## 1cmrea2020002

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### Executive summary and request for Fund support
- Request: financial assistance under the “exogenous shocks window” of the Rapid Credit Facility (RCF) equivalent to 60 percent of quota (SDR 165.6 million).
- Purpose: help Cameroon meet urgent balance of payments needs stemming from the COVID-19 pandemic, preserve fiscal space for essential COVID-19-related health expenditure, and catalyze additional donor support.
- Authorities’ immediate priorities: boost health and social protection spending and use counter-cyclical fiscal policy measures to limit the spread and humanitarian, economic, and financial impact of COVID-19.
- Conditionality/arrangements: request contingent on Executive Board approval of an extension of the ECF arrangement from June 25, 2020 to September 30, 2020 with a rephasing of access.

### Macroeconomic impact and projections
- Real GDP growth (2020):
  - Before shock: 3.8
  - After shock: -1.2 percent
- Projections and outlook:
  - GDP growth projected to fall sharply to -1.2 percent, about 5 ppt below the pre-pandemic projection.
  - Preliminary projection in Letter of Intent: real GDP growth could decline from 3.9 percent in 2019 to -1.2 percent in 2020 — down from a pre-pandemic projection of 3.8 percent at the time of the 5th review.
  - Selected table series (Real GDP growth): 2018: 4.1; 2019: 3.9; 2020: 3.7; 2021 (5th Rev.): 3.8; 2022 (Proj.): -1.2; 2023 (Proj.): 4.5; 2024–25 (Proj.): 4.4, 4.5, 5.0, 5.2 (sequence).
- Inflation and prices:
  - GDP deflator (annual change): 2018: 1.6; 2019: 1.7; 2020: 1.8; 2021–25 (selected): 1.9, 0.9, 2.3, 1.8, 1.6, 1.6, 1.7.
  - Consumer prices (average): 2018: 1.1; 2019: 2.4; 2020: 2.5; 2021–25 (selected): 2.4, 2.8, 2.3, 2.1, 2.0, 2.0, 2.0.
- Shock channels:
  - Pandemic-driven disruptions to production factors (capital and labor), credit retrenchment, economic losses from fatalities, and adverse confidence effects.
  - Reprofiling SONARA’s domestic bank debt became more likely with a new price structure; further delays pose risks to banks’ capital and liquidity.

### Balance of payments and external financing needs
- Resulting BOP financing need assessed at CFAF 628 billion, 2.8 percent of GDP.
- BEAC gross foreign assets projected to decline by CFAF 165 billion (US $280 million) compared to projections at the 5th review.
- Remittances in 2018: 1.6 percent of GDP.
- Text Table 2 (summary figures):
  - Total revenue and grants: 3,152 (13.9 percent of GDP)
  - Total expenditure: 4,162 (18.4 percent of GDP)
  - Overall balance (payment order basis): -1,010 (-4.5 percent of GDP)
  - Overall balance (cash basis): -1,127 (-5.0 percent of GDP)
  - Projected increase in financing needs: 497 (2.2 percent of GDP) / 628 (2.8 percent of GDP)
- Role of RCF and other donors:
  - Proposed RCF access of 60 percent of quota (CFAF 136 billion) represents 33 percent of the estimated residual external financing gap of CFAF 410 billion.
  - Prospective additional support from other donors (World Bank, AfDB, France, BCEAC) expected to fill CFAF 274 billion of remaining needs.
  - Authorities could access eligibility to the G20 debt moratorium to unlock potential financing.
  - Any remaining needs would need to be covered through policy adjustment.

### Fiscal impact and fiscal financing needs
- Increase in 2020 fiscal financing needs related to the pandemic estimated at CFAF 497 billion (2.2 percent of GDP).
- Overall 2020 fiscal deficit (cash basis) deteriorates to 5 percent of GDP, from 2.8 percent of GDP in the pre-virus baseline.
- Revenue impacts:
  - Lower oil revenue: 0.7 percent of GDP
  - Lower non-oil revenues: 0.6 percent of GDP
  - Revenues projected to drop by about 14 percent relative to the pre-virus baseline.
  - Expected shortfall in total domestic revenue of 1.3 percentage point of GDP in 2020 compared to pre-COVID-19 projections.
- Expenditure offsets and adjustments:
  - Decline in international oil prices estimated to allow reduced fuel subsidies by 0.5 percent of GDP, partly offsetting increased current expenditures (+0.8 percent of GDP) driven by health and social spending.
  - Under WEO oil price assumptions, 2020 non-tax revenue could outperform by at least CFAF 20 billion (0.1 percent of GDP) but staff did not include this windfall in projections due to oil price volatility.
  - Authorities considering measures: allow companies to defer payments of tax penalties, grant tax moratoriums for companies in extreme difficulty, subsidies to affected businesses, and drawing on committed external project loans to avoid contractionary impact.
- Central government totals (selected CFAF billions):
  - Total revenue and grants: 3,451 (2021), 3,716 (2022), 3,704 (2023), 3,651 (2024), 3,152 (2025 — 5th Rev.)
  - Total expenditure: 3,986 (2021), 4,235 (2022), 4,235 (2023), 4,163 (2024), 4,162 (2025 — 5th Rev.)
  - Overall balance (payment order basis), excluding grants: -621 (2021), -619 (2022), -631 (2023), -615 (2024), -1,111 (2025 — 5th Rev.)

### Preparedness and response plan (health and social measures)
- Preparedness and Response Plan total cost: CFAF 58 billion (text table total: 58.3 CFAF billion).
- Plan objectives:
  - (i) strengthen epidemiological surveillance through mass screening;
  - (ii) improve provision of medical care by upgrading hospitals’ technical capacities and supply of medications;
  - (iii) mitigate community spread through social distancing;
  - (iv) improve coordination of Covid-19 measures.
- Text Table: Cameroon: Preparation and Response Plan to COVID-19, 2020 (Summary of budgetary impact)
  - Active case finding — 17.4 (CFAF billion)
  - Management of confirmed cases — 34.0 (CFAF billion)
  - Social regulation — 5.5 (CFAF billion)
  - Governance and accountability — 1.5 (CFAF billion)
  - Total — 58.3 (CFAF billion)
- Social protection and business support measures to be specified in a global response plan under preparation.

### Revenue, tax administration, and near-term fiscal measures
- Measures to mitigate 2020 revenue loss:
  - Expand e-filing and on-line/web services to taxpayers.
  - Offer extended payment arrangements to enterprises with cash flow problems.
  - Establish “mobile payment” options for tax and non-tax payments.
  - Ensure continuity of trade processing and on-site customs presence/control.
  - Implement simplified and quick release procedures to clear goods necessary for immediate critical needs.
  - Strengthen collection of deferred tax penalties and payments under moratorium in 2021 via enforceable protocols.

### Monetary, banking, and liquidity measures (BEAC and domestic banking sector)
- BEAC Monetary Policy Committee (CPM) measures:
  - Loosened monetary policy stance; narrowed interest rate corridor; increased liquidity provision; widened range of private financial instruments accepted as collateral.
  - Encouraged BEAC management to propose reduction in haircuts on collateral and postponement by one year of principal repayment of consolidated central bank’s credits to member states.
  - Made available to BDEAC a financing line of FCFA 90 billion to finance public investment projects.
- Banking sector measures:
  - CPM recommended banks ensure continuity of financial services (including ATMs), strengthen remote banking, and reduce banking services costs.
  - Banking association initiative: maintain short-term credits to the real economy while expecting government not to increase domestic arrears.
  - COBAC: close monitoring of portfolio quality and profitability; recommendations on prudent and transparent loan restructuring.

### Medium-term financing, debt management, and external support
- Authorities considering G20 moratorium on bilateral government loan repayments, which could alleviate debt service by up to CFAF 100 billion in 2020.
- Discussions with the World Bank about doubling budgetary support to USD200 million.
- Authorities committed to avoid new non-concessional borrowing (NCB) and actively seeking concessional financing.
- Authorities identified about CFAF 229 billion of expected financing from development partners (World Bank, AfDB, France, and BDEAC).
- Financing assumptions and prospective entries (selected):
  - Prospective IMF-RCF: 136 (CFAF billion)
  - Other prospective financing (non-IMF): 274 (CFAF billion) — as reported in table sequences.
  - Exceptional financing entries: 410, 260, 181, 145, 0 (table sequence).

