by September 2018.
  - Absorption of SENDs corresponding to projects being implemented will be completed in line with fiscal policy objectives.

- Borrowing plan totals (Text Table 1 totals):
  - Total 665.5
  - of which: concessional 241.8
  - non-concessional 423.7

- Expanded debt data collection and analysis:
  - Gradually expand collection and analysis of debt data to public enterprises and public establishments, including cross debts.
  - For public utility companies (ENEO, CAMWATER, CAMTEL, SONARA), Public Treasury will make quarterly payments based on annual budget allocations to limit recourse to cross debts and reconcile payments with actual consumption at year-end.
  - An accounting statement of these payments will be produced starting in September 2018 for payments expected at end-June 2018 (structural benchmark).

- SONARA financial sustainability measures (short term):
  1. Completion of recapitalization process of SONARA by July 31, 2018 at the latest.
  2. Signing of agreement on government/SONARA cross debts as at December 31, 2015.
  3. Signing minutes substantiating clearance of shortfalls/overpayments as of December 31, 2016 and December 31, 2017.
  4. Revision of petroleum products price structure by adjusting: transport equalization payment; items not subject to controls (overhead, shrinkage).
  5. Revision of the gas price structure to control expenditures due to revenue losses on GPL and SONARA production; optimize GPL supply contracts through competitive bidding.
  6. Redemption of SONARA securities (OTZ) by the government to repay the 2013 debt of crude oil suppliers to reduce financial costs and restore confidence.
  7. Monthly clearance of the shortfall starting in July 2018 and settlement of amounts due within a maximum of 90 days.

- Electricity market and SONATREL:
  - Ensure proposed electricity market reforms do not result in additional financial pressures for the government.
  - Created a steering committee to clarify roles and responsibilities as soon as possible.
  - Ensure SONATREL manages the transmission network based on best practices and facilitate its modernization.

### Regional monetary policy and financial sector stability (Section F)
- Commitment to policies consistent with maintaining stability of the monetary arrangement and restoring BEAC reserves.
  - Target for net accumulation of government deposits at the BEAC at end-June 2018 will be reviewed to account for actual 2017 level, regional reserve reconstitution goals, elimination of statutory advances, and establishment of government special deposit account with the BEAC in December 2017.
  - Government undertakes to strictly limit drawings on the special account to a maximum of CFAF 50 billion per quarter for short-term liquidity management.
  - Government to respect quarterly targets for the balance of the special account defined in Table 1.
  - Continue to promote development and expansion of the domestic and regional market for treasury bonds and bills and refrain from recourse to direct borrowing except for commitments already undertaken in the context of PLANUT and CAN.
- Bank resolution and non-performing loans:
  - By August 2018 finalize (cost and feasibility) assessment of resolution options for distressed banks with support of technical and financial partners (structural benchmark). Assessment to cover liquidation, continued operation, and hybrid solutions.
  - Methodology of the asset recovery company (Société de recouvrement des créances—SRC) for establishing transfer prices for unproductive assets updated with IMF technical assistance, leading to significant reduction in transfer prices; eventual transfers to SRC will follow this validated methodology.
  - Performance contract with management of the public bank finalized in June 2018 will be signed by July 2018 (structural benchmark) and will specify main objectives.
  - Specific action plan to reduce non-performing loans includes capacity building in business law for judges, clerks, lawyers and bailiffs.
    - Short-term targets: training in banking disputes and concentration of bank court cases with at least 30 judges by December 2018 in main judicial centers; appointment of a pre-trial judge for civil and commercial cases by August 2019.
    - By December 2018, National Credit Council to validate a bill on criminalization of non-repayment of loans; will serve as basis for government-level final text.
    - Project for movable assets registry (with World Bank support) postponed with broader coverage to December 2018 (delayed structural benchmark), including adoption of a specific regulation to be transmitted to the Ministry of Justice by end-June 2018 and operational implementation.

### Competitiveness and private sector development (Section G)
- Commitment to accelerate measures supporting private sector development and economic diversification.
  - Main obstacles identified: lack of infrastructure, unfavorable business climate, lack of access to financial services for private sector.
- Trade and logistics measures to reduce costs and delays (port of Douala congestion addressed):
  a. Modernization of legislative framework: revision of CAEMC Customs Code and implementation of CAEMC customs tariffs, aligned with 2017 Harmonized System.
  b. Continue geographic expansion of electronic payment platform.
  c. Grant “green channel” facility to operators with high revenue potential.
  d. Continue automation and simplification of procedures.
  e. Establish bonded warehouse for used vehicles less than 10 years old.
  f. Respect concession agreements and improve public-private dialogue.
- Tax collection and government invoice processing measures:
  a. Establish interactive system for tracking VAT credit refund files online.
  b. Improve tax regime for micro and small enterprises.
  c. Establish e-payment machines in divisional tax centers.
  d. Reduce delays in processing government invoices between commitment and acceptance for payment by the Treasury to two months (structural benchmark, June).
- Financial inclusion and access to financial services:
  - Update financial inclusion strategy based on FINSCOPE study.
  - Focus on improving customer information: CIP-FIBANE-CASEMF platform now accessible to all credit institutions (14 banks and 8 financial establishments, including CAMPOST), and 76 microfinance institutions (including 39 2nd category MFIs, three 3rd category MFIs, 28 independent 1st category MFIs and six networked 1st category MFIs).
  - Launch of MFI credit information office (supplied with data by CIP-FIBANE-CASEMF), accessible by around 10 MFIs.
  - Facilitate access to movable assets and real property collateral: digitalization of the movable assets register (under way and anticipated for December 2018); computerization of the business registry; completion in 2017 of digitized land registries for Douala, Yaoundé, Garoua and Maroua and the national registry.
  - BEAC revising regulations on mobile banking; national consultations with stakeholders to be transmitted to COBAC and the BEAC to support revision.

*Source: cr18235 - 26. The government intends to continue the medium-term public financial management reforms aimed at improving the quality of expenditure*

### 40.      The business model for the SME bank is being revised. Consultations with the World Bank

### 40.      The business model for the SME bank is being revised. Consultations with the World Bank

### SME bank business model
- The business model for the SME bank is being revised. Consultations with the World Bank and the AfDB have been initiated and the new business model will be decided on by August 2018 (structural benchmark).
- The new model will:
  - Be supported by indirect financing from commercial banks (guarantees, financing facilities) and cofinancing with commercial banks.
  - Provide for phasing out direct financing of SMEs by the bank.
  - Rely on the expertise of the commercial banks in risk management and have a multiplier effect by encouraging commercial banks to grant more loans to SMEs.
- Structural benchmark entry (as presented in Table 2):
  - Timetable: Aug-18
  - Indicator: Decide the business model of the SME bank.
  - Output: The revised bussiness model is sumited to Fund staff

### Program arrangements and review schedule
- The government will take all measures needed to achieve the objectives and meet the criteria presented in Tables 1 and 2 of this memorandum.
- The program will be subject to semiannual reviews and performance criteria, indicative targets and structural benchmarks as set out in Tables 1 and 2 and in the attached Technical Memorandum of Understanding (TMU).
- Review timing:
  - The third program review will be based on end-June 2018 targets and is expected to be completed on or after December 15, 2018.
  - The fourth program review will be based on end-December 2018 targets and is expected to be completed on or after June 15, 2019.

