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### Executive summary and program financing
- Disbursements to date: SDR 69.0 million (US$91.3 million).
- ECF-EFF arrangements:
  - Originally approved July 2021: SDR 483 million (US$ 689.5 million, or 175 percent of quota).
  - Extension of arrangements of 12 months approved December 2023 and access augmented by SDR 110.4 million (US$ 145.4 million, or 40 percent of quota).
- RSF arrangement:
  - 18-month RSF approved January 2024: SDR 138 million (US$ 181.7 million, or 50 percent of quota).
- Pending disbursements upon review completion:
  - Seventh reviews under ECF-EFF would allow SDR 55.2 million (about US$73.5 million).
  - Second RSF review would make available SDR 34.5 million (about US$46 million).
- Reviews postponed due to delay in obtaining CEMAC regional policy assurances and additional time needed to assess program performance.

### Key messages and staff appraisal
- Acting Chair (Mr. Nigel Clarke) key messages:
  - “Cameroon’s economic recovery has continued, but growth remains subdued. The medium-term outlook remains broadly positive while the balance of risks is tilted to the downside.”
  - Program performance described as “broadly satisfactory.”
  - Fiscal policy: commendable effort maintaining fiscal path; priority on strengthening domestic non-oil revenue mobilization and public financial management.
  - Governance/AML/CFT: step up governance reforms, strengthen AML/CFT, exit FATF ‘grey’ list, lift EITI suspension.
  - Debt: “Cameroon remains at high risk of debt distress, but its debt is sustainable.”
  - Climate: “Cameroon has made good progress under the RSF. It is essential to maintain the reform momentum and strengthen the institutional framework for climate policies.”
- Staff supports:
  - Completion of the seventh ECF-EFF reviews and second RSF review conditional on regional assurances.
  - Modification of end-March 2025 ITs and waiver of applicability for two end-December 2024 QPCs due to unavailable data.

### Program performance and conditionality
- Quantitative and continuous performance:
  - All continuous QPCs were met.
  - All QPCs and four out of six ITs met at end-June 2024.
  - Seven out of nine ITs met at end-September 2024.
  - Two QPCs (with available data) met at end-December 2024; waiver requested for two remaining end-December QPCs (floor on non-oil primary balance and ceiling on net domestic financing) because data unavailable; staff sees no clear evidence they will not be met.
- Structural benchmarks (SBs) status (nine due for review):
  - Met on schedule: 3 (SB4, SB5, SB6).
  - Implemented with delay: 3 (SB1, SB3, SB8).
  - Proposed to be reset: 2 (SB2, SB10).
  - Not completed: SB9 (SONARA restructuring study); new SB11 proposed (interim report due May 15, 2025).
- Prior actions for completion of the ECF-EFF review:
  1. Submission to Parliament of the 2025 Budget Law in line with program framework — met.
  2. Signature of contract with consultant for SONARA restructuring study — to be completed (prior action requirement noted).

### Recent macroeconomic developments and projections
- Growth:
  - Real GDP growth: 3.7 percent (2022); 3.2 percent (2023); 3.6 percent (H1 2024 y/y).
  - Staff projections: 3.9 percent (2024); 4.0 percent (2025); about 4.5 percent (medium term).
- Inflation:
  - CPI (12-month average): 7.4 percent (2023); 4.5 percent (December 2024).
  - Inflation expected to decelerate further in 2025 and fall below CEMAC convergence level of 3 percent over the medium term.
- External sector:
  - Current account deficit: 4.1 percent of GDP (2023) → expected 3.4 percent of GDP (2024).
  - Current account expected to slightly worsen over medium term to about 3.5 percent of GDP due to decline in hydro-carbon exports.
  - Cocoa price more than doubled year-on-year in 2024, supporting non-oil exports.
- Fiscal outcomes:
  - Non-oil primary balance (NOPB): deficit of about CFAF 70 billion (end-September 2024).
  - Non-oil revenue increased by 8 percent year-on-year (September 2024).
  - Lower-than-expected expenditures from investment delays produced a smaller NOPB deficit relative to program.
- Public debt:
  - Public debt expected to fall to 42 percent of GDP at end-2024 from 43.2 percent of GDP at end-2023.
  - External debt-to-GDP expected to edge up to 28.7 percent (2024) from 28.2 percent (2023) due to debt management operation.
- Banking sector:
  - NPLs: about 13 percent (July 2024).
  - Private sector credit growth: 11.7 percent (y/y, November 2024).
  - Deposits growth: 4.1 percent (y/y, November 2024).
  - Recent capital injections into two undercapitalized banks boosted capitalization.

### Selected quantitative indicators (as presented)
- Disbursements to date: SDR 69.0 million (US$91.3 million).
- ECF-EFF original amount: SDR 483 million (US$ 689.5 million, or 175 percent of quota).
- ECF-EFF augmentation: SDR 110.4 million (US$ 145.4 million, or 40 percent of quota).
- RSF approved amount: SDR 138 million (US$ 181.7 million, or 50 percent of quota).
- Disbursements upon review completion: SDR 55.2 million (about US$73.5 million) under ECF-EFF; SDR 34.5 million (about US$46 million) under RSF.
- Real GDP growth: 3.7 percent (2022); 3.2 percent (2023); 3.6 percent (H1 2024 y/y); staff projection 3.9 percent (2024), 4.0 percent (2025), about 4.5 percent (medium term).
- Inflation (12-month CPI average): 7.4 percent (2023); 4.5 percent (December 2024).
- Non-oil revenue increase: 8 percent y/y (September 2024).
- Non-oil primary balance: deficit of about CFAF 70 billion (end-September 2024).
- Public debt: 43.2 percent of GDP (end-2023) → expected 42 percent of GDP (end-2024).
- External debt: 28.2 percent of GDP (2023) → expected 28.7 percent of GDP (2024).
- Banking sector NPLs: about 13 percent (July 2024).
- Private sector credit growth: 11.7 percent (y/y, November 2024).
- Deposits growth: 4.1 percent (y/y, November 2024).

### Outlook, vulnerabilities, and risks (Risk Assessment Matrix highlights)
- Medium-term outlook: broadly positive but balance of risks tilted to the downside.
- Key downside risks:
  - Structural and governance weaknesses.
  - Ongoing internal conflicts and security concerns.
  - Social tensions around presidential elections in October 2025.
  - Climate hazards (e.g., September floods in North and Far North regions).
  - External headwinds and geoeconomic fragmentation.
- RAM external risks (selected likelihood/response):
  - Intensification of regional conflicts — Likelihood: High; policy response: create fiscal space, prioritize targeted spending.
  - Deepening geoeconomic fragmentation — Likelihood: High; policy response: diversify trade partners and accelerate labor/product market reforms.
  - Sovereign debt distress — Likelihood: Medium; policy response: enhance banking supervision, advance SOE restructuring.
  - Climate change — Likelihood: High; policy response: strengthen early warning systems and institutional climate frameworks.
- RAM domestic risks:
  - Social tensions over presidential election — Likelihood: Medium; impacts include spending overruns and delayed reforms.
  - Social discontent — Likelihood: High; recommended policy response: reprioritize spending to protect vulnerable populations and mobilize concessional financing.

### Fiscal policy, revenue mobilization, and public investment
- Fiscal consolidation targets:
  - Non-oil primary deficit: 2.5 percent of GDP (2023) → 2.0 percent of GDP (2024 projected) → 1.3 percent of GDP (2025 projected).
- Non-oil revenue:
  - Projected non-oil revenues: 13.2 percent of GDP (2024) versus 14.3 percent of GDP projected in 2021.
  - Drivers: tax administration improvements, arrears recovery, stamp duties, and one-off factors.
  - Need for bolder political action on tax incentives and VAT exemption rationalization.
- Fuel subsidy and oil taxation:
  - Estimated fuel subsidy about 0.3 percent of GDP in 2025 at latest projected international oil prices.
  - Staff estimate: a 1-standard deviation increase in oil prices would raise subsidy to about 1.4 percent of GDP in 2025.
  - Tax reference price use resulted in tax expenditures of about CFAF 356 billion, or 1.2 percent of GDP in 2022–23.
  - Staff advised using market oil price for taxation and introducing automatic fuel price adjustment mechanism.
- Public investment implementation costs of delays (Annex V summary):
  - Sample of 20 large externally financed projects: about three quarters delayed by at least two years.
  - Staff estimates: additional fees and opportunity costs around CFAF 123 billion (about 0.4 percent of GDP and 16.3 percent of external debt service in 2022).
  - A single water-sector project estimated annual budget revenue loss of about CFAF 6.2 billion.

### Debt sustainability, debt management, and contingent liabilities
- Debt assessment:
  - Cameroon remains at high risk of debt distress, but public debt is sustainable and on a downward trajectory.
  - Two out of four external debt indicators (debt service-to-revenue and debt service-to-exports) breach thresholds under baseline.
  - PV of public debt-to-GDP ratio fell below its threshold for the first time since the start of ECF-EFF arrangements.
  - Most extreme shock scenarios: export shock and commodity price shock.
- Recent debt operations:
  - Loan of about CFAF 131 billion from Afreximbank (January 2024).
  - Eurobond private placement of US$550 million (CFAF 332 billion) in July 2024; proceeds used to clear outstanding domestic obligations.
- Public debt (selected table highlights):
  - Total public debt (2023): $US 20,558 million; Percent of GDP 41.4; Debt service $2,542 (2023), $2,964 (2024), $2,093 (2025).
  - External debt (2023): $13,545; 65.9 percent of total; 27.3 percent of GDP.
  - Domestic debt (2023): $7,013; 34.1 percent of total; 14.1 percent of GDP.
  - Nominal GDP (CFAF, billions): 2023 29,891; 2024 32,099; 2025 34,452.
- Policy stance on borrowing:
  - Contain new external borrowing; pursue concessional loans for infrastructure and social projects.
  - Replace planned regional long-term government bond issuance of CFAF 380 billion with external commercial financing in 2025 due to tight regional markets.

### Financial sector resilience, recapitalization, and inclusion
- Bank recapitalization and vulnerabilities:
  - One bank fully recapitalized consistent with 8 percent capital adequacy ratio and Basel requirements; recapitalization of second bank delayed (SB10 proposed reset to April 2025).
  - Banks’ exposure to CEMAC public sector including SOEs: 37 percent (end-2023).
  - Recommendation: structure funding for the second bank on marketable terms to ensure medium-term viability.
- NPLs and MSME access:
  - NPLs about 13 percent (July 2024).
  - Actions: create credit registry, balance sheet registry, rating system, land title registry, state guarantee fund for SMEs; recommend establishing commercial courts and training judges.
  - SRC measures: sunset clause for recovery; recruitment of magistrates; cooperation on recovery of illicit funds.
- Financial inclusion and development:
  - National financial inclusion strategy operational; priorities include financial education, MSME and agricultural finance, digital finance, and Islamic finance.
  - Government operationalizing a guarantee fund for SMEs; World Bank study underway.
- CDEC risks:
  - Adopt formal supervision for CDEC to mitigate financial stability risks; collaboration with BEAC and COBAC to assess supervision needs.

### Governance, AML/CFT, and EITI corrective actions
- Governance and anti-corruption:
  - Implementing Governance Diagnostic Report recommendations selectively; limited progress on anti-corruption so far.
  - Publication of hyperlinks to audited financial statements of 25 largest public companies (SB4, November 2024).
  - Remaining work: align anti-corruption framework with UN Convention, draft Code of Financial Jurisdictions, amend Penal Code, implement asset declaration law.
- EITI corrective actions:
  - EITI committee appointments finalized; implementing texts of new Mining Code published (SB1, January 2025).
  - Beneficial ownership registry established at General Directorate of Taxes.
  - Need to revamp multi-stakeholder group to ensure civil society participation ahead of validation in April 2027.
- AML/CFT strengthening:
  - National AML/CFT Policy Coordination Committee established; increased FIU resources; companies required to submit beneficial ownership in annual returns.
  - Ongoing work: align AML/CFT policies with national risk assessment and improve accessibility of beneficial ownership information.

### RSF-supported climate reforms and disaster risk financing
- RSF achievements:
  - RM4: Integrated climate change considerations into ex-ante project evaluation methodology — met.
  - RM6: Revised Civil Protection Law and updated ONR order — met.
- Ongoing/planned RSF measures:
  - RM2 (National Climate Plan) workplan prepared; first draft to be shared February 2025; RM2 final measures due April 2025.
  - RM7 (Disaster Risk Financing Strategy) drafting after IMF TA; strategy to be shared February 2025; final due April 2025.
  - RM5 (project maturation decree revision) target April 2025.
  - RM8 (SIGIF2 deployment) second-generation modules operational target [March] 2025; RM8 target April 2025.
  - 74 priority climate projects identified for inclusion in 2025–27 investment program.
- Policy emphasis: maintain RSF reform momentum and strengthen institutional frameworks to build resilience and catalyze donor and private investment.

### Program calendar, financing assurances, and capacity to repay
- Program timeline:
  - One final review ahead of program expiration in July 2025.
  - Eighth reviews conditional on critical policy assurances on NFAs at union level by end-March 2025.
- Financing and repayment capacity:
  - As of end-October 2024, total outstanding credit from the Fund amounted to 409.5 percent of quota.
  - Total Fund credit outstanding (based on existing and prospective drawings) peaks at 3.0 percent of GDP in 2024.
  - Annual obligations to the Fund peak at about 3.0 percent of revenues in 2027.
  - Cameroon’s capacity to repay the IMF is adequate but subject to significant risks; accelerating reforms and donor engagement are critical.
- Financing assurances:
  - Program remains fully financed with firm commitments for the remainder of program ending July 2025.
  - African Development Bank and French Development Agency provided budget support in 2024.
  - World Bank budget support expected delayed; expected by end-March 2025; shortfall to be covered by other financing including domestic financing.

### Key policy recommendations and priorities (staff)
- Fiscal resilience:
  - Maintain prudent fiscal stance through elections.
  - Strengthen domestic non-oil revenue mobilization and public financial management.
  - Limit spending through exceptional procedures to maintain budget discipline and integrity.
- Debt and SOE reform:
  - Advance SONARA restructuring and reforms in the electricity sector and other SOEs to limit contingent liabilities.
  - Continue prudent debt management to support gradual decline in public debt-to-GDP.
- Financial sector:
  - Continue bank recapitalization and privatization to improve competitiveness.
  - Deepen domestic financial markets and coordinate with regional institutions (BEAC, COBAC).
  - Address high NPL share (~13 percent).
- Governance and integrity:
  - Step up governance reforms; strengthen AML/CFT to support exit from FATF ‘grey’ list and lift EITI suspension.
- Climate:
  - Maintain RSF reform momentum and strengthen institutional framework for climate policies.

*Source: IMF staff report — Cameroon: Seventh Reviews under the Extended Arrangement under the Extended Fund Facility and the Arrangement under the Extended Credit Facility, Request for a Waiver of Applicability of Performance Criteria, and Second Review under the Resilience and Sustainability Facility Arrangement (February 25, 2025).*

### 45.9 million), with disbursements to date totaling SDR 69.0 million (US$91.3 million).

### CAMEROON — SEVENTH REVIEWS UNDER THE ECF-EFF, WAIVER REQUEST, AND SECOND RSF REVIEW (PDF chapter)

### Executive summary and program financing
- Disbursements to date totaling SDR 69.0 million (US$91.3 million).
- Cameroon’s three-year ECF-EFF arrangements originally approved in July 2021 for a total amount of SDR 483 million (US$ 689.5 million, or 175 percent of quota).
- An extension of these arrangements of 12 months was approved in December 2023 and access was augmented by SDR 110.4 million (US$ 145.4 million, or 40 percent of quota).
- The 18-month RSF was approved in January 2024 in the amount of SDR 138 million (US$ 181.7 million, or 50 percent of quota).
- Completion of the seventh reviews under the ECF-EFF arrangements will allow a disbursement of SDR 55.2 million (about US$73.5 million).
- Completion of the second review under the RSF arrangement will make available a disbursement of SDR 34.5 million (about US$46 million).
- The seventh reviews under the ECF-EFF arrangements and the second review under the RSF arrangement are postponed due to a delay in obtaining CEMAC regional policy assurances and additional time needed to assess program performance.

### Key messages from the Acting Chair (Mr. Nigel Clarke)
- “Cameroon’s economic recovery has continued, but growth remains subdued. The medium-term outlook remains broadly positive while the balance of risks is tilted to the downside.”
- Program performance: “broadly satisfactory,” with arrangements supporting macroeconomic stability, priority reforms, and the climate agenda.
- Fiscal policy: authorities have “made a commendable effort in maintaining a fiscal path in line with program objectives.” Strengthening domestic non-oil revenue mobilization and public financial management is key.
- Spending control: “Continued efforts to limit spending through exceptional procedures are essential to maintaining budget discipline and integrity.”
- Public enterprises and energy sector: advancing reforms critical for fiscal sustainability and macroeconomic resilience; restructuring of the oil refinery is important.
- Financial sector: efforts to strengthen soundness and advance bank recapitalization are welcome; recommend deepening domestic financial markets and working with regional institutions.
- Governance and AML/CFT: stepping up governance reforms and strengthening AML/CFT needed to promote inclusive, private sector-led growth, exit FATF ‘grey’ list, and lift EITI suspension.
- Debt: “Cameroon remains at high risk of debt distress, but its debt is sustainable.”
- Climate: “Cameroon has made good progress under the RSF. It is essential to maintain the reform momentum and strengthen the institutional framework for climate policies.”