### IMF support under the Rapid Credit Facility (RCF) — eligibility and terms
- Eligibility and requests:
  - Authorities request extension of ECF arrangement to end-September 2020 and moving availability date for sixth review from May 31, 2020 to July 25, 2020 to allow RCF request of 60 percent of quota within PRGT limits.
  - RCF support warranted because Cameroon has urgent BOP needs not caused by donor withdrawal and lacks capacity to implement an upper credit tranche (UCT) program due to urgency.
- Debt and Fund exposure:
  - Cameroon assessed at high risk of debt distress; DSA dated February 2020 showed debt sustainable; updated DSA with COVID-19 shock suggests risks increased but debt remains sustainable conditioned on concessional resources and avoidance of additional NCB.
  - A disbursement of 60 percent of quota would result in Fund exposure to Cameroon of 2.3 percent of GDP in 2020.
  - Annual repayments will remain below 0.4 percent of GDP over the 2020-34 period and should peak at 0.3 percent of GDP and 2.1 percent of government revenue in 2026.
  - Access of 60 percent of quota, together with rephasing of availability date of the final 20 percent of quota disbursement beyond July 25, 2020, would place Cameroon at 100 percent of quota annual access normal limit and below 300 percent of the cumulative three years limit.

### Disbursement and safeguards
- RCF disbursements to be disbursed to the BEAC and on-lent to the government for urgent budgetary financing.
- BEAC safeguards: most recommendations from the 2017 safeguards assessment implemented; transition to IFRS for FY 2019 advancing; alignment of secondary legal instruments with its Charter recently concluded.

### Staff appraisal, needs, and policy recommendations
- Macroeconomic vulnerabilities:
  - Exposure to external demand and supply shocks from slowdown of major trading partners and falling commodity prices.
  - Containment efforts expected to further slow growth and widen fiscal and balance of payment deficits.
  - Health system described as weak and unprepared for a major outbreak.
- Urgent financing needs:
  - Covid-19-related financing needs in 2020 estimated at CFAF 497 billion (2.2 percent of GDP).
  - After secured financing and some drawdown of government deposits at BEAC, residual needs estimated at CFAF 410 billion (1.8 percent of GDP).
- Policy recommendations:
  - Accommodative fiscal and monetary policies to mitigate human and economic impact.
  - Scale up health spending to ensure infection prevention and control, improve case management, upgrade health facilities, and increase health personnel.
  - Strengthen social safety nets, subsidize basic medications, and provide support to affected companies.
  - Scale up efforts to prevent a collapse in revenue collection through tax and customs measures outlined.
  - Avoid new non-concessional borrowing to preserve debt sustainability and secure concessional support from partners.
  - Maintain strict budgetary controls, transparency, and audits for RCF-funded spending.

### Risks, scenarios, and stress testing
- Downside external risks:
  - More severe and prolonged COVID-19 pandemic causing widespread disruptions to economic activity, global trade, supply chains, and financial markets.
  - Large swings in energy prices, uncertainty in the OPEC+ alliance.
- Downside domestic risks:
  - Significant expansion of the local outbreak or a more persistent shock leading to larger casualties, sharper fall in growth, and higher financing needs.
  - Socio-political tensions and fiscal, financial, and debt sustainability risks related to SOEs (e.g., failure to turnaround SONARA).
- DSA stress-testing highlights:
  - PV of PPG external debt-to-exports ratio breaches its threshold in 2020 due to severe export drop; breaches of two external debt service indicators persist and are aggravated by the COVID-19 shock.
  - Mechanical risk ratings under the DSA: External DSA: High; Public DSA: High.
  - Tailored Test C1 (Combined contingent liabilities) shows elevated debt ratios (examples: 23 30 32 32 32 32 31 31 30 30 in table excerpts).
- Contingency:
  - If downside risks materialize, additional measures will likely be needed to ensure debt sustainability.

### Key fiscal and external indicators (selected exact figures)
- Financing gaps and balances (selected):
  - Financing gap listed in tables: 0 (2018), 3 (2019), 16 (2020), 25 (2021), 11 (2022), 62 (2023), 62 (2024), 52 (2025).
  - IMF-ECF entries in tables: 45, 45, 90, 90, 0, 0, 0, 0.
  - Prospective IMF-RCF: 136 (CFAF billion).
- Public debt (stock, percent of GDP):
  - 2018: 39.5; 2019: 40.8; 2020: 40.9; 2021–25 (selected): 40.8, 45.5, 45.2, 44.7, 44.1, 43.2, 41.7.
- Current account balance (percent of GDP, excluding grants):
  - 2018: -4.0; 2019: -4.1; 2020: -4.2; projected: -4.1, -6.2, -5.1, -4.2, -3.8, -3.5, -3.4.
- Oil price assumptions ($US per barrel):
  - 2018: 68.3; 2019: 61.8; 2020: 61.4; 2021–25 (selected): 57.9, 35.6, 37.9, 40.9, 43.2, 45.0, 46.4.
- Outstanding Fund credit (SDR millions selected):
  - 2018: 336.2; 2019: 372.6; 2020: 648.6; 2021: 648.6; 2022: 648.6; 2023: 607.2; 2024: 543.7; 2025: 447.1.

*Source: IMF staff report on Cameroon (April 28, 2020).*

### 165.6 million (about US$ 226   million,  60 percent of quota) to help Cameroon meet the urgent

### 1cmrea2020002 - 165.6 million (about US$ 226   million,  60 percent of quota) to help Cameroon meet the urgent

### Executive summary and request for Fund support
- Request: financial assistance under the “exogenous shocks window” of the Rapid Credit Facility (RCF) equivalent to 60 percent of quota (SDR 165.6 million).
- Purpose: help Cameroon meet urgent balance of payments needs stemming from the COVID-19 pandemic, preserve fiscal space for essential COVID-19-related health expenditure, and catalyze additional donor support.
- Authorities’ immediate priorities: boost health and social protection spending and use counter-cyclical fiscal policy measures to limit the spread and humanitarian, economic, and financial impact of COVID-19.
- Conditionality/arrangements: request contingent on Executive Board approval of an extension of the ECF arrangement from June 25, 2020 to September 30, 2020 with a rephasing of access.

### Macroeconomic impact and projections
- Real GDP growth (2020):
  - Before shock: 3.8
  - After shock: -1.2 percent
- Selected macro impacts (text and table findings):
  - GDP growth projected to fall sharply to -1.2 percent, about 5 ppt below the pre-pandemic projection.
  - Pandemic driven disruptions: production factors (capital and labor), credit retrenchment, economic losses from fatalities, adverse confidence effects.
  - Reprofiling SONARA’s domestic bank debt became more likely with a new price structure; further delays pose risks to banks’ capital and liquidity.

### Balance of payments and external financing needs
- External financing needs and BOP:
  - Resulting BOP financing need assessed at CFAF 628 billion, 2.8 percent of GDP.
  - BEAC gross foreign assets projected to decline by CFAF 165 billion (US $280 million) compared to projections at the 5th review.
  - Remittances in 2018: 1.6 percent of GDP.
- Text Table 2 (summary figures):
  - Total revenue and grants: 3,152 (13.9 percent of GDP)
  - Total expenditure: 4,162 (18.4 percent of GDP)
  - Overall balance (payment order basis): -1,010 (-4.5 percent of GDP)
  - Overall balance (cash basis): -1,127 (-5.0 percent of GDP)
  - Projected increase in financing needs: 497 (2.2 percent of GDP) / 628 (2.8 percent of GDP)
- Role of RCF and other donors:
  - Proposed RCF access of 60 percent of quota (CFAF 136 billion) represents 33 percent of the estimated residual external financing gap of CFAF 410 billion.
  - Prospective additional support from other donors (World Bank, AfDB, France, BCEAC) expected to fill CFAF 274 billion of remaining needs.
  - Authorities could access eligibility to the G20 debt moratorium to unlock potential financing.
  - Any remaining needs would need to be covered through policy adjustment.