### Selected quantitative performance criteria and indicative targets (high-level highlights from Table 1)
- General presentation: Table 1 reports Quantitative Performance Criteria and Indicative Targets and Projections, December-2017–June-19 (Billions CFA Francs, cumulative for each fiscal year).
- Example indicators and selected values/statuses (as shown in Table 1):
  - Floor on the non-oil primary fiscal balance (commitment basis):
    - End-Mar 2017: -974 (PC Adj. -974; Prel -1,203; Status: Not met)
    - End-Jun 2017: -53 (PC Adj. -53; Prel 90; Status: Met)
    - End-Dec 2017: -320, -519, -477, -777, -872, -46, -278 (multiple columns showing PC, Rev. PC, 1st Rev Proj, IT, etc.)
  - Ceiling on the net domestic financing of the central government excluding IMF financing:
    - End-Mar 2017: -200, -80, -119 (Status: Met)
    - End-Jun 2017: -43, -161, -127 (Status: Not met)
  - Ceiling on net borrowing of the central government from the central bank excluding IMF financing:
    - End-Mar 2017: -253, -133, -63 (Status: Not met)
    - End-Jun 2017: -304, -422, -78 (Status: Not met)
  - Ceiling on the disbursement of non-concessional external debt:
    - Values shown include 540, 540, 625 (Status: Not met) and 350, 350, 108 (Status: Met)
  - Continuous quantitative performance criteria:
    - Ceiling on the accumulation of new external payments arrears: 0 across reported periods (Status: Met where indicated)
    - Ceiling on new non-concessional external debt contracted or guaranteed by the government: examples include 100, 278, 343 (Status: Not met) and 436, 554, 367 (Status: Met)
  - Indicative targets examples:
    - Floor on non-oil revenue: 2,457, 2,457, 2,589 (Status: Met); 689, 689, 619 (Status: Not met)
    - Ceiling on the net accumulation of domestic payment arrears: -57, -57, -213 (Status: Met); 0, 0, 248 (Status: Not met)
    - Floor on social spending: 624, 624, 636 (Status: Met); 144, 144, 143 (Status: Not met)
    - Ceiling on direct interventions of SNH: 168, 168, 169 (Status: Not Met); 156, 156, 55 (Status: Met)
- Memorandum items (selected):
  - Cumulative external budget support, excluding IMF (earliest disbursement): entries include 337, 337, 198, 0, 0, 118, 131, 151, 131, 167, 261, 253, 0, 151
  - New concessional external debt contracted or guaranteed by the government: entries include 100, 100, 19, 152, 152, 0, 152, 152, 245, 152, 245, 150, 150
  - Balance of the special account for the unused statutory advances: 247, 247, 227, 227, 227

### Prior actions and structural benchmarks (selected items from Table 2)
- Prior actions achieved or in progress (selected):
  - Submit for Parliament's approval a supplementary 2018 budget in line with program objectives — Transmission letter from the Presidency to Parliament (listed as Prior Action)
  - Submit to Parliament the bills for the transposition of CEMAC's directives on the financial regime of state and public entities and transparency and governance in public finance management — Transmission letter from the Presidency to Parliament
  - Issue a supplementary circular to the circular N°001/C/MINFI of January 06, 2018, which strictly limits the derogatory spending procedures — Circular published online and in newspapers.
  - Clear part of the domestic payment arrears accumulated at end-2017 by end-May 2018, up to CFAF 212 billion — Accounting statements sent to Fund staff
- Selected structural benchmarks, timetable and status (examples):
  - From Jun-17: Include the total petroleum receipts of national oil company SNH and direct interventions in the monthly table of government financial operations (TOFE) — Monthly TOFE — Met
  - From Jun-17: Publish the petroleum product price structure on a monthly basis — Publication online and in newspapers — Met
  - From Q2 2017: Publish quarterly budget execution reports — Publication online and in newspapers — Not met
  - Jun-18: Revise the plan for dealing with troubled banks — Plan finalized in consultation with Fund staff — Not met, reformulated and proposed for August 2018
  - Jul-18: Sign a performance contract with the management of the state-owned bank — Contract signed and submitted to Fund staff
  - Aug-18: Decide the business model of the SME bank — The revised bussiness model is sumited to Fund staff
  - Dec-18: Computerize the register of movable collateral — Register available online — Not met, reproposed for Dec-18

### Technical Memorandum of Understanding — definitions and reporting framework (selected provisions)
- Purpose:
  - The TMU defines the quantitative performance criteria and indicative objectives that will be used to assess performance in connection with Cameroon’s program supported by the Extended Credit Facility (ECF) 2017–20 and establishes the framework and deadlines for reporting data to IMF staff.
- Conditionality:
  - Quantitative performance criteria and indicative objectives for end-June and end-December 2018 provided in Table 1 of the MEFP; structural benchmarks provided in Table 2 of the MEFP.
- Key definitions (as presented in TMU):
  - Government: central government of the Republic of Cameroon, including all implementing agencies, institutions, and any organizations receiving special public funds as defined under GFSM 2001 (paragraphs 2.48–50). Excludes local governments, the central bank, and other public entities with autonomous legal status whose operations are not included in the TOFE.
  - Public enterprise: a commercial or industrial unit fully or partially owned by the government that sells goods and services to the public on a large scale.
  - Total government resources: tax and nontax budget revenue (GFSM 2001 Chapter 5) and grants; revenue recorded on a cash basis; proceeds from sale of assets and privatization revenue are not considered government revenue.
  - Oil revenue: total transferable balance of SNH and income tax on petroleum companies and gas operators; recorded on a cash basis.
  - Non-oil revenue: all government (tax and nontax) revenue excluding oil revenue; VAT recorded net of VAT reimbursements; pipeline fees by COTCO recorded under nontax revenue.
  - Privatization revenue: all funds paid to the government in connection with sale or transfer of management of a public enterprise (concession) or sale of shares; recorded on a gross basis; costs recorded separately under expenditure.
  - Total government expenditure and net lending: wages and salaries, goods and services, transfers (including subsidies, grants, social security benefits), interest payments, capital expenditure, recorded on a payment authorization basis unless otherwise indicated, and net lending; includes expenditures executed without prior authorization pending regularization.
  - Spending advances [interventions directes] by SNH: part of government expenditure, include emergency payments made by SNH on behalf of the government.
  - Social expenditure: public expenditure recorded in the government budget for priority programs—education (total current and capital expenditure of specified Ministries), health (current expenditure of Ministry of Public Health), and other social sectors (current expenditure of specified Ministries).
  - Primary balance: difference between total government revenue and total government expenditure and net lending, not including interest payments on external and domestic debt.
  - Debt: definition follows Guidelines on Public Debt Conditionality and includes commitments contracted or guaranteed for which value has not been received; debt understood as direct, non-contingent liability created under a contractual arrangement.
  - External debt: any borrowing or debt service in a currency other than the CFA franc; applies to debt between CEMAC countries; performance criteria apply to external debt of government, public enterprises receiving transfers from the government and other public entities with government ownership greater than 50 percent, and any private debt for which the government has offered a guarantee.
- Reporting:
  - The TMU sets out requirements for reporting the data to Fund staff used to assess program implementation.