### Program performance and conditionality
- Program performance summary:
  - All QPCs and four out of six ITs were met at end-June.
  - The IT on the share of spending through exceptional procedures was met for the first time during the program.
  - Seven out of nine ITs were met at end-September 2024.
  - Two QPCs (with available data) were met at end-December.
  - All three continuous QPCs were met.
- Structural benchmarks (SBs):
  - Three out of nine SBs due for this review were met on schedule.
  - Three were implemented with delay.
  - Two SBs are proposed to be reset to a later date because implementation requires more time.
  - One new SB is proposed.
- Prior actions for completion of the ECF-EFF review:
  1. Submission to Parliament of the 2025 Budget Law in line with the program macroeconomic and budgetary framework — met.
  2. Signature of a contract with the consultant to carry out the in-depth technical and economic study for restructuring SONARA — to be completed.
- Waiver request: authorities request a waiver of applicability for two end-December QPCs because information is not yet available; staff sees no clear evidence these QPCs will not be met.
- RSF: the two RMs due for the second review under the RSF arrangement were met.

### Recent developments — macroeconomic performance (selected)
- Growth:
  - Real GDP growth slowed from 3.7 percent in 2022 to 3.2 percent in 2023.
  - Preliminary data: growth reached 3.6 percent year-on-year in the first half of 2024.
  - Staff projections: GDP growth expected to pick up to 3.9 percent in 2024 and 4 percent in 2025; strengthen to about 4.5 percent over the medium term.
- Inflation:
  - Twelve-month average CPI inflation decelerated to 4.5 percent in December 2024 from 7.4 percent the previous year.
  - Inflation is expected to decelerate further in 2025 and fall below the CEMAC convergence level of 3 percent over the medium term.
- External sector:
  - Current account deficit improved from 4.1 percent of GDP in 2023 to an expected 3.4 percent of GDP in 2024, driven by higher non-oil exports (notably cocoa, whose price more than doubled year-on-year).
  - The current account is expected to slightly worsen over the medium term to about 3.5 percent of GDP due to continued decline in hydro-carbon exports.
- Fiscal outcomes:
  - Non-oil primary balance (NOPB) was in deficit by about CFAF 70 billion at end-September 2024.
  - Non-oil revenue increased by 8 percent year-on-year in September 2024.
  - Lower-than-expected expenditures reflect delays in investment projects, producing a smaller NOPB deficit compared to the programmed deficit.
- Public debt:
  - Public debt expected to fall to 42 percent of GDP at end-2024 from 43.2 percent of GDP at end-2023.
  - External debt-to-GDP expected to edge up to 28.7 percent of GDP in 2024 from 28.2 percent in 2023, on the back of the debt management operation.
- Banking sector:
  - Recent capital injections into two undercapitalized banks boosted sector capitalization.
  - Credit to the private sector grew by 11.7 percent while deposits increased by 4.1 percent year-on-year in November 2024.
  - Non-performing loans remain high at about 13 percent in July 2024.

### Outlook, vulnerabilities, and risks
- Medium-term outlook: broadly positive but balance of risks tilted to the downside.
- Key downside risks:
  - Structural and governance weaknesses.
  - Ongoing internal conflicts and security concerns.
  - Social tensions around the presidential elections in October 2025.
  - Climate hazards (e.g., September floods in North and Far North regions).
  - External headwinds and geoeconomic fragmentation.
- Climate vulnerability: floods impacted infrastructure and agriculture; authorities reprioritized expenditures for emergency response while developing a disaster-risk financing strategy (Annex II).
- Structural reform constraints: appetite for new deep reforms is limited in the run-up to 2025 elections.

### Policy discussions and priorities
- Building fiscal resilience:
  - Maintain prudent fiscal stance through elections.
  - Strengthen domestic non-oil revenue mobilization and public financial management.
  - Limit spending through exceptional procedures to maintain budget discipline and integrity.
  - Advance reforms of public enterprises and the energy sector to limit contingent liabilities.
- Preserving debt sustainability:
  - Advance restructuring of the oil refinery (SONARA) and implement reforms in the electricity sector and other state-owned enterprises to limit contingent liabilities.
  - Continue prudent debt management to support gradual decline in public debt-to-GDP.
- Strengthening financial sector resilience and inclusion:
  - Continue bank recapitalization and privatization efforts to improve competitiveness and profitability.
  - Deepen domestic financial markets and collaborate with regional financial institutions.
  - Address high NPL share (~13 percent).
- Improving governance, anti-corruption and financial integrity:
  - Step up governance reforms.
  - Strengthen AML/CFT regime to support exit from FATF ‘grey’ list and lift EITI suspension.
- Addressing climate vulnerabilities:
  - Maintain RSF reform momentum and strengthen institutional framework for climate policies to build resilience and catalyze donor and private investment.

### Selected quantitative indicators (as presented)
- Disbursements to date: SDR 69.0 million (US$91.3 million).
- ECF-EFF original amount: SDR 483 million (US$ 689.5 million, or 175 percent of quota).
- ECF-EFF augmentation: SDR 110.4 million (US$ 145.4 million, or 40 percent of quota).
- RSF approved amount: SDR 138 million (US$ 181.7 million, or 50 percent of quota).
- Disbursements upon review completion: SDR 55.2 million (about US$73.5 million) under ECF-EFF; SDR 34.5 million (about US$46 million) under RSF.
- Real GDP growth: 3.7 percent (2022); 3.2 percent (2023); 3.6 percent (H1 2024 y/y); staff projection 3.9 percent (2024), 4.0 percent (2025), about 4.5 percent (medium term).
- Inflation (12-month CPI average): 7.4 percent (2023); 4.5 percent (December 2024).
- Non-oil revenue increase: 8 percent year-on-year (September 2024).
- Non-oil primary balance: deficit of about CFAF 70 billion (end-September 2024).
- Public debt: 43.2 percent of GDP (end-2023) → expected 42 percent of GDP (end-2024).
- External debt: 28.2 percent of GDP (2023) → expected 28.7 percent of GDP (2024).
- Banking sector NPLs: about 13 percent (July 2024).
- Private sector credit growth: 11.7 percent (year-on-year, November 2024).
- Deposits growth: 4.1 percent (year-on-year, November 2024).

*Source: IMF staff report — Cameroon: Seventh Reviews under the Extended Arrangement under the Extended Fund Facility and the Arrangement under the Extended Credit Facility, Request for a Waiver of Applicability of Performance Criteria, and Second Review under the Resilience and Sustainability Facility Arrangement (February 25, 2025).*

### 12. However, the risks are tilted to the downside. At the domestic level, social tensions over

### 12. However, the risks are tilted to the downside.

### Downside risks and external environment
- Domestic risks:
  - Social tensions over the political transition in the runup to the presidential elections may manifest.
  - Violence in conflict-affected regions could persist and escalate, possibly exacerbated by natural disasters.
  - Pre-electoral spending overruns may put pressure on the authorities’ resolve to persevere on the fiscal consolidation.
- Regional risks:
  - Policies inconsistent with regional stability, security challenges, and political instability.
- External risks:
  - Geoeconomic fragmentation (e.g., Ukraine and Middle East).
  - Growth slowdown in major economies with repercussions on trade and financial flows.
  - Volatility of commodity prices and financial markets.
  - Delays in the disbursement of donor support would aggravate liquidity constraints and developmental challenges.

### Macroeconomic projections and key statistics (selected)
- GDP growth (percent): 2023 Est. 3.2; 2024 3.9; 2025 3.9; 2026 4.2; 2027 4.0; 2028 4.1; 2029 4.4; (continuing entries: 4.6, 4.6)
- Consumer Price Inflation, average (percent): 2023 Est. 7.4; 2024 5.9; 2025 4.5; 2026 5.5; 2027 3.5; 2028 3.0; 2029 2.8; (continuing entry: 2.6, 2.5)
- Overall balance, including grants (percent of GDP): 2023 -0.6; 2024 -0.4; 2025 -0.6; 2026 -0.6; 2027 -0.3; 2028 -1.1; 2029 -1.1; (continuing entries: -1.1, -1.1)
- Non-Oil Primary Balance (percent of GDP): 2023 -2.5; 2024 -2.0; 2025 -2.0; 2026 -1.3; 2027 -1.3; 2028 -1.6; 2029 -1.6; (continuing entries: -1.6, -1.7)
- Current Account (percent of GDP): 2023 -4.1; 2024 -2.3; 2025 -3.4; 2026 -2.5; 2027 -2.8; 2028 -3.8; 2029 -3.6; (continuing entries: -3.4, -3.2)
- Public Debt (percent of GDP): 2023 43.2; 2024 42.0; 2025 42.0; 2026 39.5; 2027 39.4; 2028 37.9; 2029 36.5; (continuing entries: 35.0, 33.7)

### Program performance (2024)
- Overall assessment:
  - Program performance at end-June, end-September, and end-December 2024 was broadly satisfactory.
  - All continuous QPCs were met.
- End-June 2024:
  - All quantitative performance criteria (QPCs) and four of the six indicative targets (ITs) were met.
  - The IT on the share of spending through exceptional procedures was met for the first time during the program.
- End-September 2024:
  - Seven out of nine ITs were met.
  - Missed ITs: net accumulation of domestic payment arrears; ceiling on the SNH direct interventions.
  - Higher direct SNH interventions and persistent weaknesses in cash management led to a small underperformance on clearance of unpaid domestic obligations—by CFAF 19 billion—despite earlier-than-projected Eurobond issuance in July 2024.
- End-December 2024:
  - Two QPCs (for which data are available) were met.
  - Authorities requested a waiver of applicability for two remaining QPCs under the EFF arrangement (floor on the non-oil primary balance and ceiling on net domestic financing) as information will not be available before the Executive Board meeting; no clear evidence these QPCs will not be met (¶36).
- Reviews postponed:
  - The seventh reviews under the ECF-EFF arrangements and the second review under the RSF arrangement are postponed due to delay in obtaining CEMAC regional policy assurances and additional time needed to assess program performance.

### Corrective measures and transparency
- Authorities’ actions:
  - Started implementing corrective measures for missed ITs.
  - Contained spending through Treasury advances, while expenditures through SNH direct interventions increased.
  - Begun producing reports on direct SNH interventions and plan to gradually budget for such expenses to improve budget execution transparency.

### Structural benchmarks (SBs) and reform implementation
- SBs met on schedule (3 of 9 due for the seventh reviews):
  - SB4: List of the 25 largest public companies published on the Ministry of Finance website with links to audited financial statements of 11 of them.
  - SB5: Created a dataset of wages and salaries suitable for simulating PIT calculations ahead of deadline.
  - SB6: Included an annex in the 2025 budget on commitment authorizations (CAs) and payment appropriations (PAs) complying with the MTBF and investment project timetable.
- SBs implemented with delay (3):
  - SB1: Draft implementation texts of the 2016 Mining Code finalized and published in January 2025.
  - SB3: Decree specifying rules for managing budgetary authorizations and limiting common chapters to 10 percent of the budget in 2025.
  - SB8: Minister of Finance issued an instruction to strengthen management of correspondent accounts, closure of illegal accounts, clearance of existing arrears, and cash management rules in January 2025.
- SBs not met and proposed resets (2):
  - SB2: Adoption of revisions to the 2013 Law on investment incentives delayed (proposed reset to April 2025).
  - SB10: Recapitalization of a second bank delayed (proposed reset to April 2025); one bank recapitalized consistent with 8 percent capital adequacy ratio and Basel requirements.
- SB not completed:
  - SB9: SONARA restructuring study not completed due to delay in contracting a consultant and uncertainty over financing sources.
  - New SB11 proposed due May 15, 2025: interim report with four restructuring scenarios, estimates of operational and capital expenses, financial study of maximum capacity, and study of petroleum product markets in sub-Saharan Africa.
  - Authorities committed to finalizing and implementing SONARA restructuring study by end-2025.
- RSF arrangement reform measures:
  - Both RMs due for the second review were met:
    - RM4: Integrated climate change considerations into ex-ante project evaluation methodology.
    - RM6: Adopted revised Civil Protection Law and updated order governing the National Risk Observatory (ONR) to strengthen disaster risk prevention and coordination.

### Building fiscal resilience and revenue mobilization
- Fiscal consolidation:
  - Non-oil primary deficit projected to improve from 2.5 percent of GDP in 2023 to 2.0 percent of GDP in 2024 and decline to 1.3 percent of GDP in 2025.
  - Authorities submitted the 2025 budget law in line with the program macroeconomic and budgetary framework (prior action).
  - Contingency expenditure measures identified to preserve fiscal adjustment objectives.
- Non-oil revenue mobilization:
  - Projected non-oil revenues: 13.2 percent of GDP in 2024 versus 14.3 percent of GDP projected in 2021.
  - Factors for weaker performance: lack of progress on key tax policy reforms (revisions to the 2013 law on investment incentives, rationalization of VAT exemptions).
  - Recent improvements driven by tax administration advances, intensified tax and customs arrears recovery, increase in stamp duties, and one-off factors.
  - Authorities will continue to strengthen tax and customs administration in 2025 and beyond, including digitalization, recovering tax arrears, improving compliance, and strengthening integrity at customs in line with TA recommendations.
- Fuel subsidy and oil taxation:
  - Fuel subsidy estimated at about 0.3 percent of GDP in 2025 at latest projected international oil prices.
  - Staff estimate: a 1-standard deviation increase in oil prices would increase the subsidy to about 1.4 percent of GDP in 2025.
  - Standard deviation of about US$20 per barrel calculated based on historic oil prices data for the past ten years.
  - Tax reference price use resulted in tax expenditures (foregone revenue) of about CFAF 356 billion, or 1.2 percent of GDP in 2022-23.
  - Staff advised using the market oil price for taxation purposes and introducing an automatic fuel price adjustment mechanism over the medium term.
- Social safety nets:
  - Social assistance spending at 0.2 percent of GDP in 2021, less than half the average across peers and accrued mostly to the Central Region, benefiting richer and urban households.
  - Recommended actions: develop a unified registry of social assistance programs, map program beneficiaries, identify the poor (medium-term). Near-term options: increase funding for health and education where out-of-pocket expenditures are above regional and income-level averages; communicate objectives and expected effects to gather support.

### Public financial management (PFM), public investment management (PIM), and arrears
- PFM and PIM reforms advancing:
  - Measures to strengthen budget controls: eliminate common budgetary chapters over time, limit spending through exceptional procedures, publish procurement contracts online.
  - Cash management reforms and management of Treasury correspondent accounts ongoing (SB8).
  - Public procurement planning reforms (SB7 due May 2025).
  - Strategic PFM plan adopted in October 2024 to integrate gender and climate issues and improve information systems.
- Domestic arrears:
  - Stock of unpaid domestic obligations reduced from CFAF 743 billion at end-2023 to CFAF 517 billion at end-September 2024 due to additional external borrowing.
  - Weaknesses in cash management and budget execution through exceptional procedures prevented meeting the program ceiling on accumulation of domestic arrears at end-September by a small margin.
  - Delays in disbursements of budget support from the World Bank and the IMF partly contributed to liquidity constraints; net clearance of domestic obligations expected to be below program commitments by end-2024.

### Fiscal risks from state-owned enterprises (SOEs) and energy sector
- SONARA:
  - No tangible progress on restructuring; operating with a negative asset value and significant cost to the budget.
  - Restricted tender launched for technical and economic feasibility study; contract to be signed; interim study report expected within three months from signature; new SB proposed (SB11) with due date May 15, 2025.
- Other SOE issues:
  - Delays in signing performance contracts based on diagnostic studies and resolving cross debts with the state and between SOEs.
  - National investment agency established in 2024 to advance reforms and strengthen SOE oversight.
- ENEO (public utility company):
  - Liquidity difficulties added to budget pressures in 2023 and 2024.
  - Authorities include a budget provision to cover potential losses in addition to electricity subsidy spending and charges related to the operation of the new Nachtigal HPP.
  - Authorities negotiating acquisition of a stake in ENEO from Actis.
  - Recommended: additional investment to meet growing electricity demand, tariff reform to improve cost recovery, and strengthen billing and collection to limit budget risks.