### Fiscal impact and fiscal financing needs
- Increase in 2020 fiscal financing needs related to the pandemic estimated at CFAF 497 billion (2.2 percent of GDP).
- Overall 2020 fiscal deficit (cash basis) deteriorates to 5 percent of GDP, from 2.8 percent of GDP in the pre-virus baseline.
- Revenue impacts:
  - Lower oil revenue: 0.7 percent of GDP
  - Lower non-oil revenues: 0.6 percent of GDP
  - Revenues projected to drop by about 14 percent relative to the pre-virus baseline.
- Expenditure offsets and adjustments:
  - Decline in international oil prices estimated to allow reduced fuel subsidies by 0.5 percent of GDP, partly offsetting increased current expenditures (+0.8 percent of GDP) driven by health and social spending.
  - Under WEO oil price assumptions, 2020 non-tax revenue could outperform by at least CFAF 20 billion (0.1 percent of GDP) but staff did not include this windfall in projections due to oil price volatility.
  - Authorities considering measures: allow companies to defer payments of tax penalties, grant tax moratoriums for companies in extreme difficulty, subsidies to affected businesses, and drawing on committed external project loans to avoid contractionary impact.

### Policy response, IMF engagement, and recommendations
- Immediate policy stance:
  - Accommodative fiscal and monetary policies are warranted given the sudden and pressing nature of the shocks to mitigate human and economic impact.
  - Scale up health spending to ensure infection prevention and control, improve case management, upgrade health facilities, and increase health personnel.
  - Strengthen social safety nets, subsidize basic medications, and provide support to affected companies.
- Medium-term commitments:
  - Authorities remain committed to their reform agenda under the ECF arrangement and plan to undertake adjustments to return to fiscal consolidation once the crisis abates to safeguard debt sustainability and ensure a strong recovery.
- IMF guidance and safeguards:
  - IMF emergency financing under the RCF will support government efforts to mitigate the twin shocks and is expected to catalyze additional assistance from development partners.
  - Strict budgetary controls and transparency, including audits, are required to ensure that assistance under the RCF meets its intended objectives.
  - Additional assistance from development partners will be critical to fill the remaining financing need.

### Risks and scenarios
- Downside external risks:
  - More severe and prolonged COVID-19 pandemic causing widespread disruptions to economic activity, global trade, supply chains, and financial markets.
  - Large swings in energy prices, with uncertainty in the OPEC+ alliance.
- Downside domestic risks:
  - Significant expansion of the local outbreak or a more persistent shock leading to larger casualties, sharper fall in growth, and higher financing needs.
  - Socio-political tensions and fiscal, financial, and debt sustainability risks related to SOEs (e.g., failure to turnaround SONARA) could limit authorities’ ability to respond.
- Contingency:
  - If downside risks materialize, additional measures will likely be needed to ensure debt sustainability.

*Source: IMF staff report on Cameroon (April 28, 2020).*

### 9.      The government of Cameroon is taking steps to limit the spread of the pandemic and

### 9. The government of Cameroon is taking steps to limit the spread of the pandemic and alleviate its socio-economic impact

### Preparedness and response plan (health and social measures)
- The Preparedness and Response Plan envisages increased health spending to ensure adequate infection prevention and control and improved case management. The plan aims to:
  - (i) strengthen epidemiological surveillance through mass screening;
  - (ii) improve the provision of medical care to positive cases by upgrading hospitals’ technical capacities and supply of medications;
  - (iii) mitigate the community spread of Covid-19 through social distancing;
  - (iv) improve the coordination of Covid-19 measures.
- The plan’s total cost is estimated at CFAF 58 billion (text table below).
- Measures to mitigate the negative financial impact of the COVID-19 pandemic on the most vulnerable include strengthening existing social safety nets and providing support to affected businesses and households. These measures will be spelled out in a global response plan that is currently under preparation.

- Text Table: Cameroon: Preparation and Response Plan to COVID-19, 2020 (Summary of budgetary impact)
  - Operational Axes — Cost (CFAF billion)
    - Active case finding — 17.4
    - Management of confirmed cases — 34.0
    - Social regulation — 5.5
    - Governance and accountability — 1.5
    - Total — 58.3

### Revenue, tax administration, and near-term fiscal measures
- The authorities intend to mitigate the significant revenue loss in 2020 from the Covid-19 pandemic. Measures include:
  - Facilitating e-filing and payment obligations by expanding on-line/web services to taxpayers;
  - Offering extended payment arrangements to enterprises that are experiencing cash flow problems;
  - Establishing “mobile payment” options for tax and non-tax payments;
  - Ensuring continuity of trade processing and sufficient on-site presence/control by customs to protect revenue and the borders;
  - Designing and implementing simplified and (very) quick release procedures to clear goods deemed necessary for immediate critical needs;
  - Strengthening in 2021 the collection of deferred tax penalties and payments under moratorium from 2020 by signing and enforcing a protocol specifying the deadlines by which payments will have to be made.

### Monetary, banking, and liquidity measures (BEAC and domestic banking sector)
- The BEAC Monetary Policy Committee (CPM) announced a package of monetary easing measures:
  - Loosened monetary policy stance;
  - Narrowed its interest rate corridor;
  - Increased liquidity provision;
  - Widened the range of private financial instruments accepted as collateral for monetary policy operations.
- CPM encouraged BEAC management to propose to its Board:
  - A reduction in haircuts applicable to public securities and private instruments accepted as collateral for refinancing operations;
  - Postponement by one year of principal repayment of consolidated central bank’s credits to member states.
- The CPM recalled that the BEAC made available to the Development Bank of the Central African States (BDEAC) a financing line of FCFA 90 billion to finance public investment projects and invited the latter to make use of it.
- The CPM recommended that banks ensure continuity of financial services, including provision of cash through ATMs, strengthen operations of remote banking and reduce banking services costs.
- The banking association of Cameroon has taken the initiative for banks to maintain short term credits to the real economy but expects that the government will not increase domestic arrears.

### Medium-term financing, debt management, and external support
- The government is considering measures to manage the medium-term impact of the twin pandemic and terms of trade shocks.
- Following the Covid-19 shock, Cameroon accumulated a small amount of arrears to official and private creditors; the authorities have cleared these arrears.
- The authorities are actively considering the G20 moratorium on bilateral government loan repayments for lower income countries, which could alleviate debt service by up to CFAF 100 billion in 2020.
- Discussions are ongoing with the World Bank about the doubling of its budgetary support to USD200 million.
- The authorities are actively seeking concessional financing from development partners and are committed to avoid new non-concessional borrowing (NCB).
- The authorities have identified about CFAF 229 billion of expected financing from development partners (World Bank, AfDB, France, and BDEAC).
- Efforts to accelerate export diversification while maintaining debt sustainability are being continued through initiatives with support from the World Bank and the EU.

### IMF support under the Rapid Credit Facility (RCF) — eligibility and proposed terms
- Cameroon meets the eligibility requirements for support under the RCF:
  - The authorities request that the ECF arrangement be extended to end-September 2020, and the availability date for the sixth review (seventh disbursement) under the ECF arrangement be moved from May 31, 2020 to July 25, 2020. This would allow for an RCF request of 60 percent of quota within the normal PRGT access limits.
  - Support under the RCF is warranted because Cameroon has urgent balance of payments needs that, if not addressed, would result in an immediate and severe disruption; the BOP needs are not caused by a withdrawal of donors; and Cameroon lacks capacity to implement an upper credit tranche (UCT) program owing to the urgent nature of its BOP needs.
- Debt and repayment metrics and Fund exposure:
  - Cameroon is assessed at high risk of debt distress; however debt remains sustainable. The DSA dated February 2020 showed debt to be sustainable; the updated DSA incorporating the Covid-19 shock suggests that while risks have increased it continues to remain sustainable conditioned on the availability of concessional resources and avoidance of additional NCB.
  - A disbursement of 60 percent of quota would result in Fund exposure to Cameroon of 2.3 percent of GDP in 2020.
  - Annual repayments will remain below 0.4 percent of GDP over the 2020-34 period and should peak at 0.3 percent of GDP and 2.1 percent of government revenue in 2026.
  - Cameroon has an existing ECF arrangement approved on June 26, 2017, with an access level of 175 percent of quota. Access of 60 percent of quota, together with a rephasing of the availability date of the final 20 percent of quota disbursement of the sixth and final review beyond July 25, 2020, would place Cameroon at 100 percent of quota annual access normal limit and below 300 percent of the cumulative three years limit.