*Source: IMF staff report (MEFP, Tables 1 and 2; Technical Memorandum of Understanding) as provided in the supplied content.*

### 15. Concessional external debt: External debt is considered concessional if it comprises a grant

### 15. Concessional external debt: External debt is considered concessional if it comprises a grant component of at least 35 percent.

### Concessionality of external debt
- Concessional external debt: grant component of at least 35 percent.
- Grant component: difference between face value of the loan and its present value expressed as a percentage of the face value.
- Present value calculation: discount to present value of debt service payments at the date on which the debt was arranged.
- Discount rate used for present value: 5 percent.
- Calculation of concessionality reflects maturity, grace period, schedule of maturities, commitment fees, and management fees.
- Concessionality of Islamic Development Bank (IsDB) loans will reflect the existing agreement between the IsDB and the IMF.

### Domestic debt: definitions and composition
- Domestic debt: all of the government's debts and obligations in CFA francs.
- Included items: unreimbursed balances, advances from the Bank of Central African States (BEAC), Treasury bills and bonds, structured debt, nonstructured debt, domestic payment arrears, and debt to SONARAs suppliers.
- Structured debt: debt subject to a formal agreement [convention] or securitization [titrisation].
  - Under the program: structured bank debt included in net bank credit; structured nonbank debt reflected in nonbank financing.
  - Structured bank debt: all claims of local banks on the government, except treasury bills and bonds; includes securitized bank debt and direct advance arrangements.
    - Outstanding balance of securitized bank debt at end-2016: CFAF 86.36 billion.
  - Structured nonbank debt: government balances payable to local nonbank institutions, individuals, or the CEMAC that have been securitized or subject to a formal reimbursement agreement according to a clearly defined schedule.
- Nonstructured debt: balances payable transferred to the national amortization fund [Caisse Autonome d’Amortissement] (CAA) not subject to formal reimbursement agreement or securitization.
  - Outstanding balance of nonstructured debt at end-2016: CFAF 113.96 billion.
  - Under the program, stock of nonstructured debt is part of stock of domestic payment arrears; payments on nonstructured debt deducted from domestic payment arrears and affect the primary balance on a cash basis.

### Net domestic financing of the government (definition and components)
- Net domestic financing of the government: sum of (i) net bank credit to the government; and (ii) net nonbank financing.
- Net bank credit to the government:
  - Equal to change in balance between government’s liabilities and assets with national banking system.
  - Assets include: cash resources on hand with the treasury; treasury deposits with the central bank (excluding HIPC and C2D accounts); credit balance of Caisse Autonome d'Amortissement accounts with commercial banks earmarked for debt reimbursement.
  - Government liabilities include: central bank financing (statutory advances; net IMF financing (disbursements net of reimbursements); refinancing of guaranteed bonds; treasury paper held by the central bank) and commercial bank financing (direct advances and loans, securities, and treasury bills and bonds held by local banks).
  - Net bank credit calculated based on BEAC data; subject to monthly reconciliations between the treasury and the BEAC.
- Net nonbank financing of the government includes:
  - Change in outstanding balance of government securities (treasury bills and bonds) issued in CFA francs on regional financial market and not held by local banking system.
  - Change in outstanding balance of structured nonbank domestic debt.
  - Privatization revenue.
  - Change in balance of correspondent bank accounts (including Account 42) and consignment accounts.
  - Change in balance of outstanding claims on the government abandoned by the private sector.
  - Net nonbank financing calculated by the public treasury.

### Domestic payment arrears (definitions and monitoring)
- Domestic payment arrears = (i) payment arrears on expenditure + (ii) payment arrears on domestic debt.
- Payment arrears on expenditure:
  - Defined as "balances payable" for which payment lag exceeds the regulatory period of 90 days.
  - Balances payable: unpaid obligations for which normal expenditure execution procedures were followed; include invoices due and not paid with public and private enterprises; exclude domestic financial debt service (principal and interest).
  - Balances payable under 90 days represent payments in progress.
  - Information for balances payable provided in Table 3 of management indicators (TABORD); treasury to monitor monthly.
- Payment arrears on domestic debt:
  - Defined as difference between amount due under domestic debt arrangement or reimbursement of treasury securities, bills, or bonds matured and the amount effectively paid after the payment deadline or maturity date.

### External payment arrears (definition)
- External payment arrears: external debt obligations of the government not paid when due in accordance with contractual terms (taking into account contractual grace periods).
- Excludes arrears on external financial obligations subject to rescheduling.

### Quantitative program objectives (QO) — general
- QOs specified in Table 1 of the MEFP; assessed on cumulative basis from beginning of the calendar year unless noted otherwise.
- Cumulative level of miscellaneous expenditure not otherwise classified (including TOFE errors and omissions) for a given month should not exceed 5 percent of cumulative expenditure for that month, in absolute value; if exceeded, comprehensive reconciliation with IMF staff.

### A. Non-oil Primary Balance (Performance criterion)
- Floor for non-oil primary balance (commitment basis) defined as QO in Table 1 of the MEFP.
- Non-oil primary balance: difference between primary balance defined in paragraph 12 and oil revenue defined in paragraph 6.
- Reporting cutoff: detailed data on government financial operations (primary balance, oil revenue, miscellaneous expenditure not otherwise classified) transmitted monthly within six weeks from end of month.

### B. Net Domestic Financing of the Government Excluding Net Financing from the IMF (Performance criterion)
- Ceiling on net domestic financing excluding net IMF financing defined as QO in Table 1 of the MEFP.
- Adjustment: ceiling adjusted if disbursements of external budget support net of external debt service and payment of external arrears are below programmed levels.
- Quarterly adjustment mechanism: at end of each quarter, if disbursements of external budget support are below (above) programmed amounts, relevant quarterly ceilings adjusted upward (downward) commensurately, within the limit of CFAF 120 billion starting from 2017 Q4 onwards. This ceiling may be revised to reflect rate of budget aid disbursements during the year.
- Reporting cutoff: detailed data on net domestic financing and status of budget support disbursements, reimbursement of external debt service, and status of external arrears submitted monthly within six weeks after end of month.