### Debt sustainability and debt management
- Assessment:
  - Cameroon remains at high risk of debt distress, but public debt is sustainable and on a downward trajectory.
  - Two out of four external debt indicators (debt service-to-revenue ratio and debt service-to-exports ratio) breach thresholds under the baseline scenario, indicating high risk of debt distress (DSA, ¶22 and ¶24).
  - External debt stock indicators remain below thresholds; all debt service indicators are on a downward trend reflecting continued fiscal discipline.
  - Present value of public debt-to-GDP ratio fell below its threshold for the first time since the beginning of the ECF-EFF arrangements, indicating a declining risk of overall debt distress.
  - Export shock and commodity price shock are the most extreme shock scenarios across external debt indicators.
  - Overall assessment: debt is sustainable given authorities’ commitment to program objectives, fiscal consolidation, and active debt management.
- Debt management actions:
  - Government contained new external borrowing and pursued concessional loans for infrastructure and social projects.
  - Debt management operation: loan of about CFAF 131 billion from Afreximbank in January 2024.
  - Eurobond private placement of US$550 million (CFAF 332 billion) in July 2024; proceeds used to clear outstanding domestic obligations.
  - Authorities discussing cancelling contracted but non-performing project loans and reallocating unused external credit lines.
  - Plan to replace planned regional long-term government bond issuance of CFAF 380 billion with external commercial financing in 2025 due to tight regional market conditions and low subscriptions to government bond issuances.

### Public debt and debt service (selected table highlights)
- Total public debt (1/ Excludes public guarantees and other contingent liabilities):
  - Total $US, millions (2023): 20,558; Percent of total debt 100.0; Percent of GDP 41.4; Debt service $2,542 (2023), $2,964 (2024), $2,093 (2025).
- External debt (2023): $13,545; 65.9 percent of total; 27.3 percent of GDP.
  - Multilateral creditors (2023): $6,720; 32.7 percent of total; 13.5 percent of GDP.
  - IMF (2023): $1,448; 7.0 percent of total; 2.9 percent of GDP.
  - World Bank (2023): $2,555; 12.4 percent of total; 5.1 percent of GDP.
  - Bilateral creditors (2023): $5,224; 25.4 percent of total; 10.5 percent of GDP.
  - China (2023): $3,434; 16.7 percent of total; 6.9 percent of GDP.
- Domestic debt (2023): $7,013; 34.1 percent of total; 14.1 percent of GDP.
- Nominal GDP (CFAF, billions): 2023 29,891; 2024 32,099; 2025 34,452.
- Memo items: Contingent liabilities 881; Public guarantees (external) 120.0.

*Source: Country authorities; and IMF staff calculations.*

### 27. Efforts are underway to address balance sheet vulnerabilities in the financial sector.

### 27. Efforts are underway to address balance sheet vulnerabilities in the financial sector.

### Balance sheet vulnerabilities and bank recapitalization
- Ongoing recapitalization of two banks is intended to strengthen sector resilience, but high NPLs and the sovereign-bank nexus remain sources of vulnerabilities.
- A structural benchmark (SB10, MEFP¶34) on the recapitalization was not met, although:
  - The authorities have fully recapitalized one bank.
  - The authorities are committed to completing the recapitalization of the other bank by end-April 2025.
- Recommendation: Funding for increasing the second bank’s capital base should be structured on marketable terms to ensure the bank's medium-term viability is not compromised.
- The authorities are working on deepening the domestic secondary market (supported by IMF technical assistance, MEFP¶36) to help reduce banks’ exposure.
- Banks’ exposure to the CEMAC’s public sector, including state-owned enterprises (SOEs) was 37 percent at end-2023.

### Nonperforming loans (NPLs) and MSME access to credit
- Authorities’ medium-term actions to reduce NPLs and improve MSMEs’ access to credit include:
  - Creation of a credit registry, a balance sheet registry and a rating system for companies and individuals, in conjunction with the BEAC.
  - Creation of a land title registry.
  - Establishment of a state guarantee fund for SMEs.
- Additional recommended measures:
  - Establish commercial courts.
  - Support additional training for commercial judges.
- For NPLs transferred to the state asset management company (Société de Recouvrement des Créances, SRC):
  - A sunset clause is being introduced for the recovery of assets.
  - SRC has recruited several new magistrates to strengthen security and judicial aspects of its activities.
  - SRC is working on recovery of illicit funds or funds seized abroad by collaborating with foreign authorities (MEFP¶40).

### Financial stability risks from the Caisse des Dépôts et Consignations (CDEC)
- Financial stability risks from the growing role of the deposit and consignment fund should be mitigated by adopting formal supervision.
- The government has clarified the operational mandate of the CDEC and is working toward full implementation in compliance with Cameroonian legislation.
- CDEC will collaborate with BEAC and COBAC to:
  - Assess the need for supervision of its activities.
  - Ensure depositors’ interest is always protected.
  - Minimize risks to financial stability (MEFP¶38).

### Financial inclusion and sector development
- Implementation of the national financial inclusion strategy and financial sector development strategy is underway. The financial inclusion strategy aims to increase the penetration of banking services by:
  - Strengthening financial education.
  - Improving quality, availability and accessibility of financial products and services.
  - Facilitating access to financing for agricultural value chains and MSMEs.
  - Promoting innovation and digital finance.
- Mission recommendation: Implement the financial inclusion strategy in synergy with the CEMAC strategy to promote greater financial inclusion across the region.
- The government is operationalizing a guarantee fund to improve SMEs’ access to credit; a study with the World Bank to improve the fund’s effectiveness and efficiency is underway.
- These developments would also facilitate funding for climate mitigation and adaptation efforts.

### Governance, anti-corruption, and financial integrity
- Authorities are implementing recommendations from the 2023 Governance Diagnostic Report selectively, with limited progress on anti-corruption measures so far.
- Main reform focus: SOE management and transparency, and strengthening the PFM framework.
- Recent transparency action: Publication on the Ministry of Finance website of hyperlinks to the audited annual financial statements of the 25 largest companies (SB4, November 2024).
- Remaining reform agenda includes:
  - Alignment of anticorruption legal and institutional frameworks with the United Nations Convention Against Corruption, including criminalization of acts of illicit enrichment.
  - Drafting a Code of Financial Jurisdictions.
  - Amending the Penal Code.
  - Implementing the asset declaration law.
- Reforms underway aim to strengthen tax and customs administration, boost integrity through digitalization and public sensitization (Annex IV).

### Extractive Industries Transparency Initiative (EITI) corrective actions
- Corrective actions to lift the suspension from EITI are underway ahead of next validation in April 2027:
  - Government finalized appointment of the EITI committee, including civil society members, and published implementing texts of the new Mining Code (SB1, June 2024).
  - A beneficial ownership registry was established at the General Directorate of Taxes allowing access to some public entities and the EITI committee.
  - Authorities intend to adopt implementing texts of the code of transparency and good governance in public finance management and publish production sharing agreements in the extractive sector (private companies have given consent).
  - Multi-stakeholder group still needs revamping to ensure civil society participation through an open and transparent selection process (MEFP¶42).

### AML/CFT strengthening
- Cameroon is working with the FATF and GABAC to strengthen the AML/CFT regime.
- Actions by the new National AML/CFT Policy Coordination Committee have:
  - Increased resources for the Financial Intelligence Unit.
  - Strengthened capacity of investigative authorities and judicial bodies to pursue ML/TF cases.
- New requirements and cooperation frameworks:
  - Companies now required to submit information on their beneficial owners in annual returns.
  - Framework for cooperation between ANIF and the BEAC to enhance audit of suspicious financial flows.
- Remaining work includes aligning national AML/CFT policies with the national risk assessment findings and increasing accessibility of adequate and up-to-date beneficial ownership information (MEFP¶43, 44).

### Climate vulnerabilities, RSF-supported reforms, and climate investment
- Reforms implemented and supported by the RSF are showing progress towards climate action:
  - National Committee for the Facilitation of the Implementation of Climate Change was established in May 2024 and advanced development of the National Climate Plan.
  - Committee is working on updating Cameroon’s 2025 Nationally Determined Contributions (NDCs) (MEFP¶45).
  - 2025 Update of the NDCs will revise objectives in the energy sector to:
    - Quadruple production capacity.
    - Increase the use of renewables in electricity production.
    - Improve soil management by developing carbon sinks.
  - A framework for incorporating climate change into project selection criteria (RM3) identified 74 priority projects for inclusion in the 2025–27 investment program.
- Implementation of RSF reform measures:
  - Final measures due in April 2025 expected to advance institutional structures for climate change and C-PFM.
  - After IMF technical assistance in September 2024, timetables for the National Climate Plan (RM2) and a disaster risk financing strategy (RM7) were prepared.
  - Disaster-risk financing strategy will feature a mix of instruments for timely and cost-effective resource mobilization in response to disasters (Annex II).
  - Progress on forestry measure (RM8) is ongoing; discussions on integrating fiscal and forestry data infrastructures are in progress.
  - Deployment of second-generation Forest Information Management System (SIGIF2) is underway with commissioning of operational modules such as exports, control, and traceability, and issuance of certificates (MEFP¶47).

### Program issues, risks, and financing
- Regional assurances and BEAC actions:
  - BEAC missed its NFA target for end-June 2024 by a small margin and provided updated policy assurances supporting CEMAC countries’ Fund-supported programs.
  - BEAC resumed weekly liquidity injections in June 2024 and maintained a tightening bias in monetary policy.
  - BEAC is addressing COBAC’s staff issues and strengthening CEMAC’s banking supervision and resolution frameworks.
  - A review of regional policies and policy assurances was discussed by the Executive Board in February 2025; adequate policies and assurances are a condition for the conclusion of the review.
- Program calendar and requests:
  - One final review ahead of program expiration in July 2025.
  - Authorities request modification of end-March 2025 ITs to reflect changes in the macroeconomic framework, budget projections, and program commitments.
  - Authorities request a waiver of applicability for two end-December 2024 QPCs under the EFF arrangement because necessary information will not be available by the Board date.
- Prior actions for completion of seventh reviews of the ECF-EFF-supported program:
  - (i) Submit to Parliament the 2025 Budget Law in line with the program macroeconomic and budgetary framework — already met.
  - (ii) Sign a contract with the consultant for the in-depth technical and economic study for restructuring SONARA.
- Financing and repayment capacity:
  - As of end-October 2024, total outstanding credit from the Fund amounted to 409.5 percent of quota.
  - Total Fund credit outstanding (based on existing and prospective drawings) peaks at 3.0 percent of GDP in 2024.
  - Annual obligations to the Fund peak at about 3.0 percent of revenues in 2027.
  - Cameroon’s capacity to repay the IMF is adequate but subject to significant risks; accelerating reforms, political support, and engagement of other international partners are critical to mitigate risks.
- Program risks and mitigation:
  - Risks are elevated: institutional and governance weaknesses, social and political tensions, security risks, election spending overruns, and potential external shocks.
  - Mitigations: Cameroon’s past record of repaying the Fund, close engagement with donors, a comprehensive CD program, and contingency planning.
- Financing assurances:
  - Program remains fully financed with firm commitments for the remainder of the program ending in July 2025.
  - African Development Bank and French Development Agency provided budget support in 2024.
  - World Bank budget support expected to be delayed and disbursed by end-March 2025; shortfall to be covered by other financing, including domestic financing.

### Staff appraisal — key findings and recommendations
- Growth and outlook:
  - Real GDP growth was 3.2 percent in 2023 and is expected to increase to 3.9 percent in 2024.
  - Medium-term outlook broadly positive but risks tilted to the downside, including social tensions around elections and pre-electoral spending overruns.
- Program performance:
  - All QPCs and four of the six ITs were met at end-June.
  - Seven out of nine ITs were met at end-September.
  - Two QPCs (for which data are available) were met at end-December 2024.
  - All three continuous QPCs were met.
  - Out of nine SBs due for the seventh reviews, three were met on schedule, three implemented with delay; two are proposed to be reset to April 2025 and one proposed to be replaced.
- Fiscal policy:
  - Fiscal consolidation is on track and expected to continue into 2025.
  - Substantial reduction of the fuel subsidy is an important achievement creating fiscal space.
  - Stronger non-oil revenue mobilization requires bolder political action on tax incentives.
  - Further strengthening of PFM is essential for growth-enhancing fiscal consolidation.
- Financial sector:
  - Financial sector capitalization improved via recapitalization to comply with COBAC regulations and the Basel capital adequacy framework.
  - Structural vulnerabilities remain: high NPLs and banks’ exposure to public sector entities in CEMAC.
  - Recommendation: deepen domestic secondary market for securities and monitor associated risks in consultation with COBAC.
- Governance and integrity:
  - Urged cooperation with FATF and GABAC to strengthen AML/CFT with the aim of exiting the "grey list" soon.
  - Continued efforts to implement corrective actions to lift EITI suspension are crucial.
  - Continue work on governance weaknesses identified in the IMF governance diagnostic report.
- Debt and SOE reform:
  - Cameroon remains at high risk of debt distress, but public debt is sustainable and expected to remain on a downward path.
  - Staff urges advancing restructuring of SONARA and implementing reforms in the electricity sector and other SOEs to limit contingent liabilities and improve public services.
- RSF progress:
  - Authorities have made good progress under the RSF; two reform measures due for the second review were met.
  - Maintaining RSF reform momentum and strengthening institutional climate policy frameworks is essential to build resilience and catalyze new investments.

*Source: 1cmrea2025001-print-pdf - 27. Efforts are underway to address balance sheet vulnerabilities in the financial sector.*

### 50. Based on Cameroon’s performance under the program, and regional policy assurances

### 50. Based on Cameroon’s performance under the program, and regional policy assurances

### Program reviews, modifications, and waivers
- Staff supports completion of the seventh reviews under the ECF-EFF arrangements and the second review under the RSF arrangement.
- Staff supports the authorities’ requests for:
  - modification of the indicative targets for end-March 2025; and
  - a waiver of applicability for two end-December 2024 QPCs (i.e., for the floor on the non-oil primary balance and the ceiling on net domestic financing),
    - rationale: data will not be available by the time of the Board meeting, and notwithstanding the unavailability of the information necessary to assess observance, the program will be successfully implemented, and there is no clear evidence that such QPCs will not be met.
- The eighth reviews under the ECF-EFF arrangements will be conditional on the implementation of critical policy assurances on NFAs at the union level, set for end-March 2025, and as established in the February 2025 union-wide background paper.

### Real sector developments (2019–24) — key findings
- Growth dynamics:
  - Growth continues in the primary and the tertiary sectors while the extractive sector is contracting.
  - The tertiary sector remains the main driver of growth.
- Demand-side developments:
  - Private consumption and investment are slowing down, but imports are also contracting.
  - Public demand contributes to growth alongside the above trends.
- Output and inflation:
  - Overall GDP growth remains below its potential.
  - Inflation pressures are easing.
- Indicators and series referenced:
  - Real GDP Growth, Supply-side Components (Percent, YoY).
  - Real GDP Growth, Supply-side Contributions (Percent, YoY).
  - Real GDP Growth, Demand-side Components (Percent, YoY).
  - Real GDP Growth, Demand-side Contributions (Percent, YoY).
  - Output Gap and GDP Growth (Percent).
  - Food and Non-Food Inflation (Percent, YoY).
- Data sources: Country authorities, BEAC, and IMF staff calculations.

### Fiscal developments (2019–25) — key findings and projections
- Revenue and spending:
  - Non-oil revenues are expected to improve in 2024 and 2025.
  - Public spending will decline due to lower subsidies and transfers and goods and services.
- Fuel subsidy and balances:
  - The fuel subsidy is expected to decline further in 2024 and 2025.
  - The overall balance and the NOPB are expected to continue improving.
- Public debt and domestic obligations:
  - The authorities are making efforts to reduce the stock of domestic payment obligations.
  - Continued economic recovery and fiscal adjustment have contributed to a favorable public debt dynamic.
- Fiscal series referenced:
  - Government Revenue (Percent of GDP).
  - Public Spending (Percent of GDP).
  - Fuel Subsidy and World Oil Prices (Percent of GDP, USD per barrel).
  - Fiscal Balance (Percent of GDP).
  - Domestic Payment Obligations (bn CFAF).
  - Public Debt (Percent of GDP).
  - Breakdown series: Domestic Debt, External Debt, Exchange Rate (CFAF to USD, RHS); > 90 days, billion CFAF; < 90 days, billion CFAF; Total (percent of GDP, right axis).
  - Expenditure composition: Capital Expenditure; Goods and Services; Wages and Salaries; Interest; Subsidies and Transfers.
  - Balance metrics: Overall Deficit; Primary Deficit; Non-Oil Primary Deficit.
  - Sectoral contributions: Non-Oil Sector; Grants; Oil Sector.
- Time references in charts and projections: 2019, 2020, 2021, 2022, Est.2023, Est.2024, Proj.2025.

### External sector developments (2016–25) — key findings and projections
- Current account and trade:
  - The current account is expected to improve in 2024 and 2025 on the back of strong non-oil exports.
  - The external balance is expected to improve in 2024 with improved trade balance and stronger financial inflows.
- Commodity prices and exports:
  - Cocoa prices increased significantly in 2024 and are expected to remain high in 2025 albeit declining.
  - High cocoa prices have supported non-oil exports in 2024, more than offsetting the decline in oil exports.
- Exchange rates and terms of trade:
  - The CFA franc remained broadly stable against the US dollar in 2024 while the nominal and real effective exchange rates appreciated.
  - Terms of Trade and International Commodity Prices referenced (Prices Index, 2016 = 100).
- Imports:
  - Import volumes are increasing moderately, but declining import prices are containing the trade balance effect.
- Balance of payments components referenced:
  - Goods; Services; Primary Income; Secondary Income; Current Account Balance.
  - Current Account; Capital Account; Financial Account; Errors and Omissions; Overall Balance.
- Exports and imports by category referenced:
  - Exports: Oil Products; Cacao; Wood; Cotton; Other Manufactures; Others.
  - Imports: Oil Products; Food; Intermediate Goods; Investment Goods; Other Mineral Products; Others.
- Time references in charts and projections: 2016–2025 series including 2017–2025 projections.