### Disbursement and safeguards
- RCF disbursements will be disbursed to the BEAC and be on-lent to the government to provide urgent budgetary financing.
- The BEAC has implemented most recommendations from the 2017 safeguards assessment. Work is advancing on the full transition to IFRS for FY 2019 and alignment of secondary legal instruments with its Charter was recently concluded.

### Staff appraisal, needs, and policy recommendations
- Macroeconomic impact and vulnerabilities:
  - Cameroon is exposed to external demand and supply shocks due to the slowdown of major trading partners (China and Europe) and falling commodity prices.
  - Domestically, containment efforts to slow Covid-19 cases (which have increased rapidly since March 6, 2020) are expected to further slow growth and widen the fiscal and balance of payment deficits.
  - The health system is weak and unprepared to face a major outbreak.
- Urgent financing needs:
  - The Covid-19-related financing needs in 2020 are estimated at CFAF 497 billion (2.2 percent of GDP).
  - After taking into account already secured financing and some drawdown of government deposits at the BEAC, the residual needs should reach CFAF 410 billion (1.8 percent of GDP).
- Staff supports the authorities’ priorities to mitigate the humanitarian and economic impact of the pandemic and welcomes the government’s resolve to implement its preparedness and response plan with partner support.
- Recommended measures to scale up and implement:
  - Scale up efforts to prevent a collapse in revenue collection through the tax and customs measures outlined above.
  - Implement measures to mitigate the negative financial impact on the private sector, which could include strengthening social safety nets, subsidizing basic medications, and providing support to affected companies.
  - Avoid new non-concessional borrowing to preserve debt sustainability and secure concessional support from partners.

*International Monetary Fund staff report excerpt.*

### 0.6 percent of GDP), extension of the arrangement and rephasing of access. The funds will be

### CAMEROON — Selected Economic and Financial Indicators, 2018–25 (tables excerpt)

### Macroeconomic outlook and prices
- Real GDP growth (GDP at constant prices):
  - 2018: 4.1
  - 2019: 3.9
  - 2020: 3.7
  - 2021 (5th Rev.): 3.8
  - 2022 (Proj.): -1.2
  - 2023 (Proj.): 4.5
  - 2024–25 (Proj.): 4.4, 4.5, 5.0, 5.2 (sequence in table)
- Oil GDP at constant prices (annual changes shown):
  - 2018: -2.7
  - 2019: 6.0
  - 2020: 4.3
  - 2021–25 (selected projections): 0.5, -5.4, 1.0, -4.2, -6.3, -6.6, -5.7 (as per table sequence)
- Non-Oil GDP at constant prices:
  - 2018: 4.4
  - 2019: 3.8
  - 2020: 3.7
  - 2021–25 (selected projections): 4.0, -1.0, 4.7, 4.8, 5.0, 5.5, 5.6
- GDP deflator (annual change):
  - 2018: 1.6
  - 2019: 1.7
  - 2020: 1.8
  - 2021–25 (selected): 1.9, 0.9, 2.3, 1.8, 1.6, 1.6, 1.7
- Nominal GDP (at market prices, CFAF billions):
  - 2018: 21,493
  - 2019: 22,714
  - 2020: 22,690
  - 2021–25 (selected): 24,022; 22,615; 24,181; 25,706; 27,300; 29,142; 31,196 (table sequence)
- Consumer prices (average):
  - 2018: 1.1
  - 2019: 2.4
  - 2020: 2.5
  - 2021–25 (selected): 2.4, 2.8, 2.3, 2.1, 2.0, 2.0, 2.0
- Terms of trade (annual change):
  - 2018: 1.7
  - 2019: 1.7
  - 2020: 1.5
  - 2021–25 (selected): -2.7, -16.2, 3.0, -2.2, -1.6, -0.5, -2.8

### Fiscal operations and public finance
- Total revenue (including grants) — percent of GDP:
  - 2018: 16.1
  - 2019: 16.4
  - 2020: 16.3
  - 2021–25 (selected projections): 15.2, 13.9, 14.9, 14.9, 14.8, 14.9, 15.0
- Total expenditure — percent of GDP:
  - 2018: 18.5
  - 2019: 18.6
  - 2020: 18.7
  - 2021–25 (selected projections): 17.3, 18.4, 17.6, 17.1, 16.9, 16.8, 16.6
- Overall fiscal balance (payment order basis), excluding grants — percent of GDP:
  - 2018: -2.9
  - 2019: -2.7
  - 2020: -2.8
  - 2021–25 (selected): -2.6, -4.9, -3.1, -2.6, -2.5, -2.2, -1.9
- Overall fiscal balance (cash basis), excluding grants — percent of GDP:
  - 2018: -3.7
  - 2019: -3.6
  - 2020: -3.4
  - 2021–25 (selected): -3.0, -5.4, -3.8, -3.0, -2.7, -2.3, -1.9
- Non-oil primary balance (payment basis, percent of non-oil GDP):
  - 2018: -4.1
  - 2019: -3.9
  - 2020: -3.9
  - 2021–25 (selected): -3.2, -4.8, -3.2, -2.5, -2.3, -2.0, -1.5
- Central government totals (CFAF billions, 2021–25 selected):
  - Total revenue and grants: 3,451 (2021), 3,716 (2022), 3,704 (2023), 3,651 (2024), 3,152 (2025 — 5th Rev.)
  - Total revenue: 3,365 (2021), 3,616 (2022), 3,604 (2023), 3,548 (2024), 3,051 (2025 — 5th Rev.)
  - Total expenditure: 3,986 (2021), 4,235 (2022), 4,235 (2023), 4,163 (2024), 4,162 (2025 — 5th Rev.)
  - Overall balance (payment order basis), excluding grants: -621 (2021), -619 (2022), -631 (2023), -615 (2024), -1,111 (2025 — 5th Rev.)
  - Overall balance (cash basis), excluding grants: -795 (2021), -823 (2022), -768 (2023), -732 (2024), -1,228 (2025 — 5th Rev.)
- Memorandum fiscal items (percent of GDP):
  - Floor of social spending: 3.1 (2018), 3.1 (2019), 3.1 (2020)
  - Primary balance (payment order basis, incl. grants): -1.6 (2018), -1.4 (2019), -1.5 (2020), and projected -1.2, -3.5, -1.7, -1.2, -1.2, -1.0, -0.6 (sequence)
- Public debt (stock of public debt, percent of GDP):
  - 2018: 39.5
  - 2019: 40.8
  - 2020: 40.9
  - 2021–25 (selected): 40.8, 45.5, 45.2, 44.7, 44.1, 43.2, 41.7

### External sector — trade, current account, and financing
- Current account balance (CFAF billions):
  - 2018: -778
  - 2019: -825
  - 2020: -834
  - 2021–25 (selected): -866; -1,280; -1,107; -952; -937; -912; -961 (table sequence)
- Current account balance (percent of GDP):
  - Excluding official grants: -4.0 (2018), -4.1 (2019), -4.2 (2020), and projected -4.1, -6.2, -5.1, -4.2, -3.8, -3.5, -3.4
  - Including official grants: -3.6 (2018), -3.6 (2019), -3.7 (2020), and projected -3.6, -5.7, -4.6, -3.7, -3.4, -3.1, -3.1
- Trade balance (CFAF billions and percent of GDP):
  - Trade balance (CFAF billions): -295 (2018), -316 (2019), -327 (2020), -405 (2021), -765 (2022), -706 (2023), -709 (2024), -725 (2025)
  - Trade balance (percent of GDP): -1.4 (2018), -1.4 (2019), -1.4 (2020), -1.7 (2021), -3.4 (2022), -2.9 (2023), -2.8 (2024), -2.7 (2025)
- Exports of goods (CFAF billions):
  - 2018: 2,885
  - 2019: 3,058
  - 2020: 3,038
  - 2021–25 (selected): 3,110; 2,229; 2,482; 2,635; 2,787; 2,949; 3,106 (table sequence)
- Oil and oil products exports (CFAF billions and percent of GDP sequence in tables):
  - 2018 oil exports: 1,040 (CFAF billions)
  - Oil exports percent of GDP: 4.8 (2018), 5.3 (2019), 5.2 (2020), and projected 4.9, 2.9, 3.1, 3.1, 3.0, 2.8, 2.6
- Imports of goods (CFAF billions):
  - 2018: -3,180
  - 2019: -3,374
  - 2020: -3,365
  - 2021–25 (selected): -3,515; -2,994; -3,188; -3,344; -3,511; -3,690; -3,931
- Capital and financial account (CFAF billions, selected):
  - Capital and financial account balance: 869 (2018), 671 (2019), 780 (2020), 866 (2021), 616 (2022), 898 (2023), 951 (2024), 929 (2025)
  - Financial account (CFAF billions): 778 (2018), 643 (2019), 752 (2020), 837 (2021), 588 (2022), 868 (2023), 919 (2024), 895 (2025)
- Financing gap and prospective financing (CFAF billions and instruments):
  - Financing gap listed in tables: 0 (2018), 3 (2019), 16 (2020), 25 (2021), 11 (2022), 62 (2023), 62 (2024), 52 (2025) — (table shows sequence labeled "Financing gap 0 3 16 25 11 62 62 52 ...")
  - Of which: IMF-ECF: 45, 45, 90, 90, 0, 0, 0, 0 (sequence under tables)
  - Of which: budget support (excl. IMF): 271, 206, 72, 125, 0, 0, 0, 0 (sequence)
  - Other prospective financing entries include AFDB: 660, 0, 53, 0, 0, 0; WB: 117, 117, 56, 56, 0, 0; France: 666, 600, 0, 0; EU: 232, 316, 160, 0
  - Exceptional financing: 410, 260, 181, 145, 0
  - Prospective IMF-RCF: 136 (single entry)
  - Non-IMF other prospective financing: 274, 260, 181, 145, 0
- Oil price assumptions ($US dollars per barrel):
  - 2018: 68.3
  - 2019: 61.8
  - 2020: 61.4
  - 2021–25 (selected): 57.9, 35.6, 37.9, 40.9, 43.2, 45.0, 46.4 (sequence)