### C. Disbursement of Non-concessional External Debt (Performance criterion)
- Ceiling on disbursements of non-concessional external debt defined as QO in Table 1 of the MEFP; applicable to contractual debt for project financing.
- Based on external debt definition in paragraph 14 and concessionality concept in paragraph 15.
- Reporting cutoff: detailed information on disbursements of external debts contracted by the government reported within six weeks after end of month, indicating loan signing dates and distinction between concessional and non-concessional loans.

### D. Net Borrowing of the Central Government from the Central Bank (Performance criterion)
- Ceiling on net claims of the central government from the BEAC defined as QO in Table 1 of the MEFP.
- Criterion: difference between Central Bank’s claims on government (excluding IMF financing) and cash balances and total deposits of the Treasury with the Central Bank including balance of special account of unused statutory advances.
- Special account balance monitored regularly to maintain targets in Table 1 of the MEFP.
- Adjustment: ceiling adjusted if disbursements of external budget support are below programmed levels.
- Quarterly adjustment: same mechanism as paragraph 26 (within CFAF 120 billion starting from 2017 Q4).
- Reporting cutoff: detailed information on all financing from the BEAC to the government and balance of special account of unused statutory advances reported within six weeks after end of month.

### E. Non-accumulation of External Payment Arrears (Performance criterion)
- Ceiling of zero on accumulation of external payment arrears defined as continuous QO in Table 1 of the MEFP.
- Applies to accumulation of new external arrears as defined in paragraph 19.
- Government undertakes not to accumulate any new external payment arrears, except arrears subject to rescheduling.
- Measured cumulatively from time of program approval; monitored continuously.
- Reporting cutoff: data on balances, accumulation, and reimbursement of external arrears reported within six weeks after end of each month; any occurrence of new external arrears should be immediately reported to the Fund.

### F. New Non-concessional External Debt Contracted or Guaranteed by the Government (Performance criterion)
- Ceiling on new non-concessional external debt contracted or guaranteed by the government defined as continuous QO in Table 1 of the MEFP.
- Applies to external debt as in paragraph 14, using concessionality definition in paragraph 15; applies to government guarantees that are contingent liabilities.
- Applicable to public enterprises receiving government transfers, municipalities, and other public sector entities.
- Not applicable to borrowing in CFA francs, treasury bills and bonds issued in CFA francs on CEMAC regional market, regular short-term supplier loans, regular import credits, loans from the IMF, or debt relief obtained as rescheduling or refinancing.
- Ceiling applies per calendar year, not cumulatively from program approval.
  - 2017 ceiling: applies from program approval until December 31st, 2017.
  - 2018 ceiling: applies to new non-concessional debt contracted or guaranteed in 2018.
  - 2018 ceiling value: CFAF 436 billion.
- Adjustment: ceiling adjusted upwards to accommodate budget support from the World Bank, the AFDB and France for debt management purposes, up to amounts indicated in memorandum item Nr. 1 of MEFP Table 1.
- Reporting cutoff: monthly situation of all loans (conditions and creditors) contracted by the government reported within six weeks after end of month; same obligation for guarantees. Any contracting or guaranteeing of debt should be immediately reported to the Fund.

### II. Other indicative quantitative objectives
- G. Non-oil Revenue:
  - Floor on non-oil revenue (paragraph 7) defined as an indicative objective in Table 1 of the MEFP.
- H. Net Accumulations of Domestic Payment Arrears:
  - Ceiling on net accumulations of domestic payment arrears defined as an indicative objective in Table 1 of the MEFP.
- I. Social Expenditure:
  - Floor on social expenditure (paragraph 11) defined as an indicative objective in Table 1 of the MEFP; monitored regularly.
  - Reporting cutoff: data on government's financial position as in government financial operations table, detailed listing of revenue highlighting oil revenue, domestic payment arrears, and status of social expenditure execution must be reported within six weeks after end of month.
- J. Share of Exceptional Expenditures on Total Authorized Expenditures Excluding Debt:
  - Ceiling on share of exceptional expenditures on total authorized expenditures excluding debt defined as an indicative target in Table 1 of the MEFP.
  - Calculated as ratio between exceptional expenditures (expenditures excluding debt service paid without prior authorization, including cash advances, provisional budget commitments, and advance funds) and total authorized expenditures excluding debt service that are domestically financed.
  - Monitoring: exceptional expenditures monitored regularly as part of program implementation.
  - Reporting cutoff: monthly accounting statements showing amount of cash advances, provisional budget commitments, and advance funds must be reported to IMF staff within 3 weeks of the end of each month.

*International Monetary Fund — cr18235 (chapter/section content)*

### 45. The quantitative data on the government's quantitative and indicative objectives will be

### 45. The quantitative data on the government's quantitative and indicative objectives will be

### Summary of data reporting requirements (major fiscal and related items)
- Government financial operations table (TOFE) and customary annex tables  
  - Responsible institution: Ministry of Finance (MINFI)  
  - Frequency: Monthly  
  - Reporting Lag: 6 weeks  
  - Note: Data on execution of investments financed with external grants and loans must be available in a timely manner; if physical execution information is not available, use information on requests to withdraw funds from donors.
- Domestic budget financing (net bank credit to the government, stock of treasury bills and bonds pending reimbursement, domestic debt reimbursement status, privatization revenue, and abandoned claims)  
  - Responsible institutions: MINFI/BEAC  
  - Frequency: Monthly  
  - Reporting Lag: 6 weeks
- Implementation status of social expenditure defined in Paragraph 11  
  - Responsible institution: MINFI  
  - Frequency: Monthly  
  - Reporting Lag: 6 weeks
- Status of balances payable for the current fiscal year (orders unpaid), distinguishing between those over 90 days and those under 90 days  
  - Responsible institution: MINFI  
  - Frequency: Monthly  
  - Reporting Lag: 6 weeks
- Statistics on external debt contracted and guaranteed (detailed listing of external debt service matured/paid, list of new loans specifying the financial conditions, loans guaranteed and external arrears, and list of arrangements in the process of negotiation)  
  - Responsible institutions: MINFI/CAA  
  - Frequency: Monthly  
  - Reporting Lag: 6 weeks (and the contracting or guaranteeing of external debt, and the occurrence of external arrears should be immediately reported)
- Quarterly consistency report linking monetary statistics, TOFE net domestic financing, and external debt/net external financing  
  - Responsible institutions: MINFI/BEAC  
  - Frequency: Quarterly  
  - Reporting Lag: 8 weeks