### Monetary sector developments (2017–24) — key findings
- Policy stance and market impacts:
  - BEAC has maintained a tight monetary policy stance.
  - This contributed to the upward shift in the government yield curve amid high issuances from CEMAC countries.
- Transmission and monetary aggregates:
  - The tight stance has had little impact on the dynamics of broad money and credit due to weak monetary policy transmission.
- Financial sector metrics:
  - Capital adequacy has improved amid high zero-risk-weighted banks’ exposure to the sovereign.
  - NPLs at end-2023 were slightly lower relative to end-2022 but remain high.
  - Excess reserves have decreased moderately following BEAC's absorption operations.
- Series and indicators referenced:
  - CEMAC Monetary Policy Rates (Percent).
  - Yield Curve (Percent).
  - Broad Money and Credit Growth (Percent change, YoY).
  - Capital Adequacy (Percent): Total bank regulatory capital to risk-weighted assets; Total capital (net worth) to assets.
  - Asset Quality (Percent): Non-performing loans (gross) to total loans (gross); Non-performing loans less provisions to regulatory capital.
  - Excess Reserves (Billion CFAF).
  - Interest and inflation series: BEAC TIAO Rate (lhs); Interest rate on marginal lending facility (lhs); Headline inflation (yoy, rhs).
  - Yield curve tenors referenced: 3-Month, 6-Month, 12-Month, 18-Month, 24-Month, 3 Year.
- Data sources: Country authorities, BEAC, and IMF staff calculations.

*Source: 1cmrea2025001-print-pdf - 50. Based on Cameroon’s performance under the program, and regional policy assurances*

### 3.5 Year

### 3.5 Year

### Macroeconomic outlook and prices
- GDP at constant prices: 3.2 3.9 3.9 4.2 4.0 4.1 4.4 4.6 4.6
- Oil GDP at constant prices: -2.1 -7.8 -2.7 -3.4 -7.7 -1.4 5.5 8.2 5.6
- Non-Oil GDP at constant prices: 3.4 4.1 4.0 4.4 4.2 4.2 4.4 4.6 4.6
- GDP deflator: 4.7 3.8 3.4 3.5 3.2 2.6 2.2 2.2 2.2
- Consumer prices (average): 7.4 5.9 4.5 5.5 3.5 3.0 2.8 2.6 2.5
- Consumer prices (eop): 5.9 5.5 5.0 5.2 3.4 2.9 2.6 2.4 2.0

### Money and credit
- Broad money (M2) (annual percentage change): 2.9 9.3 8.8 7.6 7.0 6.5 6.2 6.4 6.9
- Net foreign assets (percent of M2 at beginning): -6.9 10.7 4.6 4.2 7.8 -1.1 -1.0 -0.7 -0.4
- Net domestic assets (percent of M2 at beginning): 9.8 -1.3 4.2 3.4 -0.8 7.6 7.2 7.0 7.3
- Domestic credit to the private sector (annual percentage change): 19.0 9.5 9.5 7.7 7.7 7.4 7.2 7.2 7.3
- Credit to the economy (annual percentage change): 17.4 8.5 8.5 6.5 6.9 7.0 6.7 7.0 7.1
- Broad money (level, CFAF billion): 8,445 9,336 9,188 10,046 9,834 10,472 11,125 11,834 12,656
- Currency outside banks (CFAF billion): 1,803 1,962 1,951 2,104 2,080 2,208 2,339 2,480 2,645
- Deposits (CFAF billion): 6,643 7,374 7,237 7,943 7,753 8,264 8,786 9,353 10,011

### Savings, investment, and external sector ratios
- Gross national savings (percent of GDP): 15.4 17.5 17.2 17.6 18.3 18.4 19.3 19.8 20.3
- Gross domestic investment (percent of GDP): 19.5 19.8 20.6 20.2 21.1 22.3 22.9 23.2 23.5
- Public investment (percent of GDP): 3.9 5.4 5.4 6.0 6.0 6.9 7.4 7.7 8.2
- Private investment (percent of GDP): 15.6 14.4 15.2 14.1 15.0 15.4 15.5 15.6 15.3
- Trade balance (percent of GDP): -2.8 -1.7 -2.2 -1.9 -1.6 -2.6 -2.5 -2.4 -2.2
- Oil exports (percent of GDP): 5.4 4.6 4.6 4.2 4.3 3.4 3.1 3.1 3.1
- Non-oil exports (percent of GDP): 7.5 8.9 8.5 8.4 8.7 8.3 8.4 8.3 8.3
- Imports (percent of GDP): 15.7 15.2 15.3 14.4 14.6 14.4 14.0 13.8 13.6
- Current account balance (percent of GDP) excluding official grants: -4.4 -2.6 -3.6 -2.8 -3.0 -4.0 -3.8 -3.6 -3.3
- Current account balance (percent of GDP) including official grants: -4.1 -2.3 -3.4 -2.5 -2.8 -3.8 -3.6 -3.4 -3.2
- Terms of trade (percent change): 8.8 12.2 11.7 -4.9 2.7 -16.7 -4.9 1.5 1.0
- Oil price ($US dollars per barrel): 80.68 81.37 79.07 76.46 69.86 68.06 67.06 66.66 66.5

### Public debt and fiscal operations (central government)
- Stock of public debt (percent of GDP): 43.2 42.0 42.0 39.5 39.4 37.9 36.5 35.0 33.7
- Of which: external debt (percent of GDP): 28.2 29.9 28.7 29.0 29.9 28.7 27.5 26.3 25.2

Key fiscal aggregates (CFAF billion)
- Total revenue and grants: 4,923 5,151 5,118 5,278 5,464 5,653 6,087 6,532 7,114
- Total revenue: 4,783 5,047 5,014 5,198 5,374 5,609 6,048 6,512 7,094
  - Oil sector revenue: 877 802 762 556 735 585 624 649 731
  - Non-oil sector revenue: 3,906 4,246 4,252 4,642 4,639 5,023 5,423 5,863 6,363
- Total expenditure: 5,112 5,280 5,309 5,484 5,564 6,072 6,535 7,013 7,621
  - Current expenditure: 3,978 3,653 3,682 3,465 3,701 3,810 4,000 4,247 4,490
  - Capital expenditure: 1,118 1,604 1,604 1,939 1,863 2,262 2,535 2,766 3,131
  - Interest: 320 320 320 339 378 432 460 478 496
- Overall fiscal balance (payment order basis) excluding grants (percent of GDP): -1.1 -0.7 -0.9 -0.8 -0.6 -1.3 -1.2 -1.2 -1.2
- Overall fiscal balance (payment order basis) including grants (percent of GDP): -0.6 -0.4 -0.6 -0.6 -0.3 -1.1 -1.1 -1.1 -1.1
- Overall balance (cash basis) excluding grants (percent of GDP): -0.9 -2.5 -2.6 -1.4 -1.2 -1.7 -1.5 -1.2 -1.2
- Overall balance (cash basis) including grants (percent of GDP): -0.5 -2.1 -2.3 -1.1 -0.9 -1.6 -1.4 -1.1 -1.1
- Non-oil primary balance (payment order basis, percent of non-oil GDP): -2.6 -2.0 -2.0 -1.3 -1.4 -1.6 -1.6 -1.6 -1.7

Financing and memorandum items
- Financing (CFAF billion): 141 412 640 271 945 895 454 825 507
- External financing, net (CFAF billion): -386 916 943 942 744 630 381 402 392
- Amortization (CFAF billion): -595 -643 -592 -596 -650 -493 -579 -625 -664
- Drawings (CFAF billion): 557 1,334 1,286 934 1,345 900 960 1,027 1,056
- Financing gap (CFAF billion): 0 25 48 8 106 213 0 0 0
- IMF Financing (CFAF billion): 89 44 45 90 0 0 0 0 0

### Balance of payments (CFAF billion)
- Current account balance: -1,225 -725 -1,089 -858 -968 -1,407 -1,415 -1,447 -1,460
- Trade balance: -848 -531 -713 -636 -547 -974 -990 -1,008 -970
- Exports, goods: 3,853 4,207 4,186 4,237 4,494 4,310 4,507 4,788 5,161
  - Oil and oil products: 1,615 1,430 1,469 1,418 1,484 1,258 1,203 1,298 1,412
  - Non-oil sector: 2,238 2,776 2,717 2,819 3,010 3,052 3,304 3,491 3,749
- Imports, goods: -4,701 -4,737 -4,898 -4,873 -5,041 -5,284 -5,497 -5,797 -6,131
- Services (net): -330 -319 -357 -335 -357 -319 -300 -320 -330
- Income (net): -588 -455 -562 -484 -618 -692 -738 -775 -814
  - Of which: interest due on public debt: -210 -182 -182 -190 -212 -254 -271 -275 -279
- Transfers (net): 541 579 542 597 554 579 613 657 654
- Capital and financial account balance: 772 1,384 1,376 1,104 1,450 1,268 1,284 1,343 1,383
- Overall balance: -337 659 287 247 482 -139 -131 -104 -77
- Gross reserves accumulation (without RSF) (+ = decrease): 261 -862 -324 -274 -616 269 282 240 213
- Net use of IMF credit: 77 -51 -51 -78 -79 -130 -151 -137 -136
- Gross reserves accumulation (with RSF, CFAF billion) (+ = decrease): 261 -917 -352 -330 -700 269 282 240 213

### Monetary survey highlights (CFAF billion)
- Net foreign assets: 2,550 3,888 2,939 4,281 3,658 3,549 3,448 3,374 3,327
  - BEAC: 1,526 2,405 1,885 2,769 2,574 2,435 2,304 2,200 2,123
  - Of which: BEAC foreign assets: 2,930 3,848 3,282 4,177 3,983 3,714 3,432 3,191 2,978
  - Of which: IMF credit: -871 - 908 -864 -875 -875 -745 -594 -458 -322
- Net domestic assets: 5,896 5,448 6,250 5,765 6,176 6,923 7,677 8,460 9,329
- Domestic credit: 7,187 7,155 7,440 7,446 7,552 7,893 8,473 9,124 9,827
- Credit to the private sector: 4,580 4,650 5,015 5,008 5,401 5,801 6,218 6,666 7,153
- Broad money: 8,445 9,336 9,188 10,046 9,834 10,472 11,125 11,834 12,656

### Financial soundness indicators (selected, percent)
- Total bank regulatory capital to risk-weighted assets: 10.8 10.7 13.8 14.2 15.0 15.3
- Total capital (net worth) to assets: 5.0 5.1 6.5 6.5 6.7 6.6
- Non-performing loans (gross) to total loans (gross): 12.4 12.8 13.4 14.1 13.0 12.9
- Return on assets: 1.8 2.1 0.9 3.9 2.4 (annual series as presented)
- Liquid assets to total assets: 26.4 25.9 30.1 30.3 31.4 28.5

### IMF arrangements, disbursements, and capacity to repay (selected)
- Total scheduled disbursements under ECF and EFF (millions of SDRs across listed dates): totals shown as 215.0 71.7 143.3 593.4 197.8 395.6 (as presented in the disbursement schedule)
- RSF total availability: 50.0 138.0 (Percent of quota and SDR million entries listed in RSF schedule)
- External financing needs and sources (CFAF, billions): Total Financing Requirements 205 623 131 762 186 319 682 047 (table entries by year); Financing Sources 196 821 001 762 186 319 682 047; Financing Gap 88 213 0 0 0 (as presented)
- Scheduled IMF Financing entries in external financing needs: 44 900 0 0 0 (as presented: ECF 15 300 000; EFF 30 600 000; totals in table)

*Sources: Country authorities; and IMF staff estimates and projections.*

### Annex I.  Risk Assessment Matrix

### Annex I. Risk Assessment Matrix

### External risks
- Intensification of regional conflicts
  - Likelihood: High
  - Impact if Realized:
    - Higher inflation and increased food insecurity would intensify.
    - Supply chain disruptions would continue to affect businesses.
    - Spending pressures (including on fuel subsidies) would increase, with extension of tax exemptions, which jeopardize fiscal strategy.
    - Could amplify existent social risks.
  - Recommended Policy Response:
    - Create fiscal space through wage bill control, spending review, and revenue mobilization for new policies to mitigate supply shocks in the economy.
    - Prioritize and target public spending towards the most vulnerable people.
    - Review and reprioritize tax exemptions for programs with higher economic and social impact.

- Global growth surprises — Slowdown / Acceleration
  - Likelihood: Medium (slowdown) / Low (acceleration)
  - Impact if Realized:
    - Slowdown: Slower growth due to weaker demand from trade partners, with worsening current account.
    - Acceleration: Stronger demand from trade partners would support external trade and economic growth.
  - Recommended Policy Response:
    - Adjust fiscal policy to anchor expectations of economic agents.
    - Prioritize and target public spending towards the most vulnerable people.
    - Monitor macro-financial risks.

- Deepening geoeconomic fragmentation
  - Likelihood: High
  - Impact if Realized:
    - Risk of reconfiguration of relations with traditional partners.
    - Further supply disruptions.
    - High input costs, financial instability.
    - Lower potential growth.
  - Recommended Policy Response:
    - Accelerate labor and product market reforms to support diversification of exports and extend trade relations.
    - Diversify trade partners, especially by leveraging the potential of the AfCFTA.

- Monetary policy calibration
  - Likelihood: Medium
  - Impact if Realized:
    - High inflation would impact the vulnerable and food insecurity.
    - Increase in risk premia, including sovereign risk premium, heightened financial sector instability risk.
  - Recommended Policy Response:
    - In the short term, the regional central bank will need to remain vigilant, adjusting the monetary stance as needed.
    - In the medium-term, Cameroon needs to accelerate implementation of reforms to strengthen the resilience of the financial sector.

- Sovereign debt distress
  - Likelihood: Medium
  - Impact if Realized:
    - Capital outflows.
    - Increase in borrowing costs.
  - Recommended Policy Response:
    - Enhance banking supervision and enforce prudential regulations.
    - Create fiscal space to absorb economic, financial, and other shocks.
    - Advance SOE restructuring and PFM reforms.
    - Strengthen investor relations.

- Cyberthreats
  - Likelihood: Medium
  - Impact if Realized:
    - Impact on public services that rely on digital infrastructure.
    - Could slow down financial inclusion progress.
  - Recommended Policy Response:
    - Create contingent plans for cyberattacks.

- Climate change
  - Likelihood: High
  - Impact if Realized:
    - Harm agricultural production, worsening the livelihood of people in rural areas and exacerbating extreme poverty and inequalities.
    - Higher recovery spending, higher financing costs, and lower revenues.
    - Supply disruptions and weaker confidence.
  - Recommended Policy Response:
    - Improve capacity for monitoring and assessing climate policies and strengthening early warning systems.
    - Address infrastructure gaps and income/developmental disparities among regions, while instituting appropriate social safety nets.
    - Promote climate-smart agriculture.
    - Strengthen institutional and governance framework for climate change related policies.
    - Sustain progress on reform measures under the RSF.

- Systemic financial instability
  - Likelihood: Medium
  - Impact if Realized:
    - Limited credit extension would hamper investment and growth.
    - Potential contingent liabilities would add to fiscal pressures.
  - Recommended Policy Response:
    - Enhance banking supervision and enforce prudential regulations.
    - Improve processes and procedures for collection of debts and collateral.
    - Create fiscal space to absorb financial shocks.

### Domestic risks
- Social tensions over presidential election
  - Likelihood: Medium
  - Impact if Realized:
    - Could exacerbate existing social tensions and violence.
    - Economic slowdown or recession.
    - Food insecurity and poverty rate could increase.
    - Spending overruns.
    - Diversion of resources from efficient reforms.
    - Delays in the reforms under the current Fund arrangements (ECF, EFF and RSF).
  - Recommended Policy Response:
    - Improve governance.
    - Review and reprioritize public spending towards programs with higher economic and social impact.
    - Prioritize and target public spending towards the most vulnerable people.
    - Promote inclusive growth.
    - Sustain fiscal discipline and reform efforts.

- Social discontent
  - Likelihood: High
  - Impact if Realized:
    - Social unrest could delay fiscal adjustment.
    - Social discontent and spillovers from regional crises (e.g., displacements of populations) could fuel existing internal tensions.
    - Rising unrest would further disrupt agricultural production and growth.
    - Delays in investment projects might be exacerbated.
  - Recommended Policy Response:
    - Review and reprioritize public spending towards programs with higher economic and social impact.
    - Create fiscal space to tackle financial vulnerabilities.
    - Mobilize additional grants and concessional loans from financial and technical partners to cover prioritized needs.