### Monetary and financial sector
- Broad money (M2) — annual percentage change:
  - 2018: 9.8
  - 2019: 13.7
  - 2020: 11.9
  - 2021–25 (selected): 14.8, 12.9, 7.1, 6.0, 7.2, -1.8, 6.9, 6.3, 6.2, 6.7, 8.0 (table sequence)
- Broad money (CFAF billions, selected):
  - 2018: 5,053
  - 2019: 5,235
  - 2020: 5,180
  - 2021–25 (selected): 5,320; 5,348; 5,607; 5,550; 6,012; 5,451; 5,829; 6,196; 6,580; 7,025; 7,584
- Net foreign assets (CFAF billions, selected):
  - 2018: 2,074
  - 2019: 2,073
  - 2020: 2,105
  - 2021–25 (selected): 2,214; 1,995; 2,110; 2,361; 2,182; 2,016; 2,067; 2,246; 2,384; 2,542; 2,733
- Credit to the private sector (CFAF billions and growth):
  - Levels: 2018: 2,839; 2019: 2,929; 2020: 2,885; 2021–25 (selected): 2,893; 2,930; 3,008; 2,970; 3,122; 2,890; 3,034; 3,185; 3,373; 3,602; 3,915
  - Annual percentage change (private sector): 4.6 (2018), 7.9 (2019), 7.1 (2020), 7.8 (2021), 4.4 (2022), 2.7 (2023), 1.4 (2024), 3.8 (2025), -2.7, 5.0, 5.0, 5.9, 6.8, 8.7 (table sequence)

### Capacity to repay the Fund and IMF obligations
- Outstanding Fund credit (SDR millions and CFAF billions, selected):
  - SDR millions outstanding (table): 336.2 (2018), 372.6 (2019), 648.6 (2020), 648.6 (2021), 648.6 (2022), 607.2 (2023), 543.7 (2024), 447.1 (2025), 317.4 (2026), 187.7 (2027), 99.4 (2028), 33.1 (2029), 0.0 (2030 onward)
  - CFAF billions outstanding (table): 259.5 (2018), 303.4 (2019), 530.5 (2020), 525.1 (2021), 522.7 (2022), 488.0 (2023), 436.1 (2024), 357.9 (2025), 254.1 (2026), 150.2 (2027), 79.5 (2028), 26.5 (2029), 0.0 (2030 onward)
- Net use of Fund credit (SDR millions):
  - 2018: 90.5
  - 2019: 36.4
  - 2020: 276.0
  - 2021 onward: 0.0; -41.4; -63.5; -96.6; -129.7; -129.7; -88.3; -66.2; -33.1; 0.0 (sequence)
- Fund obligations (existing and prospective credit, SDR millions projection highlights):
  - Principal and charges sequences shown through 2033 (table rows). Example highlighted projection entries (SDR millions): principal payments include 41.4, 63.5, 96.6, 129.7, 129.7, 88.3, 66.2, 33.1 (multi-year sequence).
- Ratios and indicators (selected):
  - Outstanding Fund credit as percent of government revenue: 7.5 (2018), 8.2 (2019), 16.8 (2020), 14.5 (2021), 13.7 (2022), 12.1 (2023), 10.1 (2024), 7.6 (2025), 5.1 (2026), 2.8 (2027), 1.4 (2028), 0.4 (2029)
  - Outstanding Fund credit as percent of exports of goods and services: 6.4 (2018), 7.1 (2019), 17.0 (2020), 14.6 (2021), 13.3 (2022), 11.7 (2023), 9.9 (2024), 7.7 (2025), 5.2 (2026), 2.9 (2027), 1.4 (2028), 0.5 (2029)
  - Outstanding Fund credit as percent of debt service: 71.8 (2018), 61.3 (2019), 112.4 (2020), 104.2 (2021), 89.6 (2022), 67.1 (2023), 58.4 (2024), 45.4 (2025), 35.4 (2026), 18.8 (2027), 9.0 (2028), 2.7 (2029)
  - Outstanding Fund credit as percent of GDP: 1.2 (2018), 1.3 (2019), 2.3 (2020), 2.2 (2021), 2.0 (2022), 1.8 (2023), 1.5 (2024), 1.1 (2025), 0.8 (2026), 0.4 (2027), 0.2 (2028), 0.1 (2029)
- Memorandum fiscal and external tables:
  - Nominal GDP (CFAF billions, sequence): 21,493; 22,690; 22,615; 24,181; 25,706; 27,300; 29,142; 31,196; 33,468; 35,973; 38,710; 41,783; 45,156; 48,519; 52,160; 56,102
  - Exports of goods and services (CFAF billions sequence): 4,072; 4,251; 3,120; 3,595; 3,932; 4,164; 4,414; 4,666; 4,915; 5,193; 5,491; 5,822; 6,173; 6,556; 6,977; 7,439
  - Government revenue (CFAF billions sequence): 3,451; 3,704; 3,152; 3,610; 3,818; 4,040; 4,333; 4,692; 4,997; 5,423; 5,836; 6,308; 6,816; 7,379; 7,967; 8,665
  - Debt service (CFAF billions sequence): 361; 495; 472; 504; 583; 727; 747; 788; 717; 799; 883; 976; 1,054; 1,089; 1,178; 1,231

*Sources: Cameroonian authorities; and IMF staff estimates and projections using updated nominal GDP.*

### Appendix I. Letter of Intent

### Appendix I. Letter of Intent

### Context and shocks
- First confirmed COVID-19 case on March 5, 2020; negative economic impact was being felt even before that due to disruptions in trade with China and Europe.
- Additional pre-existing shocks: security crisis in the two anglophone regions and the far-northern region; suspension of production at SONARA since it was hit by a fire at end-May 2019.
- Border and domestic containment measures taken on March 17, 2020: closure of land, air and sea borders (except cargo flights and vessels transporting consumer products and essential goods and materials), cancellations of sport competitions, closure of schools, bars and restaurants, prohibition of gatherings of more than 50 people nationwide.

### Health response and estimated cost
- COVID-19 preparation and response plan developed by the Ministry of Public Health with WHO support; plan includes country-level coordination, case investigation and rapid response, provision of patient care and medical supplies, infection prevention and control, case management, and public awareness activities.
- Cost of preparedness and response plan estimated at about CFAF 58.3 billion (about 0.2 percent of GDP).

### Macroeconomic outlook and projections
- Preliminary projection: real GDP growth could decline from 3.9 percent in 2019 to -1.2 percent in 2020 — down from a pre-pandemic projection of 3.8 percent at the time of the 5th review of the ECF arrangement.
- Inflation is expected to rise moderately despite disruption of food supply channels.
- The shock is expected to concentrate in 2020 and to drag into 2021 owing to lower commodity price projections and delays in investment projects.