### Additional periodic reporting items (selected)
- Data on implementation of the public investment program, including a detailed listing of financing sources  
  - Responsible institutions: MINFI/MINEPAT/CAA  
  - Frequency: Quarterly  
  - Reporting Lag: 6 weeks
- Accounting statements showing amount of cash advances, provisional budget commitments, and advance funds  
  - Responsible institution: MINFI  
  - Frequency: Monthly  
  - Reporting Lag: 3 weeks
- Monthly report on validation of TABORD and balance of accounts based on contradictory checking by different administrations  
  - Responsible institution: MINFI  
  - Frequency: Monthly  
  - Reporting Lag: 6 weeks
- Prices, consumption, and taxation of petroleum products (price structure, volumes, breakdown of tax revenue, unpaid subsidies)  
  - Responsible institution: MINFI  
  - Frequency: Monthly  
  - Reporting Lag: 4 weeks
- Monthly statement of correspondent accounts (including Account 42) and consignment deposits with the treasury, broken down by major categories  
  - Responsible institution: MINFI  
  - Frequency: Monthly  
  - Reporting Lag: 6 weeks
- Revenue forecasts and outturns for DGI, DGD, and DGTCFM by type of tax (annual and monthly)  
  - Responsible bodies: DGI, DGD, DGTCFM  
  - Frequency: Monthly  
  - Reporting Lag: 6 weeks
- VAT reimbursement balance (requests, payments, status of VAT reimbursement account)  
  - Responsible institutions: MINFI/DGI  
  - Frequency: Monthly  
  - Reporting Lag: 6 weeks
- Status of SNH (volumes exported, prices, exchange rates, operating costs, spending advances, commitments to the government, and balance transferable to the Treasury)  
  - Responsible institution: MINFI  
  - Frequency: Monthly  
  - Reporting Lag: 6 weeks
- Budgetary and accounting statement showing payment of utility bills to utility companies (ENEO, CAMWATER, CAMTEL, SONARA)  
  - Responsible institution: MINFI  
  - Frequency: Monthly  
  - Reporting Lag: 3 weeks
- Situation of payments of subsidies and tax liabilities of public enterprises  
  - Responsible institution: MINFI  
  - Frequency: Quarterly  
  - Reporting Lag: 6 weeks

### Monetary, external, and real sector reporting
- Consolidated balance sheet of monetary institutions  
  - Responsible institution: BEAC  
  - Frequency: Monthly  
  - Reporting Lag: 6 weeks
- Provisional comprehensive monetary survey  
  - Responsible institution: BEAC  
  - Frequency: Monthly  
  - Reporting Lag: 6 weeks
- Final comprehensive monetary survey  
  - Responsible institution: BEAC  
  - Frequency: Monthly  
  - Reporting Lag: 10 weeks
- Government net position; balance of special account of unused statutory advances; intervention rate and borrowing and lending interest rates  
  - Responsible institution: BEAC  
  - Frequency: Monthly  
  - Reporting Lag: 6 weeks
- Any revision of balance of payments data (including services, private transfers, official transfers, and capital transactions)  
  - Responsible institutions: BEAC/MINFI  
  - Event-based (on revision)  
  - Reporting Lag: 2 weeks
- Provisional national accounts and any revision of the national accounts  
  - Responsible institution: INS  
  - Frequency: Annual (provisional)  
  - Reporting Lag: 7 months after year-end
- Quarterly national accounts  
  - Responsible institution: INS  
  - Frequency: Quarterly  
  - Reporting Lag: 3 months
- Disaggregated consumer price indices (Yaoundé and Douala)  
  - Responsible institution: INS  
  - Frequency: Monthly  
  - Reporting Lag: 2 weeks
- Quarterly inflation note  
  - Responsible institution: INS  
  - Frequency: Quarterly  
  - Reporting Lag: 3 months

### Structural reforms, legal and other reporting
- Any official report or study devoted to Cameroon’s economy, from its date of publication or finalization  
  - Responsible institution: MINEPAT  
  - Reporting Lag: 2 weeks
- Any decision, decree, law, order, or circular having economic or financial implications, from its publication date or effective date  
  - Responsible institutions: MINFI/MINEPAT  
  - Reporting Lag: 2 weeks

### Key institutional and financial facts (from the document)
- IMF Quota: 276.00 (SDR Million) = 100.00 percent of quota  
- Fund holdings of currency: 274.94 (SDR Million) = 99.61 percent of quota  
- Reserve Tranche Position: 1.07 (SDR Million) = 0.39 percent of quota  
- SDR net cumulative allocation: 177.27 (SDR Million) = 100.00 percent of allocation; holdings: 15.26 (SDR Million) = 8.61 percent of allocation  
- Outstanding Purchases and Loans (SDR Million, % Quota): ESF RAC Loan 27.86 = 10.09; ECF Arrangements 207.80 = 75.29  
- Latest ECF arrangement: Date of approval Jun 26, 2017; Date of expiration Jun 25, 2020; Amount Approved 483.00 (SDR Million); Amount Drawn 207.00 (SDR Million)  
- Projected Payments to Fund (SDR millions): Forthcoming 2018 principal and charges/interest totals show principal 9.82 and charges/interest 0.76 for 2018; totals given as 10.58 for 2018 and 20.38 for 2019 and 1.53 for 2020 in the table format
- HIPC Decision point date: Oct-00; Assistance committed by all creditors (US$ Million): 1,267.00; Of which IMF assistance (US$ million): 37.04 (SDR equivalent 28.62)  
- MDRI-eligible debt (SDR Million): 173.26; Financed by MDRI Trust 149.17; Remaining HIPC resources 24.09
- Exchange arrangement: Cameroon participates in a currency union (CEMAC). CFA franc pegged to the euro at the fixed rate of CFAF 655.957 per euro. Local currency equivalent: CFAF 807.4=SDR 1, as of December 31, 2017.
- National accounts rebasing: INS rebased national accounts to 2005 in July 2017 and is incorporating source data to base year 2015.
- Data dissemination/e-GDDS: Cameroon began publishing critical macroeconomic data on the INS website—the National Summary Data Page (NSDP)—in July 2017.

### Statistical assessment and data adequacy (high-level findings)
- General: Data provision has shortcomings, but is broadly adequate for surveillance; scope for improvements in quality, coverage, and timeliness across most macroeconomic datasets.
- Government finance statistics weaknesses include:  
  - incomplete compilation of budget implementation data on a commitment and, to some extent, on a cash basis;  
  - lack of information on financial situation of local governments;  
  - poor monitoring of cross-liabilities in the public sector and of public enterprise debt;  
  - lack of comprehensive and timely financial information on public enterprises.
- Authorities’ planned improvements: establish comprehensive fiscal accounts on a commitment basis; adopt functional classification of the budget; monitor the float (difference between cash and commitment balances); enhance transparency of oil sector financial operations; collect data on operations of all public enterprises (2018 budget included an annex with detailed SOE financial information—Livre vert).
- Monetary statistics shortcomings: reporting delays (up to two months for SRFs), lack of data for interest rates offered by financial institutions to non-financial entities, exclusion of deposit-taking microfinance institutions from the depository corporation survey.
- Balance of payments: BOP data are reported annually with significant delays; yearly IIP data were submitted for the first time in December 2016 for years 2012–15.
- External debt data: Broadly adequate for surveillance for public and explicitly guaranteed debt; Caisse Autonome d'Amortissement (CAA) maintains a fairly comprehensive database, but debt disbursements and position statements are not regularly received from some foreign creditors, impairing real-time monitoring.
- CEMAC TOFE Directive target: authorities should focus on implementation of the CEMAC TOFE Directive 5/11 requesting compilation and publication of a TOFE for general government (based on GFSM2001) by January 1, 2024.