### RAM methodology and contextual notes
- The Risk Assessment Matrix (RAM) shows events that could materially alter the baseline path.
- The relative likelihood is the staff’s subjective assessment of the risks surrounding the baseline (“low” is meant to indicate a probability below 10 percent, “medium” a probability between 10 and 30 percent, and “high” a probability between 30 and 50 percent).
- The RAM reflects staff views on the source of risks and overall level of concern as of the time of discussions with the authorities.
- Non-mutually exclusive risks may interact and materialize jointly.
- The conjunctural shocks and scenarios highlight risks that may materialize over a shorter horizon (between 12 to 18 months) given the current baseline. Structural risks are those that are likely to remain salient over a longer horizon.

*Source: Annex I. Risk Assessment Matrix, IMF staff.*

### 3. Improvement in transparency is pursued through a systematic publication of

### 1cmrea2025001-print-pdf - 3. Improvement in transparency is pursued through a systematic publication of

### Transparency, communication, and outreach
- The Directorate General of Customs publishes on-line annual reports on missions in revenue mobilization, litigation, and fight against illicit trafficking; these publications are distributed through public and private media and in certain professional fora.
- Internal communication:
  - Best practices disseminated via the Customs Newsletter.
  - Publication of performance contract results and disclosure of positive and negative sanctions of customs agents.
  - Training seminars for new recruits and forum discussions open to partners disputing information relating to the taxation of goods.
- External communication and stakeholder engagement:
  - Training sessions with representatives of brokers, banks, embassies, and diaspora on roles and interactions with the customs administration in managing foreign trade.
  - Dissemination of a manual on procedures in Cameroon Customs Information System and a Customs User's Guide.
  - Dissemination of digital and physical media on electronic payment of customs duties and taxes.
  - Organized a training campaign for vocational learners in the foreign trade supply chain.
- Recommendations highlighted in the text:
  - Strengthen communication.
  - Accelerate widespread digital ization of current procedures.

### Digitalization and trade facilitation
- 2023: electronic payments of customs duties and taxes were rolled out nationwide.
- Operational effects of digitalization described:
  - Operationalization of the Single Output Document enabling diversified payment methods: transfers, credit cards, cash, mobile money.
  - Electronic processing and collection of handling fees, levies, contributions, import declaration fees, in addition to customs duties and taxes.
  - Strengthened collaboration through sharing of digital information with banks and other entities (national transport and shipping groups CNCC and GPAC).
  - Interfacing of the electronic customs clearance system, CAMCIS, with the information system of the Ministry of Transport is expected to curb fraud in vehicle registration, an important contributor to customs duties collected.
- Expected benefits: facilitate trade, improve transparency and traceability, allow better monitoring and reporting, improve risk analysis, and strengthen overall accountability.

### Annex V — Cost of Delays in Public Investment Implementation: summary of findings
- General context:
  - Public investment implementation in Cameroon has often been delayed due to weaknesses in project preparation and management, public procurement, and cash flow planning, producing significant economic, social, and environmental costs.
  - Need to step up reforms in public investment and financial management (PIM).
- Empirical context from literature:
  - Espinoza and Presbitero (2022) analyze a sample of 4,010 investment projects approved since 1990 in 135 emerging markets and developing countries; they establish that almost 60 percent of investment projects have been delayed by at least one year.
- Cameroon-specific project-timing outcomes:
  - Sample: 20 large externally financed investment projects signed during 2012-20 across various sectors with multilateral, bilateral, and commercial creditors.
  - In Cameroon, only about a quarter of projects were implemented on time, while the remaining three quarters were delayed by at least two years.
  - The average project grace period in the sample is estimated at six years.
  - By the end of the average grace period (six years), only about half of the portfolio is disbursed.
  - About 70 percent is disbursed over ten years.
  - By creditor type: only one third of projects from both bilateral and commercial creditors are completed within their contractual grace period.
  - Multilateral creditor projects show longer delays despite a longer average grace period of about 8 years.
- Cost implications:
  - Espinoza and Presbitero (2022) evidence: a 10 percent extension in the project timeline translates into a 5 percent increase in project costs.
  - Donor estimates: project costs increased by at least 25 percent relative to initial costs due to project implementation delays in Cameroon.
  - Staff estimates based on the sample:
    - Additional fees and opportunity costs around CFAF 123 billion.
    - This corresponds to around 0.4 percent of GDP and 16.3 percent of external debt service in 2022.
    - A single water-sector project profile in Yaoundé: estimated budget revenue loss of about CFAF 6.2 billion annually, which corresponds to about a third of the national cash transfer budget (filets sociaux).
  - The estimates exclude other costs such as inflation impacts on input costs, administrative and legal costs, and unrealized economic benefits.
- Social and environmental costs:
  - Delays in roads, energy systems, and ports may jeopardize industrial development and foreign investment.
  - Delays in health, education, and sanitation projects may worsen inequality and poverty.
  - Delays in resilient infrastructure and renewable energy projects can increase vulnerability to disasters and hinder climate mitigation and adaptation goals.

### Identified causes of delays
- Project preparation and management weaknesses across all stages (PIMA, 2020), including poor planning, inadequate resource allocation, and lack of coordination and monitoring.
- Inclusion in the budget of projects not fully prepared or properly costed; failure to consider connections to existing networks during preparation (World Bank, 2018).
- Annual-only budget commitment practice:
  - Budget commitments and associated allocations are only planned annually, leading to underbudgeting for multi-year projects and lack of clear procedures for carrying over budget allocations.
- Public procurement delays and contract management:
  - Average time for awarding contracts: 255 days.
  - Numerous contracts exceed authorized amounts, leading to concentration of public investment spending in the last months of the year, cash constraints, delays in implementation, and higher costs.
- Cash management weaknesses:
  - Governance-related cash constraints where spending through exceptional procedures crowds out budgeted expenditures.
  - 2023: public investment spending execution was about 80 percent relative to the budgeted amount, or about CFAF 260 billion lower.
  - Weaknesses in management of Treasury correspondent accounts (which include cash balances of extrabudgetary units and local government entities) hinder capital spending execution.
- Additional administrative and contextual obstacles:
  - Complexities and stringent documentation requirements associated with international donor financing; lengthy approval timelines and compliance with varied regulatory frameworks and standards.
  - Long administrative delays between project approval, loan agreement signature, and effective date.
  - Weak capacity of staff in project management units.
  - Slow land acquisition and resettlement processes.
  - The pandemic and growing security challenges in conflict-affected regions have also slowed project implementation.

### Policy recommendations and reform priorities
- Sustain reforms in PIM and PFM to reduce delays and improve efficiency in public investment implementation.
- Leverage technical assistance to improve public investment efficiency, PFM, and budget execution.
- Specific reform measures noted as ongoing or recommended:
  - Strengthen the framework for project preparation (maturation des projets).
  - Phase out common chapters and improve consistency between budget commitments and budget credit for large multi-year projects.
  - Limit spending through exceptional procedures to protect the budget space for investment spending.
  - Strengthen coordination and align project preparation and management standards with creditor processes and standards.
  - Integrate climate considerations into PIM to align the investment portfolio with the national climate agenda and mitigate environmental risks.

*Source: Excerpt from 1cmrea2025001-print-pdf (IMF staff report chapter and Annex V).*

### 1. Supplementary Memorandum of Economic and Financial Policies

### 1. Supplementary Memorandum of Economic and Financial Policies

### Introduction
- SND-30 (National Development Strategy for 2020–2030) guides strategic priorities to regain strong, sustained, and inclusive economic growth and accelerate Cameroon's march towards economic and social emergence.
- Policy priorities: strengthen macroeconomic stability, structural transformation via significant investments in priority sectors, fiscal sustainability, and resilience against external shocks and climate change.

### Recent economic developments
- Real GDP growth:
  - 3.7 percent in 2022.
  - 3.2 percent in 2023 (slowed due to supply chain disruptions, rising production costs, electricity shortages, and floods).
  - 3.6 percent year-on-year in H1 2024, driven by services, agriculture, livestock, and manufacturing.
- Inflation:
  - 4.5 percent in December 2024 (average of the last 12 months), down from 7.4 percent for the same period a year ago.
- Trade balance and external sector:
  - Trade deficit January–August 2024: CFAF 1,320 billion (narrower by CFAF 193 billion versus same period last year).
  - Export values up by 3.7 percent, driven by cocoa and cotton; offset lower hydrocarbon and timber exports.
  - Imports declined 3.7 percent due to lower oil and some food product prices and import-substitution policy.
- Budget execution and public debt:
  - End-September 2024: non-oil revenue performance in line with forecasts; expenditure lower than expected due to slower public investment execution.
  - Public debt-to-GDP: almost 47.2 percent at end-2021 → about 43.2 percent at end-2023; continued downward trend in first two quarters of 2024.
- Banking sector soundness:
  - Solvency ratio: 10.7 percent (2020) → 15.3 percent at end-2023.
  - NPLs share: 13 percent as of July 2024.
  - Banks' sovereign exposure (including SOEs): around 27 percent in 2019 → 37 percent of total assets in December 2023.

### Implementation of the economic and financial program
- Program performance (end-June, end-September, end-December 2024):
  - End-June: Four quantitative performance criteria (QPCs) and four of six indicative targets (ITs) met; two ITs missed (ceiling on net accumulation of domestic payment arrears; ceiling on SNH direct interventions).
  - End-September: Seven of nine ITs met; ceiling on net accumulation of domestic payment arrears missed marginally by CFAF 19 billion; ceiling on SNH direct interventions missed.
  - End-December: Two QPCs met; information on remaining two QPCs not yet available. All three continuous QPCs met.
- Structural benchmarks (SBs) progress:
  - Met on schedule (three of nine SBs due for current review):
    - SB4 (November 2024): List of 25 largest public companies published on MINFI website with links to audited financial statements of 11 companies.
    - SB5 (November 2024): Dataset of wages and salaries created for PIT simulations.
    - SB6 (November 2024): Annex included in 2025 budget on commitment authorizations (CAs) and payment appropriations (PAs) compliant with MTBF and investment project timetable.
  - Implemented after deadline (three SBs):
    - SB1 (June 2024): Draft implementation texts of the 2016 Mining Code finalized and published in January 2025.
    - SB3 (November 2024): Decree adopted in February 2025 specifying rules for managing budgetary authorizations and limiting common chapters to 10 percent of the budget.
    - SB8 (December 2024): Minister of Finance issued instruction to strengthen management of correspondent accounts, closure of illegal accounts, clearance of arrears, and cash management rules in January 2025.
  - SBs proposed for reset to April 2025:
    - SB2 (November 2024): Key revisions to the 2013 Law on investment incentives identified; adoption expected by end-April 2025.
    - SB10 (November 2024): One bank recapitalized to meet 8 percent capital adequacy; recapitalization of second bank delayed.
  - SB9 (June 2024) on SONARA restructuring study not completed; new SB proposed (SB11) requiring submission of an interim report by May 15, 2025 (prior action: contract with firm selected to be sent to IMF staff ahead of completion of review).

### Macroeconomic framework and outlook (A)
- Growth outlook:
  - Growth expected to accelerate from 3.2 percent in 2023 to nearly 4 percent in 2004 and 2025. (Text states "2004 and 2025" — preserved as in source.)
  - Medium-term: structural transformation under SND-30 expected to yield real GDP growth above 4.5 percent, driven mainly by non-oil sector.
- Inflation outlook:
  - Temporarily above BEAC target in near term, then returning to below 3 percent in the medium term, consistent with CEMAC convergence criterion.
- External outlook:
  - Current account deficit expected to decline from 4.1 percent of GDP in 2023 to 3.4 percent of GDP in 2024, driven by cocoa and cotton exports.
  - Medium-term current account (including grants) expected to be between 3 percent and 4 percent of GDP, supported by non-oil exports, FDI inflows, and regional integration.
  - Import-substitution policy could improve current account performance.
- Risks: geopolitical tensions, global supply chain disruption, commodity and financial market volatility, natural disasters recurrence, and insecurity in Northwest, Southwest, and Far North.

### Building fiscal resilience (B)
- Fiscal targets and strategy:
  - Gradual reduction of non-oil primary deficit: 2.5 percent of GDP in 2023 → 2 percent of GDP in 2024 → 1.3 percent of GDP in 2025.
  - Policies: increase non-oil revenues, rationalize expenditure, limit Treasury advances and exceptional procedures, create fiscal space for infrastructure and social spending aligned with SND-30.
  - Contingency measures: reduce non-priority expenditures if revenue shortfalls occur.
- Mobilizing domestic non-oil revenues:
  - Non-oil revenues trajectory: 11.4 percent of GDP in 2020 → projected 13.2 percent of GDP in 2024 → aim for 13.5 percent of GDP in 2025.
  - Tax and customs modernization: three-year plan to strengthen tax and customs administrations.
  - Domestic tax measures:
    - Strengthen environmental taxation (mining sector).
    - Extend withholding tax on non-commercial income to remuneration paid to individual consultants.
    - Optimize airport stamp duty (DTA) yield by setting specific rate for premium class; clarify collection procedures for charter flights.
  - International tax measures: implement voluntary disclosure, automatic exchange of information, and country-by-country reporting standards.
  - Tax administration reforms:
    - Reorganize Large Business Directorate (DGE) and CIME Bonanjo to secure collection of at least 80 percent of domestic tax revenues.
    - Finalize electronic monitoring systems for production and gambling companies; implement electronic invoicing.
    - Use data collection, processing, and risk analysis to improve audit targeting and individualized monitoring of tax claims.
    - Expected revenue gains from reforms: about CFAF 68 billion.
    - Plan to undergo second TADAT assessment in H1 2025.
- Customs administration focus (DGD):
  - Improve spontaneous revenues via better control of tax base (interconnection with stevedores, ship agents, airlines; Advanced Cargo Information; Draft Survey; automated access to original manifest data).
  - Intensify controls through data exchange and exploitation with ANIF, BEAC, APECCAM, financial institutions; digitalize controls via automated matching with SGS, CNSC, and banks.
  - Strengthen collection strategy targeting marketers, SONARA, and public entities; require payment of customs duties/taxes at the gate for petroleum products when economic conditions allow.
  - For exports: update administrative amounts on certain products (wood, cocoa beans) and improve interconnection between CAMCIS and SIGIF2.
- Personal income tax (PIT) reform:
  - Use new wages and salaries database (SB5, November 2024) to simulate impact of proposed reforms.
  - Expected publication of simulation results by end 2025.
- Corporate taxation and investment incentives:
  - SB2 (revision of Law No. 2013/004 on investment incentives) not met; proposed reset to April 2025.
  - Plan to adopt tax and customs incentives to promote import-substitution, improve targeting of strategic growth sectors, streamline incentives, simplify access/withdrawal procedures, and establish monitoring and assessment mechanisms.
- Fuel subsidy reform and social protection:
  - Domestic fuel price increases implemented in February 2023 and February 2024.
  - Commitment to eliminate fuel subsidies and design timeline for automatic fuel price adjustment mechanism in medium term.
  - Reform to be accompanied by mitigation measures for economic and social impacts and a communication strategy to explain long-term benefits.
- Public financial management (PFM) reforms:
  - PEFA review published December 2023; public finance review completed with World Bank support.
  - Strategic Plan for PFM Reforms 2024–2026 validated October 2024 with nine priorities, including a priority dedicated to gender and climate issues and another to information systems.
  - Reduction in Treasury advances: CFAF 369 billion in 2023 → CFAF 35 billion by end-June 2024; use of Treasury advances to be limited to extreme urgency and regularized monthly.
  - Reform of common chapters:
    - Phase 1: reduction of common chapters to 10 percent of 2025 national budget (SB3, November 2024).
    - Phase 2: transform them into allocation for accidental and unforeseeable expenses in 2026 Finance Bill.
    - Phase 3: limit these allocations to 5 percent in 2026 Finance Bill.
    - Prime ministerial decree adopted in February 2025 to manage budgetary authorizations and transfers for accidental and unforeseeable expenses.
- Clearing domestic payment obligations:
  - External financing contracted: about CFAF 442 billion (Afreximbank January 2024 and private investors July 2024).
  - Financing enabled clearance of about CFAF 514 billion domestic payment obligations accumulated at end-2023.
  - New domestic obligations accumulated since beginning of 2024: around CFAF 287 billion.
  - New accumulations attributed to increased SNH direct interventions and persisting PFM weaknesses.
  - Debt operation proceeds deposited in an escrow account at the BEAC.

*Attachment I. Supplementary Memorandum of Economic and Financial Policies in 2024-25, February 2025*

### 24.      We are undertaking structural reforms to prevent further domestic arrears

### 24.      We are undertaking structural reforms to prevent further domestic arrears accumulation

### Reforms to prevent domestic arrears and improve cash management
- Prepare comprehensive and realistic public procurement plans (with MINMAP) to develop commitment plans consistent with monthly cash flow plans (SB7, May 2025).
- Cap waiting times on payments to suppliers to less than 90 days from the expenditure authorization date and limit excessive year-end commitments.
- DGTCFM preparing an issuances schedule to improve cash management and limit settlement of unpaid obligations to a maximum of 90 days.
- Audit of correspondent accounts completed; Minister of Finance issued an instruction to strengthen management, including closure of illegal accounts, clearance of existing arrears, and enforcement of cash management rules consistent with the annual budget law (SB8, December 2024).
- Going forward: comprehensive audit of correspondent accounts annually; any identified illegal accounts will be closed within 2 months.