### External sector and financing gap
- Projected widening of the current account by 2 percentage point of GDP due to declines in international oil prices, global demand for non-oil exports, tourism receipts and current transfers (including remittances).
- Projected additional external financing gap estimated at 2 percent of GDP in 2020.
- The government requests emergency financing from the IMF under the Rapid Credit Facility in the amount of SDR165.6 million, equivalent to 60 percent of our quota.
- The RCF financing at CFAF 136 billion was added to 2020 in the financing assumptions.
- The potential G20 debt service suspension could cover as much as 100 billion CFAF in 2020 (authorities are actively assessing participation).

### Fiscal impact and emergency needs
- Expected shortfall in total domestic revenue of 1.3 percentage point of GDP in 2020 compared to pre-COVID-19 projections.
- Pandemic shock has generated immediate fiscal needs close to CFAF 400 milliards for 2020 (about US$700 million).
- Government has intensified tightening of controls over spending and initiated reassessment and reprioritization of its investment program.
- Commitment to ensure support and assistance measures do not prejudice medium- and long-term tax revenue mobilization and to enshrine measures in a revised budget.
- The government will not introduce measures or policies that would compound its BoP difficulties or introduce any new exchange or trade restrictions.

### Request, program timing, and procedural items
- Request: access to IMF Rapid Credit Facility (RCF) for SDR165.6 million (60 percent of quota).
- Requests to the IMF regarding the concurrent Extended Credit Facility (ECF) arrangement:
  - Extend the ECF arrangement from June 25, 2020 to September 30, 2020.
  - Move the availability date for the sixth review (seventh disbursement) under the ECF arrangement from May 31, 2020 to July 25, 2020.
- Government authorizes the IMF to publish the Letter and the staff report for the request for disbursement under the RCF.
- Government commits to issue a semi-annual report on COVID-19 related spending and to commission an independent audit of this spending at the end of the 2020 fiscal year and publish the results.
- Commitment to publish documents relating to the results of public procurement awarded by the government and the beneficial ownership of companies receiving procurement contracts on COVID-19 related expenditures.
- COVID-19 related expenditures are being incorporated in a supplementary budget expected to be presented to Parliament in June 2020.

### Debt sustainability assessment — key findings and assumptions
- Risk of external debt distress: High.
- Overall risk of debt distress: High.
- Cameroon’s Composite Indicator score is 2.76 based on the October WEO 2019 and the World Bank’s 2018 CPIA (implies medium debt-carrying capacity).
- Public debt reached 42.9 percent of GDP at end-December 2019 (highly preliminary estimate).
- Updated macroeconomic assumptions incorporate the COVID-19 shock (lower growth and exports and wider fiscal deficit).
- Financing strategy updated to include a larger financing gap and a shift towards more concessional financing; financing terms for the unallocated financing gap are assumed to be at IDA terms.
- Project loan disbursements lowered for 2020 and shifted towards more concessional financing.
- Given that the last domestic bond issuance in mid-March was undersubscribed by 15 percent and inflation was revised up, domestic interest rates are raised by 1 percentage point for 2020.
- External short-term debt in the medium term reduced to 0.1 percent of GDP reflecting expectations about SONARA’s viability.
- A small amount of external arrears arose in April (10 billion CFAF) due to the COVID-19 shock but are in the process of being cleared.
- The PV of debt-to-exports ratio breaches its threshold in 2020 due to the severe drop in exports; breaches of the two external debt service indicators persist and are aggravated by the COVID-19 shock.
- Factors supporting continued assessment of debt as sustainable:
  - Debt indicators remain on non-explosive paths and debt stock indicators remain below thresholds under the baseline except for a one-off breach.
  - Debt-service-to-revenue ratio is on a clear downward trajectory and falls below the threshold after 2023.
  - The breach of debt-service-to-exports ratio is driven largely by inclusion of SONARA’s short-term supplier debt.
  - Lower oil prices are expected to benefit SONARA and reduce its vulnerabilities given fixed domestic market pricing of refined oil.
  - Authorities have guaranteed only one of SONARA’s loans, which has no outstanding payments and has been discontinued.
  - The first principal payment of the Eurobond is due in 2023.
- Key downside risks: a more protracted and severe COVID-19 shock; realization of contingent liabilities including SONARA’s potential reconstruction costs or delays in restoration of its viability; allowance of new non-concessional borrowing would weaken debt sustainability.
- Upside risk mitigation: possible G20 debt service suspension and successful reprofiling of SONARA’s arrears could lower debt-service ratios.
- Mechanical risk ratings under the DSA:
  - Mechanical risk rating under the external DSA: High.
  - Mechanical risk rating under the public DSA: High.

*Source: Appendix I. Letter of Intent (Yaoundé, April 28, 2020).*

### 7. o/w external3831.94462.13771.7

### 1cmrea2020002 - 7. o/w external3831.94462.13771.7

### Public and publicly guaranteed debt (staff estimate: A + 4+5+6)
- Total: 765937.7848439.5974142.9
- Domestic: 256712.6233110.8287312.7
- External: 509325.1615328.6686830.3
- of which publicly guaranteed: 600.3550.3460.2

### Stock of contracted but undisbursed debt (Excludes budget support)
- Total: 442421.8404318.8347315.3
- Domestic: 1780.91710.8650.3
- External: 424520.9387318.0340815.0
  - of which multilateral: 18489.116277.616747.4
  - of which bilateral: 17198.515457.211224.9
  - of which commercial: 6793.37013.36132.7
- Notes: 1/ Data is very preliminary and could likely be revised. 2/ 2019 data as of end-September. 3/ Excludes budget support.

### Key macroeconomic assumptions (selected)
- Real GDP growth (RCF DSA Update): 4.0-1.2 (2016-2019), 4.7 (2020), 5.7 (2021-2025), (2026-2038 shown elsewhere)
- Real GDP growth (DSA 2018 1/): 4.0 (2016-2019), 3.8 (2020), 4.6 5.6 (2021-2025) [format follows source]
- Inflation (GDP deflator) (RCF DSA Update): 1.5 0.9 (2016-2019), 1.8 (2020), 1.8 (2021-2025)
- Primary fiscal balance (percent of GDP) (RCF DSA Update): -2.9 -3.5 -1.2 -0.7 (2016-2026)
- Total revenue excluding grants (percent of GDP) (RCF DSA Update): 15.2, 13.5, 14.5, 15.5
- Exports of goods and services (percent of GDP) (RCF DSA Update): 18.9, 13.8, 15.1, 13.5
- Oil price (US dollars per barrel) (RCF DSA Update): 56.3 35.6 42.7 46.4

### Key financing and disbursement assumptions (selected)
- Total external disbursements (excl. grants): 91313517931053 (breakdown by year/line in source)
- Project loans: 767742793793
- Budget support (allocated): 16135000
- IMF - ECF: 90
- IMF - RCF: 0
- WB: 565600
- AFDB 1/: 05300
- EU (grant): 161600
- France: 0000
- Budget support (unallocated): 02740260
- Note: 1/ budget support was delayed from 2019 to 2020

### External Debt Sustainability Framework — Baseline scenario (selected indicators, percent of GDP)
- External debt (nominal) 2016–2019: 25.4; 27.7; 30.5; 32.3
- Projections: 2020 36.3; 2021 36.8; 2022 36.8; 2023 36.1; 2024 35.1; 2029 30.8; 2039 20.1
- of which: public and publicly guaranteed (PPG) 2016–2019: 22.3; 25.1; 28.6; 30.4
- PPG projections: 2020 34.3; 2021 34.8; 2022 34.8; 2023 34.2; 2024 33.2; 2029 29.2; 2039 19.1
- Change in external debt (selected): 2016 1.3; 2017 2.3; 2018 2.8; 2019 1.8; 2020 3.9
- Identified net debt-creating flows (selected): 2016 0.8; 2017 -1.3; 2018 -0.7; 2019 0.8; 2020 4.7
- Non-interest current account deficit (selected): 2016 2.1; 2017 1.9; 2018 2.5; 2019 2.8; 2020 4.6
- Exports (percent of GDP) (selected): 2016 19.2; 2017 18.7; 2018 18.9; 2019 18.7; 2020 13.8
- Imports (percent of GDP) (selected): 2016 21.7; 2017 20.6; 2018 21.8; 2019 21.7; 2020 19.0
- Net FDI (negative = inflow) (selected): 2016 -1.1; 2017 -2.3; 2018 -1.7; 2019 -1.8; 2020 -1.3
- Endogenous debt dynamics (selected): 2016 -0.2; 2017 -1.0; 2018 -1.5; 2019 -0.2; 2020 1.5
  - Contribution from nominal interest rate (selected): 2016 1.0; 2017 0.8; 2018 1.1; 2019 0.9; 2020 1.1
  - Contribution from real GDP growth (selected): 2016 -1.1; 2017 -0.8; 2018 -1.0; 2019 -1.1; 2020 0.4
- Residual (selected): 2016 0.6; 2017 3.6; 2018 3.5; 2019 1.1; 2020 -0.8