### Debt sustainability and policy recommendations (selected)
- Current assessment: Cameroon’s risk of external debt distress remains high. The policy-dependent threshold for the present value of debt to exports and debt service to exports are breached in the baseline program scenario as well as under standard stress tests.
- Policy actions required to mitigate risks to public debt include:  
  - a resolute and effective fiscal consolidation;  
  - a shift in the composition of new borrowing towards concessional loans;  
  - enhanced controls on externally-financed investment projects at all levels of government;  
  - implementation of policies to boost growth and non-oil exports;  
  - strengthening of public debt management.

*Prepared by the staffs of the International Monetary Fund and the International Development Association; June 22, 2018.*

### 1.      Public debt increased to 38.2 percent

### 1.      Public debt increased to 38.2 percent

### Overview
- Total public and publicly guaranteed debt (external plus domestic) increased from a revised 33.3 percent of GDP in 2016 to 38.2 percent in 2017.
- The increase is explained by two factors:
  - (i) broadening of the definition of public debt to include all SONARA debt due to third parties (1.8 percent); and
  - (ii) a larger-than-expected fiscal deficit at end-2017, financed by higher external disbursement and higher expenditure float.

### Stock and composition of debt
- Total PPG debt:
  - 2016 First Review: 31.5 percent of GDP
  - 2016 Revised perimeter: 33.3 percent of GDP
  - 2017 Estimated: 38.2 percent of GDP
- 2017 split (as reported in Text Table 1):
  - Domestic: 12.6 percent of GDP
  - External: 25.6 percent of GDP
- SONARA debt included in DSA:
  - SONARA debt reported as 3.0 percent of GDP in one table entry; elsewhere SONARA debt is noted as 4 percent of GDP included in the DSA analysis.
- External debt composition (Text Table 2, percent of GDP):
  - Multilateral: 7.3
  - Bilateral Paris Club (PC): 3.7
  - Bilateral non-PC: 7.9
  - Commercial: 6.4
  - Total external: 25.6

### Contracted-but-undisbursed debt
- Stock of contracted-but-undisbursed debt:
  - Reached CFAF 4.5 trillion or 23 percent of GDP in 2017 (up from 20 percent of GDP at end-2016).
  - Total undisbursed debt (percent of GDP): 2016 = 22.7; 2017 = 25.6.
- Creditor shares in undisbursed loans:
  - China’s share dropped from 36 percent at end-2016 to 28 percent at end-2017.
  - Multilateral creditors now account for over 40 percent of undisbursed debt.
  - Commercial loans account for 15.6 percent of the undisbursed amount.
- Factors behind large undisbursed stock:
  - Normal project execution lags.
  - Delays in large infrastructure projects.
  - Non-performing projects with very low or nil disbursements owing to lack of maturation or lack of available counterpart funds.

### Domestic bank debt and instruments
- Domestic bank debt remains low at 8 percent of GDP in 2017.
- Domestic debt composition skewed toward long term; T-bills account for 20 percent of domestic debt.

### Coverage adjustments and SOE debt
- Coverage expansion for this DSA:
  - Entire debt to the private sector of the oil refinery SONARA, estimated at 3 percent of GDP, is included.
  - Other liabilities linked to other SOEs remain small and limited to their external debt (0.1 percent of GDP).
- SOE debt not yet covered by the DSA remains significant:
  - SOE debt stood at 12.5 percent of GDP at end-2016.
  - Staff agreed with authorities not to include SOEs ex-SONARA in the debt definition for now, while working towards expanding coverage to include all non-financial SOEs.
  - Given SONARA’s debt (4 percent of GDP) is included, the existing stock of SOE debt not included in this DSA (about 8.5 percent of GDP) could give rise to much lower contingent liabilities.
- SOE debt composition and trends (Text Box 1 / table):
  - Total SOE debt: 2014 = 11.7 percent of GDP; 2015 = 12.4 percent of GDP; 2016 = 12.5 percent of GDP.
  - Over two thirds of outstanding SOE debt is financial (banks, securitized debt and other loans) and suppliers’ debt.
  - Cross-debts: a substantial portion of gross SOE debt, exceeding 2 percent of GDP, is owed to the state; SOE claims on the state declined to 0.3 percent of GDP at end-2016 (1.5 percent in 2014).
- SONARA specifics (table):
  - SONARA total debt: 2014 = 5.0 percent of GDP; 2015 = 4.5 percent; 2016 = 4.2 percent; 2017 = 4.0 percent.
  - At end-2017, reported state debt vis-à-vis the refinery stood at 0.5 percent of GDP; the refinery’s debt to the state mainly in the form of tax and customs arrears stood at 1.2 percent of GDP.

### Institutional capacity and data issues
- Capacity to monitor and manage public debt is adequate and improving, but discrepancies persist between the ministry of finance and the debt agency.
- Progress: making CNDP approval a requirement for all externally financed projects; publication of a “livre vert” listing companies where the state or public entity is a shareholder and EPICs, expected to be updated yearly.
- Remaining weaknesses:
  - Some externally financed project proposals advance without preliminary CNDP authorization.
  - Tracking of project loan disbursements remains inadequate, often leading to significant ex-post revisions in external debt data.
  - Need for rapid and concrete actions to reduce SENDs, particularly loans signed over four years ago with very low or zero disbursement rates.

### Macroeconomic assumptions underpinning the baseline (Text Table 3 highlights)
- Growth:
  - DSA 2017 Real GDP growth: 2016–17 = 3.8 percent; 2018–22 = 4.4 percent; 2023–38 = 5.1 percent.
  - Compared with prior DSAs: DSA 2016 growth 2016–17 = 5.2 percent; DSA 2015 growth 2016–17 = 5.9 percent.
- Total revenue excluding grants (percent of GDP):
  - DSA 2017: 2016–17 = 15.0; 2018–22 = 16.0; 2023–38 = 17.2.
- Exports of goods and services (percent of GDP):
  - DSA 2017: 2016–17 = 18.9; 2018–22 = 16.1; 2023–38 = 14.6.
- Oil price (US dollars per barrel):
  - DSA 2017: 2016–17 = 47.8; 2018–22 = 56.7; 2023–38 = 53.6.
- Financing assumptions:
  - Financing gap during 2018–20 assumed fully covered by IMF financing and budget support from donors.
  - Projected new debt skewed towards multilaterals; grant element of new borrowing assumed to remain relatively high through the projection horizon.