### Public investment execution and public procurement practices
- Public investment programming emphasis on years N+1 and N+2; implement PIMA recommendations on maturation, selection, programming, and execution of projects.
- Finalize and apply implementing texts of Order No. 11/CM/CAB/PM of October 6, 2023, on performance of project management units (PMUs).
- LF2025 includes an annex outlining management of commitment authorizations and payment appropriations to better manage multi-year investment projects (SB6, November 2024).
- Expand Cameroon’s Online E-Procurement System (COLEPS) from 11 to 24 ministries.
- Total value of contracts awarded by ministries using COLEPS is currently 85 percent in 2024 as of end-September 2024; target at least 90 percent coverage by May 2025.
- Pridesoft monitoring system (ARMP) feeds into public procurement evaluation reports produced by MINMAP and included in quarterly budget implementation reviews (performance statistics: number, proportion or rate and monetary value), with summary tables.
- Monitoring periodicity currently every six months depending on resources; phase 2 digitalization of COLEPS could enable quarterly periodicity.
- Imminent interoperability of COLEPS and Pridesoft to cross-reference data/indicators (programming, publication, procurement, and execution).
- Engage development partners to identify bottlenecks and reduce procurement timelines affecting public investment project implementation.

### Civil service pension system
- IMF TA mission reviewed the civil service pension system in August 2024.
- Plan to conduct an actuarial study of the pension scheme by end-December 2024 to reduce quasi-fiscal risks based on TA recommendations.

### Managing fiscal risks — SONARA and energy sector
- Prepare in-depth technical-economic and financial feasibility study on option 3 (refinery with a hydrocracking unit) validated by the President; accompanied by plans and design of the new refinery (SB9, June 2024).
- Competitive bidding abandoned; new restricted invitation to tender launched to reduce cost; commit to finalizing tender process and signing contract with a firm ahead of completion of this review (prior action).
- Share terms of reference of invitation to tender with IMF staff; interim study report to be shared with IMF staff by May 15, 2025 (proposed new SB11).
- Commitment to finalize and implement the SONARA restructuring study by end-2025.
- Nachtigal dam power generation and transmission project: three of the seven turbines are already operational; plant connected to the southern grid.
- LF2025 includes sufficient resources to cover near-term increase in energy-related spending linked to Nachtigal and broader sector commitments.
- Use Program for Results framework with World Bank and African Development Bank to upgrade investment and progressively ensure full contribution of energy sector while reducing fiscal risks.
- Government in discussions with ACTIS to acquire its majority shareholding stake in ENEO; fiscal cost will be transparently reflected in the budget.
- Medium-term intention, following the Sanaga basin optimization study with World Bank support, to develop significant hydroelectric potential with private sector heavily involved.

### State ownership, recapitalization, and public companies (SNI)
- National Investment Corporation of Cameroon (SNI) transformed into a publicly owned company; will monitor public companies and be an investor for the State.
- SNI responsibilities: restructuring and recapitalization of state-owned enterprises; analyze performance, execute performance contracts, determine taxes and contributions, collect data and develop an information system for monitoring and dissemination of SOE financial reports.
- Decree provided for increase in SNI share capital of CFAF 200 billion.
- Increase to be financed by the national budget at CFAF 50 billion a year from 2025.
- Develop and publish strategy for restructuring, recapitalization, and monitoring of state-enterprises to enhance transparency, efficiency, and competitiveness.

### Settlement of cross-debts in the public sector
- Inventory of debts between the state and public enterprises as of end-2020 completed; plan adopted for their clearance.
- Inventory established asymmetries in mutual debts reported by SOEs.
- Working to reconcile financial information and preparing an action plan by May 2025 with concerted solutions to settle cross-debts.
- Monitoring 180 active projects closely to reduce non-performing SENDs and, if necessary, reallocate unused funds.
- Stock of SENDs was CFAF 3,756.3 billion at end-2023.
- Plan to review projects to close obsolete ones and ensure counterpart funds are budgeted according to project timetables.
- Seek IMF capacity development to better define perimeter of and fiscal risks from government debt to strengthen realism of the budget, improve cash management, and lower financing costs over time.
- Debt management operation in 2024 included a US$ 550 million international private placement in July; amount used for clearance of domestic payment obligations.
- Plan to replace planned regional long-term government bond issuance with external financing in 2025 due to tight regional market financing conditions.

### Strengthening financial sector resilience and financial inclusion
- Commit to complying with regulations to preserve stability of the monetary union and banking system; support BEAC achieving adequate foreign exchange reserves and enforce foreign exchange regulations under national authority.
- Strengthen resilience of banking sector, including compliance with prudential standards and implementation of COBAC recommendations.
- COBAC approved recapitalization of two troubled banks (SB10, November 2024, reprogrammed to April 2025); one bank complied with 8 percent capital adequacy ratio; efforts underway to complete recapitalization of the other bank.
- Privatization of Commercial Bank Cameroon ongoing; international tender launched to sell 51 percent of shares to a strategic investor and plan to list an additional 30 percent on the Central Africa Stock Exchange.
- Commit to resolving insolvent banks and deepening interbank and secondary market for government bonds to improve banking sector liquidity.
- Adopted Financial Sector Development Strategy; aim to improve access to credit for SMEs.
- Rate of NPLs for the economy remains high: 13 percent in July 2024.
- Measures to reduce NPLs and restore confidence:
  - Establish credit registry, balance sheet registry and rating system with BEAC.
  - Digitalize land registry to enable a registry of land titles.
  - Continue training judges in commercial cases.
  - Implement government guarantee fund for SMEs in the medium term.
- Government guarantee agreement for SME portfolios worth CFAF 200 billion, renewable each year; working on operation of this guarantee.
- Work with tax administration, COBAC and APECCAM to agree guidelines for cancellation of fully provisioned uncollectible NPLs.
- Banks' exposure to sovereigns: Cameroonian banks hold 37 percent at end-2023 of the subregion's sovereign bonds in their portfolios; liquidity of these securities a problem for some banks.
- Work to develop secondary market for government securities with BEAC to improve liquidity and attract foreign investors; increase public financial education to encourage use of treasury securities as savings instruments.
- Strengthen governance and transparency at Debt Collection Corporation (SRC); define automatic sunset clause for asset recovery and develop activities including recovery of illicit funds seized abroad; ensure SRC has sufficient resources.
- Define terms of reference for the Deposit and Consignment Fund (CDEC) and work on operationalization; report on joint work on operationalization to be shared with IMF staff by end-March 2025.
- National financial inclusion strategy finalized February 2023 with action plan 2023-2027; priorities include: (i) improving quality, availability, and accessibility of financial products and services; (ii) facilitating access to finance for agricultural and agri-food value chains and MSMEs; (iii) promoting innovation and digital finance; (iv) promotion and development of Islamic finance; (v) promoting financial education and consumer protection; and (vi) improving regulatory and fiscal framework.

### Strengthening governance, financial integrity, and anti-corruption
- Develop an action plan to address key recommendations of the governance diagnostic report; priority to align anti-corruption framework with international standards and bring national legal framework into compliance with the United Nations Convention Against Corruption, including criminalization of illicit enrichment.
- IMF assistance available if needed to find legally robust solutions based on good international and regional practices.
- Continue improving management and transparency of SOEs and strengthening PFM framework; reduce common budget chapters and extraordinary expenditures; audit of correspondent accounts (see ¶ 20-24).
- Implement steps to regain full EITI membership and exit FATF grey list.
- Management and transparency of SOEs: MINFI website published hyperlinks to audited annual financial statements of 25 largest public companies on November 29, 2024 (SB4, November 2024).
- New performance contracts require preventive anti-corruption measures (codes of conduct and ethics); diagnostic report on governance of public enterprises finalized to support strengthened technical and financial supervision and a clear shareholder policy.
- Performance contracts initiated with three SOEs: PAD, CAMAIR Co, and CICAM.
- Work to lift EITI suspension:
  - Publish implementing texts of new Mining Code (SB1, June 2024) in January 2025 and finalize appointments of EITI committee including civil society members in September 2024.
  - Create register of beneficial owners at General Directorate of Taxes (MINFI) with access for several public entities including EITI Committee.
  - Adopt 2024-26 work plan to implement corrective measures and strategic recommendations from the Cameroon 2023 Validation Report and align with 2023 EITI standards.
  - Adopt implementing texts of code of transparency and good governance in public finance management; publish production-sharing agreements in the extractive sector; regularize Permanent Secretariat staff contracts and amend draft Code of Financial Jurisdictions.
  - Revamp multistakeholder group to ensure civil society participation through open public call for nominations, public consultations, and transparent vetting.
- Continue to receive technical, logistical, and financial support of development partners for these reforms.

*Source: 1cmrea2025001-print-pdf - 24.      We are undertaking structural reforms to prevent further domestic arrears accumulation*

### 43.      We continue to work with the FATF and GABAC to implement an action plan with a

### 1cmrea2025001-print-pdf - 43.      We continue to work with the FATF and GABAC to implement an action plan with a

### AML/CFT actions, outcomes, and commitments
- Established a National AML/CFT Policy Coordination Committee (within the MINFI) following the mutual evaluation report of GABAC and inclusion on the FATF “grey list.”
- Tangible results from investigations and institutional strengthening:
  - Increased the Financial Intelligence Unit resources and strengthened capacities of investigative authorities and judicial bodies to effectively prosecute money laundering and terrorist financing (ML/FT) cases.
  - The Directorate-General of Taxes adopted a decree requiring companies to submit information on their beneficial owners in their annual returns.
  - The Directorate-General of Customs signed Memoranda of Understanding with ANIF and BEAC to set up a platform for data exchange and exploitation, aiming to control suspicious financial flows.
  - Introduced the application of sanctions since 2023.
- Commitments to further reforms (action-plan alignment):
  - (i) Align national AML/CFT policies/strategies with the findings of the national risk assessment.
  - (ii) Improve the accessibility and availability of adequate, accurate, and up-to -date beneficial ownership information.
  - (iii) Improve AML/CFT supervision of financial institutions and Designated Non-Financial Businesses And Professions (DNFBPs).
  - (iv) Step up efforts to combat money laundering and terrorist financing based on the country's risks.
- Technical support: Received IMF technical support to improve AML/CFT regulation and supervision of DNFBPs.

### Addressing climate vulnerabilities and disaster risk financing
- Rationale and objectives:
  - Recent devastating floods in the North and Far North regions underscore urgency to develop and operationalize a disaster risk financing strategy.
  - Cameroon intends to honor commitments in its Nationally Determined Contributions (NDC) and transform climate constraint into a development opportunity aligned with the SND-30.
  - Aim to strengthen institutional capacity, integrate climate commitments into an adequate legal framework, and support adaptation and mitigation policies in line with the 2021 NDC and the National Climate Change Adaptation Plan.
  - Emphasis on encouraging Communal or Regional Adaptation Plans and updating the NDC 2026 as per the Paris Agreement.
- Implemented reform measures for the second review under the RSF arrangement:
  - MINEPAT finalized a methodology for ex-ante evaluation of investment projects, including guidelines for climate change adaptation and mitigation, integrated into a project maturation guide (RM4, October 2024). Finalized in January 2025.
  - Revised Law on Civil Protection adopted by Parliament in December 2024; update of the decree on the creation, organization, and operation of the National Risk Observatory (ONR) achieved in February 2025 (RM6, October 2024).
- Ongoing and planned measures (with timelines and support):
  - RM2: Following IMF technical assistance mission in September 2024 on the National Climate Plan (NCP), a workplan prepared (RM2, April 2025). A memorandum of understanding on NCP development was signed with GloH2O in October 2024. Negotiations underway with GGGI for long-term support. Two sessions of the National Committee for the Facilitation of the Climate Agenda scheduled before April 2025. A first draft of the NCP will be shared with development partners in February 2025.
  - RM7: Drafting a Disaster Risk Financing Strategy after IMF technical assistance; strategy identifies roles, responsibilities, and measures to strengthen national resilience to disasters (RM7, April 2025). The Disaster Risk Financing Strategy will be shared in February 2025.
  - RM5: Started work on draft revision of the 2018 decree on the project maturation process to integrate climate considerations into each phase of the investment project cycle (RM5, April 2025).
  - RM8: Second phase deployment of SIGIF2 started with Exports, Control, and Traceability modules. All modules of SIFIF2 will be operational in [March] 2025 and procedures for annual evaluation established. Technical discussions between MINFOF and MINFI to integrate SIGIF2 into tax and customs infrastructure; a timetable for interconnection is being drawn up (RM8, April 2025).

### Program modalities, monitoring, and timing
- Authorities request IMF Executive Board approval to modify indicative targets for end-March 2025 to reflect updated macroeconomic framework and fiscal projections.
- Authorities request a waiver of applicability for two end-December 2024 QPCs due to unavailable data at time of Board meeting.
- Commitment to meet targets and criteria presented in Tables 1, 2 and 3 of the memorandum and the attached Technical Memorandum of Understanding (TMU).
- Monitoring: Program will be monitored at semiannual reviews using the performance criteria, indicative targets, structural benchmarks and reform measures defined in Tables 1–3 and the TMU.
- Timing: The eighth review based on end-December 2024 targets is expected to be completed from June 3, 2025.

### Selected reform timelines, targets, and compliance-related numbers (as stated)
- Introduced sanctions since 2023.
- MINEPAT finalized ex-ante evaluation methodology: January 2025 (RM4, October 2024).
- Revised Civil Protection Law adopted: December 2024; ONR decree update: February 2025 (RM6, October 2024).
- NCP workplan and RM2 target: April 2025; first NCP draft to be shared: February 2025.
- Disaster Risk Financing Strategy drafting and RM7 target: April 2025; strategy to be shared: February 2025.
- Revision of project maturation decree (RM5) target: April 2025.
- SIGIF2 modules operational target: [March] 2025; RM8 target date: April 2025.
- One bank recapitalized consistent with the 8 percent capital adequacy ratio (status reported in structural benchmarks).
- Eighth review expected to be completed from June 3, 2025.
- Final test date of the current ECF and EFF arrangements is December 2024 (as noted in table footnotes).

### Prior actions and structural benchmarks (high-level status)
- Prior actions completed: Submission to Parliament of the 2025 Budget Law (Met); signing contract for SONARA study (terms of reference and signed contract submitted to IMF).
- Structural benchmarks: Multiple items with varied statuses (Met; Not met; Not met, implemented with delay; Proposed to be reset). Selected examples:
  - Finalize and publish implementation texts of the 2016 Mining Code: Due June-24 — Not met, implemented with delay.
  - Revise Law No. 2013/004 to rationalize incentives: Due Nov. 24 — Not met.
  - Publish list of the 25 largest public companies with audited statements: Due Nov. 24 — Met.
  - Create dataset of wages and salaries for PIT simulation: Due Nov. 24 — Met.
  - Recapitalize two undercapitalized banks to comply with the 8 percent capital adequacy ratio: Due Nov. 24 — Not met; one bank recapitalized and proposed to reset to Apr. 25.

*Source: 1cmrea2025001-print-pdf*

### 1. This Technical Memorandum of Understanding (TMU) defines the quantitative

### Technical Memorandum of Understanding (TMU) — quantitative performance criteria and reporting framework

### Conditionality
- Quantitative performance criteria and indicative objectives until end-March 2025 are provided in Table 1 of the Memorandum of Economic and Financial Policies (MEFP) attached to the Letter of Intent.
- Structural benchmarks and reform measures are provided in Table 2 and Table 3 of the MEFP.

### Definitions — scope and institutional coverage
- Government:
  - Defined as the central government of the Republic of Cameroon, including all implementing agencies, institutions, and any organizations receiving special public funds, as per GFSM 2001, paragraphs 2.48–50.
  - Excludes local governments, the Central Bank, or any other public entity or entity belonging to the government that has autonomous legal status and whose operations are not included in the table of government financial operations (TOFE).
- Nonfinancial public enterprise:
  - Commercial or industrial unit, fully or partially owned by the central government, selling goods and services to the public on a large scale.
  - Since June 2017, all operations between the government and these public enterprises should be treated on a gross basis in the TOFE.

### Revenue — definitions and accounting treatment
- Total government resources comprise tax and nontax fiscal revenue (as defined in Chapter 5 of GFSM 2001) and grants; recorded on a cash basis.
- Proceeds from sale of assets and revenue from privatizations are not considered government revenue.
- Oil revenue:
  - Defined as the total transferable balance of the Société Nationale des Hydrocarbures (SNH) and income tax on oil companies and gas operators.
  - Recorded on a cash basis.
  - Authorities will notify IMF staff of any tax-system changes affecting revenue flows.
- Non-oil revenue:
  - Includes all government (tax and nontax) revenue excluding oil revenue.
  - Value-added tax (VAT) is recorded net of VAT refunds.
  - Pipeline fees paid by the Cameroon Oil Transportation Company (COTCO) are recorded under nontax revenue.
- Privatization revenue:
  - Includes funds paid to the government in connection with sale or transfer of management of a public enterprise (concession), agency, or facility; sale of shares held by the government in private companies or public enterprises.
  - Must be recorded on a gross basis; costs involved in sales or concessions must be recorded separately under expenditure.