### External DSA sustainability indicators (selected)
- PV of PPG external debt-to-GDP ratio (selected projections): 21.6; 23.4; 25.9; 25.8; 25.5; 24.7; 23.9; 21.6; 14.8
- PV of PPG external debt-to-exports ratio (selected): 114.2; 124.7; 187.4; 173.5; 166.4; 161.9; 158.0; 154.5; 118.3
- PPG debt service-to-exports ratio (selected): 12.1; 14.1; 17.3; 21.4; 26.3; 20.5; 20.5; 21.5; 18.8; 14.2; 12.0
- PPG debt service-to-revenue ratio (selected): 14.0; 15.6; 18.5; 23.2; 24.5; 18.4; 18.8; 19.4; 16.8; 11.4; 9.0
- Gross external financing need (Billion of U.S. dollars) (selected): 1.8; 1.5; 2.6; 2.9; 3.4; 2.5; 2.2; 2.2; 1.9; 1.3; -0.7

### Key macro assumptions used in DSA (selected numerical series)
- Real GDP growth (in percent) (historical/projections): 4.6; 3.5; 4.1; 3.7; -1.2; 4.5; 4.4; 4.5; 5.0; 5.7; 5.8; 4.3; 4.4
- GDP deflator in US dollar terms (change in percent) (selected): 0.8; 3.6; 6.3; -3.6; 0.4; 3.4; 2.3; 1.9; 1.8; 1.8; 1.9; -0.2; 1.4
- Effective interest rate (percent) (selected): 4.5; 3.2; 4.5; 2.9; 3.4; 3.1; 3.0; 2.8; 2.6; 2.5; 2.6; 3.4; 2.7
- Growth of exports of G&S (US dollar terms, in percent) (selected): -7.1; 4.4; 12.3; -1.1; -26.9; 16.4; 9.9; 6.2; 6.2; 6.0; 6.6; 1.4; 3.6
- Growth of imports of G&S (US dollar terms, in percent) (selected): -9.1; 2.0; 16.9; -0.5; -13.1; 9.3; 5.3; 5.1; 5.1; 4.3; 3.8; 1.7; 3.0
- Grant element of new public sector borrowing (in percent) (selected): 29.5; 36.8; 36.1; 34.5; 33.6; 30.0; 28.9; 26.2
- Government revenues (excluding grants, in percent of GDP) (selected): 16.6; 16.9; 17.7; 17.3; 14.9; 16.5; 16.7; 16.9; 17.0; 17.3; 16.6; 16.7; 16.9
- Aid flows (in Billion of US dollars) (selected): 1801.7; 1981.3; 2268.7; 0.8; 0.8; 0.8; 0.8; 0.8; 0.8; 0.8; 0.9
- Grant-equivalent financing (in percent of GDP) (selected): 1.8; 2.6; 2.0; 1.7; 1.6; 1.3; 0.9; 0.5; ... 1.5
- Nominal GDP (Billion of US dollars) (selected entries): 33; 35; 39; 39; 38; 42; 44; 47; 50; 72; 153
- Nominal dollar GDP growth (selected): 5.5; 7.2; 10.6; 0.0; -0.8; 8.0; 6.8; 6.5; 7.0; 7.6; 7.8; 4.1; 5.9

### Public Sector Debt Sustainability Framework — Baseline scenario (selected indicators, percent of GDP)
- Public sector debt (2016–2019 historical): 33.3; 37.7; 39.5; 40.9
- Projections: 2020 45.5; 2021 45.2; 2022 44.7; 2023 44.1; 2024 43.1; 2029 36.1; 2039 25.3
- of which: external debt (historical/projections): 22.3; 25.1; 28.6; 30.4; 34.3; 34.8; 34.8; 34.2; 33.2; 29.2; 19.1; 15.9; 32.4
- Change in public sector debt (selected): 2016 1.3; 2017 4.4; 2018 1.8; 2019 1.4; 2020 4.6; 2021 -0.3
- Identified debt-creating flows (selected): 2016 4.8; 2017 0.8; 2018 -0.3; 2019 0.4; 2020 4.9; 2021 0.1
- Primary deficit (selected): 2016 5.3; 2017 4.1; 2018 1.5; 2019 1.3; 2020 3.6; 2021 1.7
- Revenue and grants (selected): 16.9; 17.2; 18.1; 17.7; 15.3; 16.9; 17.1; 17.3; 17.3; 17.5
- Primary (noninterest) expenditure (selected): 22.1; 21.2; 19.6; 19.0; 18.9; 18.6; 18.3; 18.4; 18.2; 17.9
- Automatic debt dynamics (selected): -0.4; -3.3; -0.4; -1.2; 1.4; -1.6; -1.6; -1.7; -1.9; -1.9
  - Contribution from interest rate/growth differential (selected): -1.1; -1.0; -1.5; -1.2; 1.4; -1.6; -1.6; -1.7; -1.9; -1.9
  - Contribution from average real interest rate (selected): 0.4; 0.2; -0.1; 0.2; 0.8; 0.4; 0.3; 0.2
  - Contribution from real GDP growth (selected): -1.4; -1.1; -1.5; -1.4; 0.5; -2.0; -1.9; -1.9; -2.1; -2.0
- Other identified debt-creating flows (selected): 0.0; 0.0; -1.4; 0.2; 0.0; 0.0
- Residual (selected): -3.6; 3.7; 2.1; 1.0; -0.3; -0.4
- PV of public debt-to-GDP ratio (selected projections): ...; ...; 33.3; 34.0; 36.9; 36.1; 35.3; 34.6; 33.8; 28.5; 21.0
- PV of public debt-to-revenue and grants ratio (selected): ...; ...; 184.0; 192.3; 240.9; 213.0; 206.5; 200.5; 195.3; 162.9; 125.4
- Debt service-to-revenue and grants ratio 3/ (selected): 13.8; 15.3; 18.1; 47.7; 54.3; 48.2; 46.7; 47.7; 47.7; 31.2; 23.8
- Gross financing need 4/ (selected): 8.6; 7.9; 5.0; 10.0; 11.9; 9.8; 9.1; 9.3; 9.1; 5.9; 4.3

### Public DSA key macro and fiscal assumptions (selected)
- Real GDP growth (in percent) (selected series): 4.6; 3.5; 4.1; 3.7; -1.2; 4.5; 4.4; 4.5; 5.0; 5.7; 5.8; 4.3; 4.4
- Average nominal interest rate on external debt (in percent) (selected): 3.5; 3.4; 3.0; 2.3; 2.6; 2.4; 2.3; 2.1; 1.9; 1.8; 2.0; 2.9; 2.0
- Average real interest rate on domestic debt (in percent) (selected): -1.1; -1.5; -1.6; 0.7; 2.7; 1.9; 2.2; 2.5; 2.5; 3.0; 3.4; -1.7; 2.4
- Real exchange rate depreciation (in percent, + indicates depreciation) (selected): 3.1; -10.6; 4.8; ...; 1.8
- Inflation rate (GDP deflator, in percent) (selected): 1.1; 1.5; 1.6; 1.8; 0.9; 2.3; 1.8; 1.6; 1.6; 1.8; 1.9; 1.7; 1.7
- Growth of real primary spending (deflated by GDP deflator, in percent) (selected): -0.1; -0.6; -4.0; 0.9; -2.2; 3.1; 2.5; 5.1; 4.1; 5.2; 5.3; 6.8; 3.6
- Primary deficit that stabilizes the debt-to-GDP ratio 5/ (selected): 4.0; -0.4; -0.3; -0.1; -1.0; 2.0; 1.7; 1.6; 1.9; 1.8; 1.2; 1.1; 1.4