### External debt sustainability
- Cameroon classified as weak policy performer: three-year average CPIA score = 3.2 (scale 1–6).
- Policy-dependent thresholds for this category:
  - PV of debt-to-exports ratio: 100 percent
  - PV of debt-to-revenue ratio: 200 percent
  - PV of debt service-to-exports ratio: 30 percent
  - Debt service-to-exports ratio: 15 percent
  - Debt service-to-revenue ratio: 18 percent
- Key metrics and breaches:
  - PV of external PPG debt-to-exports reached 103 percent in 2017, breaching its threshold, and remains above it until 2035; average deviation to the threshold is about 16 percent throughout the period.
  - PV of external debt stood at 19.8 percent of GDP and 132 percent of government revenues (excluding grants) at end-2017.
  - PV of debt-to-GDP ratios declined by about 15 percent compared to the 2016 DSA due to GDP rebasing in July 2017 and remain below thresholds.
- Debt service and liquidity:
  - External debt service to export ratio remains below the threshold over the program horizon but rises to 15.4 percent in 2023–25 (slightly above its threshold) due to repayment in three yearly instalments of the US$750 million 2015 Eurobond; it then quickly declines after 2025.
  - PV of external debt service to revenue remains below its threshold through the projection horizon.
- Stress tests:
  - PV of debt-to-exports breaches threshold under all eight standardized stress tests.
  - Debt-service-to-exports breaches under four of eight tests.
  - Most severe shocks are those that diminish export growth for a short interval.
  - Under the combined scenario, PV of debt-to-GDP briefly and marginally breaches its threshold, and PV of debt-to-revenue approaches but does not breach it in 2020.
  - Debt-service-to-revenue ratio marginally breaches its threshold in 2019–25 under a 30 percent nominal depreciation scenario.

### Public sector debt sustainability
- Public debt trajectory:
  - Public debt projected to peak at 38.7 percent of GDP in 2018 and decline to below 30 percent of GDP by 2030.
  - PV of total public sector debt as a share of GDP expected to reach 33 percent in 2018, close to the DSF benchmark level of 38 percent of GDP for weak policy performers, then decline to 15 percent of GDP in the long term.
  - PV of total public debt as a share of revenue projected to fall from 216 percent in 2017 to 169 percent in 2023 and 91 percent in the long term.
- Shock scenarios:
  - A 30-percent real depreciation would push the PV of public debt to 40 percent of GDP next year (reaching the policy threshold) before declining steadily.
  - A 10 percent contingent liabilities shock yields similar results (note: this shock is larger than the total stock of SOE debt not included in the DSA plus realization of existing contingent liabilities on existing PPPs).

### Risks, conclusions, and policy recommendations
- Assessed risk of debt distress: high.
  - PV of debt-to-exports and debt-service-to-exports ratios breach policy-dependent thresholds over several years, leading to categorization as “high” risk of debt distress.
- Key policy imperatives:
  - Steadfast implementation of ambitious fiscal and structural reforms supported by the IMF program to mitigate risks.
  - Deep structural reforms to improve competitiveness and achieve economic diversification (reducing vulnerabilities expressed as proportions to exports).
  - Fiscal consolidation and a prudent borrowing policy skewed towards concessional loans to keep public debt dynamics sustainable and rebuild buffers ahead of upcoming high debt repayments.
  - Improve monitoring and management of public debt, including reducing SENDs (particularly old loans with low or zero disbursement rates) and strengthening CNDP oversight and disbursement tracking.

*IMF staff report (cr18235) — Cameroon: Public debt developments and debt sustainability analysis*

### 18.      Authorities’ view. The authorities noted that large infrastructure needs, including for the

### 18.      Authorities’ view

### Rationale for recent increase in debt and near-term outlook
- Large infrastructure needs, including for the upcoming African Cup of Nations (CAN), are an exceptional factor driving the recent increase in debt.
- As several large projects come to fruition in the coming months, the authorities expect the upward pressure on debt would start easing.
- The authorities are confident that steady improvements in non-oil exports and higher growth in the medium term would ensure external sustainability over the projection horizon.
- The authorities plan to continue prioritizing concessional loans and contract new debt only to fund critical projects with proven strong growth or social potential.
- The authorities maintain that only a fraction of SONARA’s debt to the private sector (that came under distress following the refinery’s losses due to the fixed pump prices) should be included in the definition of public debt.

### Recent macroeconomic developments (authorities’ perspective)
- Real GDP grew by about 3.2 percent last year, supported by buoyant non-oil activity and investments in electricity supply.
- Growth is expected to accelerate to above 4 percent in 2018 on the back of completed road and energy projects.
- Inflation is expected to remain subdued.
- Spending overruns occurred at the end of last year and during the complementary period for the 2017 budget execution, notably due to:
  - spending pressures related to socio-political tensions and terrorist threats;
  - preparation of CAN scheduled for 2019 in Cameroon;
  - clearance of arrears to the electricity company (ENEO).
- Non-oil revenues exceeded projections by 0.7 percent of GDP at end-2017, supported by efforts to collect VAT and increased export receipts; this performance softened in Q1 2018 due to lower growth and trade.
- Public debt-to-GDP ratio rose by 4 percentage points due to:
  - higher-than-expected disbursements related to externally-financed projects;
  - conversion of BEAC statutory advances into long-term debt;
  - inclusion of the debt of the refinery company (SONARA) due to marketers.
- Tighter monetary conditions and deceleration of economic activity slowed growth of credit to the private sector.
- Cash flow difficulties in the private sector translated into banks’ lending more short-term financing to businesses and an increase in non-performing loans (NPLs) in early 2018.
- Exports of commodities and manufactured products performed well while imports decreased significantly amid fiscal consolidation efforts.
- Improved current account position, enhanced enforcement of foreign exchange regulations, and lower private capital outflows contributed to the recovery of net foreign assets and rebuilding of foreign exchange reserves.

### Policy stance and corrective measures
- The authorities are taking corrective measures as laid out in their Memorandum of Economic and Financial Policies (MEFP) to bring back the fiscal situation in line with program targets.
- The Cameroonian government is pursuing fiscal consolidation to help build up external buffers.
- At the regional level, efforts are supported by implementation of tight monetary policy and foreign exchange regulations.
- Going forward, the authorities will:
  - continue prioritizing concessional loans;
  - contract new debt only to fund critical projects with proven strong growth or social potential.
- Treatment of SONARA debt: the authorities maintain that only a fraction of SONARA’s debt to the private sector should be included in public debt.

*Source: Statement by Mr. Daouda Sembene, Mr. Mohamed-Lemine Raghani, and Mr. Regis N'Sonde on Cameroon, July 6, 2018, and accompanying authorities’ view section.*

### 6. Program implementation has underperformed original expectations, notably on the

### cr18235 - 6. Program implementation has underperformed original expectations, notably on the

### Program implementation and quantitative performance
- Spending overruns resulted in the nonobservance of the PC on non-oil primary balance.
- Two other PCs at end-2017 on disbursements of non-concessional loans and net BEAC financing were missed amid the structuring of major development projects.
- The IT on the national oil company SNH direct interventions was missed with a narrow margin.
- Lower-than-expected bond issuance and non-disbursement of a portion of budgetary support by donors contributed to unfavorable program outcomes.
- No new non-concessional loans were signed between the conclusion of the first review and the date for this second review.
- PCs related to net domestic financing of the government and the accumulation of external payment arrears were met.
- All but one indicative targets (ITs) were met.
- Authorities are taking steps to enhance project planning and monitoring to prevent untimely disbursements in the future.