### Expenditure — components and special treatments
- Total government expenditure and net lending include:
  - Wage and salary expenditure for civil servants, goods and services, transfers (including subsidies, grants, social security benefits, and other outlays), interest payments, and capital expenditure.
  - Recorded on payment order basis unless otherwise indicated, and net lending (defined in GFSM 2001).
  - Includes expenditure carried out without prior payment authorization and pending regularization.
- Direct interventions by SNH:
  - Included in government expenditure.
  - Include emergency payments by SNH on behalf of the government, substantially to cover exceptional sovereignty and security outlays.
- Social expenditure includes:
  - Education: total expenditure (current and capital) of the Ministries (Basic Education, Secondary Education, and Employment and Vocational Training).
  - Health: current and capital expenditure of the Ministry of Public Health, including COVID-19 related expenditures.
  - Other social sectors: current and capital expenditure of the Ministries of Labor and Social Security, Youth and Civic Education, Social Affairs, and Promotion of Women and Family.
  - Administered price subsidies (fuel at the pump, electricity to households), gas subsidy, and expenditures for the Social Safety Net Program.

### Balance and financing — key definitions
- Primary balance:
  - Difference between total government revenue (paragraph 5) and total government expenditure and net lending (paragraph 9) not including interest payments on external and domestic debt.
- Debt:
  - Definition follows paragraph 8(a) of the Guidelines on Public Debt Limits in Fund-Supported Programs (Executive Board Decision 16919– (20/103) adopted on October 28, 2020), and includes commitments contracted or guaranteed for which values have not been received.
  - "Debt" means a current liability created under a contractual arrangement through provision of value to be discharged by principal and/or interest payments; arrears, penalties, and judicially awarded damages arising from failure to pay under contractual obligations that constitute debt are debt.
- External debt:
  - Any borrowing or debt service in a currency other than the CFA franc.
  - Applies to debt between CEMAC countries and debt from BDEAC.
  - Relevant performance criteria apply to external debt of the government, public enterprises receiving government transfers, other public entities where government holds >50 percent of capital, and private debt guaranteed by the government.
  - Guaranteed debt: any explicit legal obligation for the government to reimburse a debt in the event of payment default by the debtor.
- Concessional external debt:
  - Considered concessional if it comprises a grant component of at least 35 percent.
  - The grant component is the difference between the face value and the present value (PV) expressed as a percentage of the face value.
  - PV at the date the debt is contractually arranged is calculated by discounting debt service payments at the date arranged.
  - A discount rate of 5 percent is used.
- Domestic debt:
  - All government debts and obligations denominated in CFA francs, including unreimbursed balances, advances from the Bank of Central African States, Treasury bills and bonds, structured debt, domestic payment arrears, and SONARA’s domestic debt.
- Structured debt:
  - Debt that has been subject to a formal agreement or securitization.
  - Structured bank debt: all claims of local banks on government, except Treasury bills and bonds.
  - Structured non-bank debt: government balances payable to local non-bank institutions, individuals, or CEMAC that have been securitized or subject to a formal reimbursement agreement.
- Net domestic financing of the government:
  - Sum of (i) net bank credit to the government; and (ii) net non-bank financing.
  - Net bank credit:
    - Change in balance between government commitments and assets with the national banking system.
    - Assets include: (i) Treasury’s cash resources on hand; (ii) Treasury deposits with the Central Bank, not including the HIPC account and the C2D account; and (iii) the credit balance of the accounts of the Caisse Autonome d'Amortissement (CAA) with commercial banks earmarked for reimbursement of the government's debt obligations.
    - Commitments include: (i) financing from the Central Bank; net IMF financing (disbursements net of reimbursements), refinancing of guaranteed bonds, and Treasury paper held by the Central Bank; and (ii) financing from commercial banks (loans, direct advances) and Treasury securities held by local banks.
    - Net bank credit is calculated based on BEAC data and subject to monthly reconciliation between the Treasury and the BEAC.
  - Net non-bank financing includes:
    - Change in outstanding balance of government securities (Treasury bills and bonds) issued in CFA francs on the regional financial market and not held by the local banking system.
    - Change in outstanding balance of structured non-bank domestic debt.
    - Privatization revenue.
    - Change in the balance of correspondent bank accounts (including Account 42) and consignment accounts.
    - Change in the balance of outstanding claims on government abandoned by the private sector.
    - The government’s net non-bank financing is calculated by the public treasury.

### Arrears and advances — definitions and measurement
- Domestic payment arrears comprise:
  - Payment arrears on expenditure: "balances payable" with payment lag exceeding 90 days; balances payable under 90 days represent payments in progress; treasury will monitor monthly.
  - Payment arrears on structured domestic debt: difference between amount due under domestic debt arrangement or matured Treasury securities and amount effectively paid after payment deadline or maturity.
  - Unstructured debt:
    - Unstructured debt of the CAA: balances payable and liabilities transferred to the CAA not subject to reimbursement or securitization agreement. Stock of unstructured debt estimated at CFAF 53 billion at end-December 2023.
    - Domestic "floating" debt: government commitments for which a service was provided but not subject to any budget commitment (invoices payable and not settled to public and private enterprises), excluding tax debt from debt offsetting with public enterprises and execution of externally financed public procurement agreements not covered by the budget due to insufficient appropriations.
    - Directorate General of Budget will conduct monthly assessment of these commitments with the public treasury.
- External payment arrears:
  - External debt obligations of the government (principal and interest) not paid 30 days after due date specified in agreement, taking into account any contractual grace periods.
  - Excludes payment arrears on external financial obligations subject to rescheduling.
- Treasury advances:
  - Payments made by the Treasury in the absence of a commitment or payment order issued by the General Directorate of Budget (DGB) and regularized retroactively.

### Quantitative program objectives — general assessment rules and reporting
- Quantitative targets (QTs) are specified in Table 1 of the MEFP and, unless otherwise indicated, assessed on a cumulative basis from the beginning of the calendar year to which they apply.
- Detailed data reporting:
  - Monthly submission within six weeks from end of month of detailed data on government financial operations indicating primary balance, oil revenue, and miscellaneous expenditure not otherwise classified, except end-December data.
  - End-year data on government financial operations to be submitted by March 15 of the following year (Cameroon’s Law No 2018/012 allows a complementary period of 30 days after the end of the calendar year).
  - Detailed data on net domestic financing (bank and non-bank) and status of budget support disbursements, reimbursement of external debt service, and external arrears submitted monthly within six weeks after end of month, except end-December data; end-year data submitted by March 15 of the following year.

A. Non-Oil Primary Balance
- Performance criterion:
  - Floor for the non-oil primary balance (based on payment order) is a quantitative objective in Table 1 of the MEFP.
  - Non-oil primary balance = primary balance (paragraph 12) minus oil revenue (paragraph 6).
- Data consistency rule:
  - Cumulative level of financing discrepancies in the TOFE (including errors and omissions) for a given month should not exceed 5 percent of the cumulative expenditure for that month, in absolute value.
  - If exceeded, a comprehensive reconciliation exercise for all TOFE source data will be undertaken in consultation with IMF staff.
- Adjustment:
  - Floor for the non-oil primary balance will be adjusted starting from end-June 2024 by the amount of budget spending for the recapitalization of the two undercapitalized banks to comply with the 8 percent capital adequacy ratio.
- Cutoff dates for reporting:
  - Monthly within six weeks from the end of the month, except end-December data submitted by March 15 of the following year.

B. Net Domestic Financing of the Government Excluding Net IMF Financing
- Performance criterion:
  - Ceiling on net domestic financing of the government excluding net IMF financing is a quantitative objective in Table 1 of the MEFP.
  - For program requirements, this equals net domestic financing defined in paragraph 16, not including net IMF financing.
- Treatment of IMF financing:
  - Ceiling excludes IMF financing related to disbursements under ECF-EFF arrangements and RSF arrangement.
- Adjustments:
  - Ceiling adjusted if (i) disbursements in connection with external budget support net of external debt service and payment of external arrears, and (ii) rescheduling of bilateral external debt service are lower than program forecasts.
  - End-of-quarter adjustments for budget support shortfalls/excesses: relevant quarterly ceilings adjusted upward (downward) commensurately, within the limit of CFAF 120 billion for each quarter of 2024 and March 2025. Ceiling may be reviewed depending on budget aid disbursement rate during the year.
  - End-of-quarter adjustments for bilateral debt rescheduling shortfalls/excesses: corresponding quarterly ceilings adjusted upward (downward) pro-tanto.
  - Starting from end-June 2024, relevant ceilings will be adjusted by the amount of budget spending for recapitalization of the two undercapitalized banks to comply with the 8 percent capital adequacy ratio.
- Cutoff dates for reporting:
  - Monthly within six weeks after the end of the month, except end-December data submitted by March 15 of the following year.

C. Disbursement of Non-Concessional External Debt
- Performance criterion:
  - Ceiling on disbursements of non-concessional external debt is a quantitative objective in Table 1 of the MEFP.
  - Applicable to debt contractually arranged to finance projects; uses external debt definition in paragraph 14 and concessionality concept in paragraph 15.
  - Exemption: debt contracted or disbursed under the debt management operation for clearance of domestic arrears is exempted, limited to the amount of new borrowing related to the debt management operation (CFAF 467 billion), and subject to demonstrating either an improvement in key liquidity and/or solvency debt burden indicators without adversely affecting the risk rating.

*Source: Technical Memorandum of Understanding (TMU) — Cameroon program (excerpt).*

### 31. In 2025, the ceiling will be adjusted upward to allow replacing planned domestic long-term

### 31. In 2025, the ceiling will be adjusted upward to allow replacing planned domestic long-term securities issuance (i.e., Treasury bonds) with external debt pro tanto by an amount not higher than CFAF 380 billion.

### External debt swap allowance (paragraphs 31, 47)
- In 2025, the external debt ceiling in PV terms will be adjusted upward to allow replacing planned domestic long-term securities issuance (i.e., Treasury bonds) with external debt pro tanto by an amount not higher than CFAF 380 billion.

### Cutoff dates for reporting related to external debt (paragraphs 32, 48)
- Detailed information on disbursements of external debt contracted by the government must be reported within six weeks after the end of the month, indicating the date on which the loans were signed and distinguishing between concessional and non-concessional loans.
- Detailed information on all loans (conditions and creditors) contracted by the government and guarantees issued by the government must be reported within six weeks after the end of the month. Any signing or guaranteeing of debt should be reported immediately to the Fund.

### Net claims of the Central Bank on the Central Government (paragraphs 33–38)
- The ceiling on net claims of the Central Bank on government is defined as the difference between:
  - Central Bank’s claims on government, excluding IMF financing (in particular unpaid balances of consolidated statutory advances, refinancing of guaranteed bonds, and Treasury securities held by the Central Bank); and
  - Cash and total deposits of the Treasury with the Central Bank, including the balance of the special account of unused statutory advances.
- The balance of the special account of unused statutory advances will be regularly monitored to maintain the objectives defined in Table 1 of the MEFP.
- The ceiling includes the agreed use of the 2021 SDR allocation.
- The ceiling excludes IMF financing related to disbursement under ECF-EFF arrangements and RSF arrangement.
- Quarterly adjustor for budget support shortfalls/excesses:
  - At the end of each quarter, if disbursements of external budget support are below (above) the programmed amounts, the relevant quarterly ceilings will be adjusted upward (downward) commensurately.
  - Adjustment limit: within the limit of CFAF 120 billion for each quarter of 2024 and March 2025. This ceiling may be reviewed depending on the rate of budget aid disbursements during the year.
- Starting from end-June 2024, ceilings will be adjusted by the amount of budget spending for the recapitalization of the two undercapitalized banks to comply with the 8 percent capital adequacy ratio.
- Reporting: BEAC must report detailed information on all financing from the Central Bank to the government and the statement on the balance of the special account of unused statutory advances within six weeks after the end of the month.

### Non-accumulation of external payment arrears (paragraphs 39–40)
- Performance criterion: ceiling of zero on the accumulation of new external payment arrears (continuous quantitative objective in Table 1 of the MEFP).
- Applies to accumulation of external arrears as defined in paragraph 20; government undertakes not to accumulate any external payment arrears on its debt, with the exception of arrears subject to rescheduling.
- Measured on a cumulative basis from program approval and monitored continuously.
- Reporting: data on balances, accumulation, and reimbursement of external arrears must be reported within six weeks after the end of each month; any new external arrears should be reported immediately to the Fund.

### Present value (PV) of external debt contracted or guaranteed (paragraphs 41–46, 42)
- Performance criterion: ceiling on the PV of new external debt contracted or guaranteed by the government and certain other public entities (applies to debt contracted or guaranteed for which value has not yet been received, including private debt with official guarantees).
- Coverage includes external debt as defined in paragraph 14 and contingent public liabilities as defined in paragraph 13, and debt contracted or guaranteed by:
  - (i) public enterprises defined in paragraph 4 that receive transfers from the government,
  - (ii) municipalities, and
  - (iii) agencies of general government including professional, scientific, and technical organizations.
- Exclusions: borrowing arranged in CFA francs, Treasury bills and bonds issued in CFA francs on the CEMAC regional market, regular short-term supplier loans, regular import credits, loans from the IMF, budget support loans from the World Bank, and debt relief or rescheduling.
- Exemption: New debt contracted or disbursed for debt management operation in the amount of CFAF 467 billion resulting in an improvement in the overall debt profile is exempt.
- PV calculation rules (paragraph 42):
  - PV at contracting = discounting of the future stream of payments of debt service due on the debt.
  - For debts with a grant element equal to or below zero, PV = nominal value.
  - Discount rate: unified discount rate of 5 percent set forth in Executive Board Decision No. 15248-(13/97).
  - PV of external debts in currencies other than the U.S. dollar will be calculated in U.S. dollar terms at program exchange rates as specified in TMU Text Table 1.
  - For variable-rate debt (benchmark + fixed spread), PV calculated using a program reference rate plus the fixed spread (in basis points) specified in the debt contract.
  - Program reference rate for the six-month USD SOFR: 0.04 percent (fixed for program duration).
  - Spreads:
    - six-month Euro EURIBOR over six-month USD SOFR: -56 basis points.
    - six-month JPY OIS over six-month USD SOFR: -8 basis points.
    - six-month GBP SONIA over six-month USD SOFR: 1 basis point.
    - For currencies other than Euro, JPY, and GBP, the spread over six-month USD SOFR is 15 basis points.
  - Where variable rate linked to a benchmark other than six-month USD SOFR, add spread reflecting difference between that benchmark and six-month USD SOFR (rounded to nearest 50 bps).
- Program exchange rates (Text Table 1):
  - US Dollar: CFA franc per currency unit 623.652; Currency units per US Dollar 1
  - Euro: CFA franc per currency unit 655.957; Currency units per US Dollar 0.9508
  - AfDB XUA: CFA franc per currency unit 820.595; Currency units per US Dollar 0.7600
  - STG Pound: CFA franc per currency unit 788.577; Currency units per US Dollar 0.7909
  - Japanese Yen: CFA franc per currency unit 4.079; Currency units per US Dollar 152.90
  - Chinese Yuan: CFA franc per currency unit 85.689; Currency units per US Dollar 7.2781
  - Source noted: IMF Representative Exchange Rates, December 13, 2024; African Development Bank December 2024 Exchange Rates; staff calculations.

### Adjustors to the PV external debt ceiling (paragraphs 43–46)
- Budget support adjustor:
  - An adjustor upward (downward) by the amount by which budget support exceeds (falls short of) the projected amounts.
  - Any adjustment capped to 10 percent of the external debt ceiling set in PV terms and must be consistent with maintaining debt sustainability.
- COVID-19 vaccine financing adjustor:
  - External debt ceiling in PV terms adjusted upward by the full amount in PV terms of any project financing dedicated to COVID-19 vaccine interventions that was not anticipated at the time of setting of the performance criterion.
  - Authorities will consult IMF staff on any planned external concessional borrowing for this purpose and conditions before loans are contracted or guaranteed.
- Financing terms change adjustor:
  - An adjustor up to 5 percent of the external debt ceiling set in PV terms applies if deviations are prompted by a change in financing terms (interest, maturity, grace period, payment schedule, upfront commissions, management fees).
  - Cannot be applied when deviations are prompted by an increase in the nominal amount of total debt contracted or guaranteed.
- World Bank loans adjustor:
  - If the PV of the amount of the World Bank loans signed in 2024 and 2025, respectively, is greater than the PV of the World Bank loans signed in 2022 (CFAF 179.4 billion), the ceiling will be adjusted upward pro-tanto.
  - This adjustment capped at a maximum of CFAF 182.5 billion (PV) in 2024 and 2025, respectively.