### Stress tests, sensitivity analysis and tailored scenarios (high-level)
- Stress testing approach: multiple stress tests reported (commodity price shock, exports shock, depreciation shock, combined contingent liabilities, market financing shock, natural disaster n.a. where not applicable). The most extreme shock is the test that yields the highest ratio in or before 2029.
- Default assumption for additional financing needs under stress tests: all additional financing needs are assumed to be covered by PPG external MLT debt in the external DSA; default terms of marginal debt are based on baseline 10-year projections.
- Indicators tracked under alternative scenarios and bound/tailored tests include:
  - PV of debt-to-GDP ratio
  - PV of debt-to-exports ratio
  - Debt service-to-exports ratio
  - Debt service-to-revenue ratio
  - PV of debt-to-revenue ratio
- Selected sensitivity results (Table 3, Table 4 excerpts):
  - Baseline PV of debt-to-GDP (2019–2029 entries) (examples): 23 26 26 25 25 24 23 23 22 22
  - Bound Tests B1 (Real GDP growth) PV of debt-to-GDP (examples): 23 26 27 26 26 25 24 23 23 22 22
  - Tailored Test C1 (Combined contingent liabilities) shows higher debt ratios (examples in tables: 23 30 32 32 32 32 31 31 30 30)
  - Public debt benchmark and breaches: bold values in tables indicate breaches of thresholds (source tables provide specifics)
- Figures illustrate projected paths and most extreme shocks for:
  - PV of PPG external debt-to-GDP ratio
  - PV of debt-to-exports ratio
  - Debt service-to-revenue ratio
  - PV of public debt-to-GDP ratio under alternative scenarios
  - Drivers of debt dynamics: contributions from primary deficit, real interest rate, real GDP growth, exchange rate/price changes, other flows, and residuals
- Realism tools and investment contribution charts shown (Figure 4) comparing government and private investment in current vs. previous DSAs and contributions to real GDP growth under different fiscal multipliers.

*Sources: Cameroonian authorities; IMF staff calculations; IMF staff estimates and projections.*

### 1990. The size of 3-year adjustment from program inception is found on the horizontal axis; the

### 1cmrea2020002 - 1990. The size of 3-year adjustment from program inception is found on the horizontal axis; the

### Fiscal adjustment and projected growth paths
- 3-Year PB adjustment data presented as "3-Year Adjustment in Primary Balance (Percentage points of GDP)" across a distribution.
- Staff note: "3-year PB adjustment greater than 2.5 percentage points of GDP in approx. top quartile."
- Projected and historical series shown with multipliers: "Baseline", "Multiplier = 0.2", "Multiplier = 0.4", "Multiplier = 0.6", "Multiplier = 0.8".
- Years indicated in charts: 2013 2014 2015 2016 2017 2018 2019 2020 and 2015–2024 series.

### Market-financing risk indicators (Cameroon)
- Figure caption: "Figure 5. Cameroon: Market-Financing Risk Indicators"
- Notes:
  - 1/ Maximum gross financing needs (GFN) over 3-year baseline projection horizon.
  - 2/ EMBI spreads correspond to the latest available data.
  - Sources: Country authorities; and staff estimates and projections.
- Benchmarks and thresholds referenced as "Baseline", "Market financing", "Threshold".
- Chart elements and labels include:
  - "Potential heightened liquidity needs"
  - "Moderate"
  - "Breach of benchmark"
  - "Yes" / "No"
  - "GFN Benchmarks14"
  - "EMBI 570 Values121174"
- Time series (selected labels shown in figures):
  - 2019 2021 2023 2025 2027 2029 (used for Debt service-to-revenue ratio, PV of debt-to-exports ratio, PV of debt-to-GDP ratio, Debt service-to-exports ratio)

### Statement by the Staff Representative on Cameroon (May 1, 2020)
- Update: Not all external arrears had yet been cleared, including CFAF 1,279 million to official creditors.
- Treasury has sent payments orders for these arrears to the BEAC; completion of these payments is expected to be confirmed in the coming days.
- Staff assessment: "the request for disbursement under the RCF can be approved consistent with the Fund’s arrears policies."

### Statement by Mr. Raghani and Mr. N'Sonde on behalf of Cameroon (May 4, 2020)
- Authorities' request:
  - Emergency assistance under the Rapid Credit Facility (RCF) in the amount of SDR165.6 million equivalent to 60 percent of quota.
  - Extension of the ECF arrangement (which was about to expire in June 2020) with a rephasing of access.
- Context: Cameroon implementing an ECF-supported program hit by the Covid-19 pandemic and a terms-of-trade shock; growth decelerating, fiscal and external positions deteriorating, short-term outlook worsened, downside risks from uncertainty.

### Economic performance prior to the Covid-19 pandemic
- Growth: "reached 3.9 percent in 2019 (against an initial projection of 3.7 percent)".
- Policy focus prior to shocks: strengthen fiscal and external buffers, stabilize public debt by scaling up non-oil revenue, address SONARA viability, repatriate export proceeds.
- Non-oil sector: described as strong and providing resilience given volatile oil prices.

### Impact of the pandemic and commodity price shocks
- First Covid-19 case: "March 5th".
- Containment measures taken: shutting borders and international flights (except for import of consumer goods and essential products and equipment), closing schools, bars and restaurants, cancelling public events, proscribing large gatherings, restricting movement.
- Health response: Covid-19 preparedness and response plan in coordination with WHO to investigate cases, provide care and medical supplies, ensure infection prevention and control, and raise public awareness.
- Economic effects:
  - Projected recession in 2020: "real GDP expected to contract by 1.2 percent" (against growth of 3.8 percent projected at the time of the last ECF review).
  - Fiscal shortfall: "shortfall in domestic revenue equivalent to 1.3 percentage point of GDP in 2020".
  - Increase in total expenditures to accommodate Covid-19-related outlays.
  - Resulting additional fiscal needs: "2.2 percent of GDP".
  - Additional BOP financing gap: "2.8 percent of GDP".

### Policy response and financing strategy
- Fiscal measures:
  - Enhance existing social safety nets and support vulnerable populations and affected businesses, including through a payment moratorium.
  - Strengthen tax and customs administrations to alleviate 2020 revenue losses, including expansion of online services and mobile payments for taxpayers, extended payment arrangements to affected enterprises, on-site monitoring, simplification of clearance procedures for necessity goods, and scaling up collection in 2021.
  - Commitment to comply with domestic budgetary procedures and controls on transparency, good governance and public finance management for RCF funds usage.
- Monetary and macro-financial measures (regional BEAC and COBAC actions):
  - BEAC measures: suspension of liquidity absorption operations; monetary policy easing with a reduction of the policy rate while narrowing the interest rate corridor; increased liquidity provision; expansion of private financial instruments accepted as collateral for central bank refinancing.
  - BEAC Monetary Policy Committee recommendations: reduce haircuts to instruments used for refinancing operations; allow a one-year moratorium on repayments by member states to BEAC; encourage continuity of financial services (ATMs, remote banking, reduced fees).
  - COBAC: close monitoring of portfolio quality and profitability; recommendations on prudent and transparent loan restructuring.
- Financing mobilization:
  - Additional financing identified from the World Bank, the African Development Bank, France and the regional development bank BDEAC.
  - Authorities actively seeking further funding, including consideration of the G-20 moratorium on bilateral debt service in favor of some low-income countries.
  - Authorities' debt strategy: "pursue a financing strategy based on grants and concessional resources."

### Conclusion and authorities' commitments
- Priority: fight the health crisis, its economic effects, and the impact of the terms-of-trade shock.
- Authorities remain committed to the objectives of the ECF arrangement and intend to resume implementation "forcefully as the pandemic abate while sustaining the economic recovery."
- Request to the Executive Board: approve emergency assistance under the RCF, extend the ongoing ECF, and rephase access under the arrangement.

*Source: IMF staff report material (Cameroon) included in the provided content.*

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_Source: https://www.imf.org/-/media/files/publications/cr/2020/english/1cmrea2020002.pdf_