### Structural measures and benchmarks (SBs)
- Implementation of structural measures was strong; most SBs met.
- Measures included:
  - Strengthening fiscal policy and transparency.
  - Enhancing revenue mobilization.
  - Improving public finance and debt management, notably through tackling contingent liabilities, containing correspondent accounts and accounts without principal accountant.
  - Conducting an external audit of domestic arrears at end-2016 and designing a plan for their gradual clearance.
  - Extending to all credit and microfinance institutions access to creditor databases.
- Remaining SBs (observed with some delay or being implemented):
  - 2017 budget execution report.
  - Circular on implementing the projects’ maturation guide.
  - Computerization of the register of property collaterals.

### Authorities’ policy stance for 2018 and beyond
- Authorities remain determined to achieve program objectives for the rest of 2018 and to the end of the arrangement.
- Will pursue measures to prevent reoccurrence of fiscal overruns while protecting social spending in health, education, social protection, and gender equality.
- Will use the favorable economic outlook to advance fiscal and structural reforms to:
  - Broaden the non-oil revenue base.
  - Enhance the efficiency of public investment.
  - Strengthen the budgetary process.
  - Control public debt.
- To accelerate growth, authorities intend to:
  - Continue improving energy supply and key transport infrastructures.
  - Enhance the economy’s competitiveness.

### Revenue mobilization and fiscal adjustment
- Staff analysis indicates revenue and capital expenditure multipliers in Cameroon are small and in line with comparable countries (Selected Issues Paper), implying greater focus on revenue mobilization for growth-friendly fiscal adjustment.
- Fund technical support to the authorities’ revenue mobilization agenda will be important.
- 2018 budget objectives revised to boost non-oil revenues, limit investment spending, and incorporate non-budgeted expenditures for security and subsidies.
- Revenue-side actions for 2018 include:
  - Broadening the tax base and enhancing revenue collection.
  - Improving VAT management and considering options to improve VAT efficiency.
  - Enhanced monitoring and audits of large and medium-sized businesses.
  - Increased collection of tax arrears.
  - Greater use of electronic means for tax payments.
  - Customs administration measures: joint DGI-DGD audits and interfaces with sectoral ministries to fight frauds.

### Spending measures, savings targets, and arrears clearance
- Spending curtailment measures while preserving social spending include:
  - Continued cleaning of the payroll database to reduce "ghost" civil servants.
  - Additional cuts in goods and service expenditures in line with the Prime Minister’s circular.
  - Prioritization of domestically-financed capital spending.
  - Greater monitoring of budget execution.
  - Reinforced programming and monitoring of disbursements.
- These measures are expected to achieve budget savings equivalent to at least 2.3 percent of GDP.
- Government undertakes to prevent any increase in domestic arrears and clear domestic arrears validated through an audit.
- As of end- May 2018, the government has cleared the equivalent of 1.3 percent of GDP in domestic arrears.

### Medium-term revenue and PFM reforms
- Medium-term plans include:
  - Collection of property taxes through the electricity bill.
  - An action plan to gradually reduce tax expenditures, notably discretionary exemptions.
  - External financing arrangements for investment incorporating relevant taxes.
  - Urgent measures to better control budget execution and enhance fiscal discipline as laid out in the MEFP.
- PFM reforms with Fund and partner assistance to:
  - Enhance the quality of, and data on, expenditure.
  - Transpose into national laws CEMAC directives (draft decrees ready or to be finalized by year-end).
  - Pursue and expand cash flow management reforms.
  - Strengthen the government financial reporting system.
  - Improve effectiveness and quality of capital spending.
  - Strengthen management of SOEs.
- DGD and DGI to further enhance revenue collection, strengthen the taxpayer database and IT systems, and fight fraud and tax evasion.

### Debt strategy and actions to preserve debt sustainability
- Authorities will pursue prudent debt strategy and management, closely monitoring contingent liabilities to prevent a downgrading to "debt distress" of the country’s DSA rating and preserve debt sustainability.
- Borrowing plan revised, in consultation with partners, to integrate medium-term development priorities and give preference to projects with the least expensive financing.
- Preference for concessional borrowing over non-concessional financing provided concessional financing is available.
- Actions to reduce public debt stock include:
  - Reducing the balance of contracted but undisbursed debt (SEND) through a joint plan by the ministries of finance and planning.
  - Expanding to public enterprises and public establishments the collection of cross debts.
  - Improving the financial situation of SOEs, notably cash flow and financial viability of SONARA and SONATREL through implementation of best management practices.

### Macro-financial vulnerabilities and financial sector measures
- Sovereign risks dominate the banking sector in Cameroon (Selected Issues, Chapter 4).
- Fiscal consolidation and addressing contingent liabilities should help reduce risks to banks.
- Authorities committed to:
  - Finalize a cost and feasibility assessment of resolution options for distressed banks, in coordination with regional authorities and development partners.
  - Prepare an action plan to address NPLs, including building capacities in business law to ensure adequate treatment of disputes.
  - Train judicial specialists, including at least 30 judges, in resolution of banking disputes in main activity centers.
  - Rely on strengthened prudential standards to preserve financial sector stability, in coordination with regional supervisor COBAC.
- Authorities take note of staff’s recommendation to identify actions to tackle weaknesses in the AML/CFT framework and look forward to Fund technical assistance.
- Continue to attach high priority to fighting tax evasion and illicit financial flows.

### Competitiveness and private sector development
- Development of the private sector and economic diversification remain central to the transformation agenda.
- Measures will target:
  - Closing infrastructure gaps.
  - Promoting greater competitiveness.
  - Improving access of the private sector to financial services.
  - Reducing costs and delays related to foreign trade and congestion of the Port of Douala.
  - Simplifying tax collection procedures and reducing delays in payment of government invoices.
- Measures to improve credit access for SMEs and the public include:
  - Ongoing update of the financial inclusion strategy.
  - Consultations with development partners (World Bank, African Development Bank) to revise the business model for the SME bank.
  - Encouraging commercial banks to lend more to SMEs.

### Conclusion and requests
- Authorities are confident that policies and reforms in their MEFP will enable meeting objectives of the ECF-supported program and stand ready to take additional measures if necessary.
- The authorities request Directors’ support for completion of the second review under the ECF-supported program.
- They also request waivers of nonobservance of performance criteria (PCs) and modification of PCs.

*cr18235 - 6. Program implementation has underperformed original expectations, notably on the*

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_Source: https://www.imf.org/-/media/files/publications/cr/2018/cr18235.pdf_