### Treasury advances without a budget allocation (paragraphs 49–51, 59)
- A ceiling on Treasury advances without a budget allocation is a continuous quantitative objective in Table 1 of the MEFP.
- Effective from July 1, 2024, tested on a cumulative basis starting from the beginning of each quarter.
- Ceiling excludes Treasury advances related to assigned revenues (recettes affectées).
- Monthly accounting statements showing the amount of Treasury advances must be reported to IMF staff within six weeks after the end of each month.
- Note: This previous indicative target was upgraded to a continuous quantitative performance criterion starting from July 1, 2024 (¶59).

### Other indicative quantitative targets (paragraphs 52–56)
- Non-oil revenue:
  - A floor on non-oil revenue as defined in paragraph 7 is an indicative objective in Table 1 of the MEFP.
- Accumulation of domestic payment arrears:
  - A ceiling on net accumulations of domestic payment arrears is an indicative objective in Table 1 of the MEFP.
  - Starting from end-June 2024, this ceiling will include payments in progress defined as balances payable under 90 days (paragraph 19).
  - Adjustment: if disbursements of external financing for the debt management operation are below programmed levels, from end-June 2024 relevant quarterly ceilings will be adjusted upward commensurately (adjustor applies only to balances payable of more and under 90 days as defined in paragraph 19).
- Social expenditure:
  - A floor on social expenditure pursuant to paragraph 11 is an indicative objective in Table 1 of the MEFP; these items will be monitored regularly.
- Reporting: government financial position tables, detailed revenue listing highlighting oil revenue, domestic payment arrears, and status of social expenditure execution must be reported within six weeks after the end of the month (except end-December data as indicated in paragraph 25).
- Share of exceptional expenditure:
  - A ceiling on the share of exceptional expenditure in total authorized expenditure not including debt is an indicative objective in Table 1 of the MEFP.
  - Calculated as ratio between exceptional expenditure (expenditure excluding debt service paid without prior authorization, including cash advances and provisional commitments) and total authorized expenditure excluding debt service that is domestically financed (including wages).
  - Monthly accounting statements showing cash advances, provisional budget commitments, and advance funds must be reported within three weeks after the end of each month; Authorized expenditure presented in Table M1 used to compute ratio.

### Structural benchmarks (paragraph 60)
- Limit on the share of common chapters expenditures in budget is a structural benchmark 5 in Table 2 of the MEFP.
- Calculated as ratio between common chapters (expenditures on chapters 60, 65, 92, 93, 94, and 95) and total expenditures (excluding debt service).

### Reform measures (paragraph 61)
- Procedures for annual evaluation of the traceability feature of the SIGIF2 platform are to be established under the RSF Reform Measure 8 on forestry (Table 3 of the MEFP).
- An independent evaluation committee will be constituted (by reactivation of the existing Comité National de Suivi set up for the APV/FLEGT), including concerned administrations, civil society, industry experts, development partners, and NGOs.
- First annual review to be completed within one year of the committee's activation.
- The review will outline key performance indicators, recommendations, and an implementation roadmap for the next evaluation.
- Annual evaluation reports will be published on the APV and the MINFOF websites within three months of the evaluation.

*Source: Excerpts from the IMF document (MEFP) provided in the source content.*

### 62. The quantitative data on the government’s quantitative and indicative objectives will

### 1cmrea2025001-print-pdf - 62. The quantitative data on the government’s quantitative and indicative objectives will

### Data Reporting Requirements (summary)
- The authorities undertake to report to IMF staff all data revisions promptly and any information/data not specifically addressed in the TMU but required for program implementation.
- Reporting periodicity and lags for key data (selected items and exact reporting terms preserved):
  - Summary situation of Treasury Operations (SROT): Ministry of Finance (MINFI)/DGTC; Monthly; Reporting lag: 6 weeks.
  - Table of government financial operations (TOFE) and customary annex tables: MINFI/DP; Monthly; 6 weeks, except end-December data reported by March 15 of the following year.
  - 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): MINFI/BEAC; Monthly; 6 weeks, except end-December data reported by March 15 of the following year.
  - Implementation status of social expenditure (Paragraph 11): MINFI/DGB; Monthly; 6 weeks.
  - Domestic debt reimbursement status: MINFI/CAA; Monthly; 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 contracts in the process of negotiation): MINFI/CAA; Monthly; 4 weeks. The signing or guaranteeing of external debt, and the occurrence of external payment arrears must be reported immediately to the IMF.
  - Monthly structured bank and non-bank debt service forecast and actual payments: MINFI/CAA; Monthly; 6 weeks.
  - Monthly monitoring report on calls for funds and effective disbursements: CAA/MINEPAT; Monthly; 4 weeks.
  - Data on implementation of public investment program, including detailed listing of financing sources: MINFI/MINEPAT/CAA; Quarterly; 6 weeks.
  - Monthly accounting statements showing amount of cash advances, advance funds, and balance of provisional budget commitments: MINFI; Monthly; 6 weeks.
  - Monthly accounting statements showing amount of Treasury (cash) advances without a budget allocation by type of expenditures: MINFI; Monthly; 6 weeks.
  - Publish the oil product price structure: MINFI/CSPH; Monthly; First week of the current month.
  - Prices, consumption, and taxation of oil products (detailed monthly components): MINFI/CTR/CSPH; Monthly; 6 weeks.
  - Revenue forecasts and outturn by type of tax (annual and monthly): DGI, DGD, DGB; Monthly; 6 weeks.
  - VAT refund balance (refund requests, payments made, and VAT refund account status): MINFI/DGI; Monthly; 6 weeks.
  - DGI/DGD joint quarterly collaboration reports (fraud identification and collection of additional revenue): DGI/DGD; Quarterly; 6 weeks.
  - Situation of SNH (volumes exported, prices, exchange rates, costs, direct interventions, commitments towards the State, balance transferable to the Treasury): MINFI; Quarterly; 6 weeks.
  - Include total amount of oil revenue from SNH and direct interventions in monthly TOFE: MINFI; Monthly; 6 weeks.
  - Accounting and budgetary extract indicating status of payment of State invoices to public service companies (ENEO, CAMWATER, CAMTEL, SONARA CAMPOST, SIC): MINFI; Quarterly; 6 weeks.
  - Publish quarterly budget execution report: MINFI; Quarterly; 8 weeks.
  - Fiscal Performance Indicators as in Table 2: MINFI/DGI; Quarterly; 6 weeks.
  - Balance of the escrow account at the BEAC for payment of domestic arrears on expenditure and payments in progress and list of all unpaid domestic obligations cleared: MINFI/DGTCFM/BEAC; Monthly; 2 weeks.
  - Consolidated balance sheets of monetary institutions: BEAC; Monthly; 6 weeks.
  - Provisional data on the integrated monetary survey: BEAC; Monthly; 6 weeks.
  - Final data on the integrated monetary survey: BEAC; Monthly; 10 weeks.
  - Net government position: BEAC; Monthly; 6 weeks.
  - Situation of the balance of the special account of undisbursed statutory advances: BEAC; Monthly; 6 weeks.
  - Key rate and credit and debit interest rates: BEAC; Monthly; 6 weeks.
  - Preliminary annual balance of payments data: MINFI; Annual; 9 months.
  - Foreign trade statistics: MINFI/INS; Monthly; 6 weeks.
  - Any revision of balance of payments data: BEAC/MINFI; On revision; 2 weeks.
  - Provisional national accounts and any revision of national accounts: INS; Annual; 6 months.
  - Quarterly National Accounts: INS; Quarterly; 3 months.
  - Disaggregated consumer price indices for Douala and Yaoundé: INS; Monthly; 4 weeks.
  - Consumer price indices disaggregated by city, product and national level: INS; Monthly; 6 weeks.
  - Any official report or study devoted to Cameroon’s economy, from date of publication/finalization: MINEPAT; 2 weeks.
  - Any decision, decree, law, order, or circular having economic or financial implications, from publication date or effective date: MINFI/MINEPAT; 2 weeks.
  - Report on implementation of expenditure of the special allocations account (CAS) COVID-19: MINFI/DGB; Bi-annually; 3 months.
  - CAS-COVID-19 expenditure audit report: MINFI/DGB; Annually; 6 months.
  - Data on SNH interventions: MINFI/DGB; Quarterly; 6 weeks.

### Debt Sustainability Assessment — Key Findings and Risk Ratings
- Risk assessments:
  - Risk of external debt distress: High
  - Overall risk of debt distress: High
  - Granularity in the risk rating: Sustainable
  - Application of judgement: No
  - Date of the assessment: February 25, 2025
- Main findings:
  - Cameroon remains at high risk of debt distress compared to the previous DSA report published in February 2024.
  - Recent debt management operation had a small negative short-term impact; still-high interest rates are more than compensated by higher nominal growth, yielding somewhat improved or substantially unchanged debt sustainability indicators.
  - Debt carrying capacity remains weak: Composite Index (CI) score at 2.60 (based on October 2024 WEO and 2023 CPIA).
  - Bond spread is above the benchmark value.
  - External debt stock indicators remain below thresholds; however:
    - External debt service-to-export indicator remains above the threshold for all years.
    - External debt service-to-revenue indicator remains above the threshold until 2030.
  - External debt service indicators have improved and are on a downward trend, supported by active debt management.
  - PV of public debt-to-GDP ratio fell below its threshold for the first time since the start of the current ECF-EFF program.
  - Staff maintains that Cameroon’s debt is sustainable given authorities’ commitment to program objectives, fiscal consolidation, and active debt management.

### Downside Risks (enumerated)
- Domestic/Political/Social risks:
  - Rising social tensions amidst still-high inflation and upcoming presidential elections.
  - Deterioration in regional stability with spillovers to Cameroon.
  - More frequent climate disasters such as flooding.
  - Realization of contingent liabilities (SOEs and PPP projects) could worsen baseline DSA indicators.
- External risks:
  - Escalation of geoeconomic tensions that could set back global recovery.
  - Prolonged tight global financial conditions and underperformance of advanced economies, deteriorating financing environment and lower export demand.
  - High volatility of global energy prices introducing uncertainty on exports and fiscal revenue.

### Policy Recommendations to Mitigate Risks
- Fiscal consolidation:
  - Continue efforts in fiscal consolidation, including elimination of fuel subsidies and increased revenue mobilization.
- Debt management:
  - Closely monitor debt service and strengthen debt portfolio management to minimize interest rate risks.
- Growth and external resiliency:
  - Promote exports and accelerate reforms to improve the domestic business and investment environment to boost exports and attract more foreign direct investment inflows.
- Contingent liabilities:
  - Strengthen management of SOEs and PPP projects to reduce risks from contingent liabilities.

### Public Debt Coverage and Contingent Liabilities
- Public debt coverage in the DSA:
  - Includes debt of the central government, expenditure floats and arrears, guarantees, debt of SONARA, and external arrears of other SOEs.
  - Does not cover debt of local governments (Collectivités Territoriales Décentralisées (CTD)) or other elements like social security funds or extra budgetary funds.
- SOE debt:
  - Domestic debt of SOEs other than SONARA is not included in the debt baseline perimeter but is treated as contingent liabilities.
  - Based on CAA data, SOEs’ external and domestic debt (excluding cross-debt to SOEs and the government) totaled:
    - CFAF 477.9 billion (external) at end-September 2024.
    - CFAF 328.3 billion (domestic) at end-September 2024.
  - Comparators at end-2023: CFAF 494.6 billion (external) and CFAF 356.6 billion (domestic).
  - SONARA accounted for around 83 percent of listed SOEs’ external debt and 68 percent of domestic debt.
- Contingent liabilities stress test parameters (Text Table 2):
  - PPP capital stock: CFAF 4,896 billion (about 16.4 percent of GDP as of September 2024); contingent liability in DSA exercise: 5.7 percent of GDP.
  - Shock scenario for remaining uncovered SOE debt: 3 percent of GDP.
  - Contingent liabilities from financial markets: minimum value of 5 percent of GDP (average cost to the government of a financial crisis in a LIC since 1980).
  - Total default coverage for contingent liabilities (2+3+4+5): 13.8 percent of GDP (as per table entries).

### Evolution of Public Debt — Key Figures (authorities and staff estimates)
- Selected public debt aggregates (exact figures preserved):

  - Authorities' estimate — Total Public Debt:
    - 2021: 11,444 45.8 percent of GDP
    - 2022: 12,382 44.8 percent of GDP
    - 2023 (Prel.): 12,644 42.3 percent of GDP
    - Sep-24: 13,497 42.0 percent of GDP

  - Authorities' estimate — External debt:
    - 2021: 7,578 30.4 percent of GDP
    - 2022: 8,153 29.5 percent of GDP
    - 2023 (Prel.): 8,149 27.3 percent of GDP
    - Sep-24: 8,597 26.8 percent of GDP

  - Authorities' estimate — Domestic debt (excl. arrears):
    - 2021: 2,815 11.3 percent of GDP
    - 2022: 3,084 11.2 percent of GDP
    - 2023 (Prel.): 3,476 11.6 percent of GDP
    - Sep-24: 3,585 11.2 percent of GDP

  - Staff estimate — Total Public Debt:
    - 2021: 11,770 47.2 percent of GDP
    - 2022: 12,608 45.6 percent of GDP
    - 2023 (Prel.): 12,899 43.2 percent of GDP
    - Sep-24: 13,435 41.8 percent of GDP

  - Staff estimate — Total External:
    - 2021: 7,974 31.9 percent of GDP
    - 2022: 8,528 30.8 percent of GDP
    - 2023 (Prel.): 8,441 28.2 percent of GDP
    - Sep-24: 8,875 27.6 percent of GDP

  - Staff estimate — Total Domestic:
    - 2021: 3,796 15.2 percent of GDP
    - 2022: 4,079 14.7 percent of GDP
    - 2023 (Prel.): 4,458 14.9 percent of GDP
    - Sep-24: 4,560 14.2 percent of GDP

- Additional specifics and notes:
  - Total public and publicly guaranteed (PPG) debt was around 43.2 percent of GDP (CFAF 12,899 billion) as of end-2023 (preliminary staff estimates), compared to 45.6 percent of GDP at end-2022.
  - In 2023, external debt stock estimated at 28.2 percent of GDP (CFAF 8,441 billion) and domestic debt at 14.9 percent of GDP (CFAF 4,458 billion).
  - In the first three quarters of 2024, public debt-to-GDP ratio continued to trend downward.
  - Share of multilateral debt in government external debt increased to 47.8 percent of total PPG external debt at September-2024 (from 43.9 percent at end-2022).
  - World Bank loans accounted for 40.0 percent of multilateral loans or 19.2 of total external debt at end-September 2024.
  - External commitments signed in 2023 reached CFAF 816 billion, mostly for non-concessional project loans.
  - Seven projects amounting to CFAF 1103.9 billion were signed as of end-September 2024.

*Prepared by the staff of the International Monetary Fund (IMF) and the International Development Association (IDA).*

### 6.      Domestic public debt increased over 2023. This increase was mainly driven by g overnment bond

### Domestic public debt increased over 2023. This increase was mainly driven by government bond issuances—including Bons du Trésor Assimilables (BTA) and Obligations du Trésor Assimilables (OTA)

### Domestic public debt composition and recent trends
- Government bond issuances (BTA and OTA) reached 40.7 percent of the total domestic public debt at end-2023, up from 38.0 percent at end-2022, and increased further in 2024 (Text Figure 1).
- Float and arrears declined in both nominal and percent values.
- Text Figure 1 components (Billions of CFAF, percent shares by instrument) show series for 2019–Sept-24 including:
  - Government bonds: 24.9, 30.0, 33.6, 38.0, 40.7, 42.8 (series aligned to figure layout)
  - Structured bank debt: 10.5, 12.5, 11.1, 9.9, 7.5, 6.2
  - Structured non-bank debt: 13.2, 12.5, 11.3, 9.2, 11.6, 11.9
  - Non-structured debt: 2.8, 2.0, 1.6, 1.4, 1.2, 1.1
  - BEAC loan: 20.3, 17.1, 16.5, 17.1, 17.0, 16.6
  - Float and arrears: 21.3, 16.2, 18.3, 17.9, 16.7, 16.1
  - SONARA: 7.0, 9.7, 7.5, 6.5, 5.3, 5.3
- Text Table 4 (selected shares, Percent, share) shows Total PPG External Debt (staff estimate) as 79, 74, 85, 28, 84, 41, 88, 75, 100.0, 100.0, 100.0, 100.0 (table formatting preserved as in source).

### Average maturity and weighted cost
- As of September 2024:
  - Average maturity of public debt = 7.6 years.
  - Average maturity of external debt = 8.9 years.
  - Average maturity of domestic debt = 4.7 years.
  - Weighted cost for debt = 3.2 percent in September 2024, only marginally higher compared to the value a year ago.

### Stock of contracted-but-undisbursed debt (SENDs)
- Stock of SENDs (excluding budget support) declined to 12.4 percent of GDP as of September 2024, compared to 12.8 percent at end-2023 and 13.3 percent at end-2022 (Text Table 5).
- In nominal terms, the stock of SENDs increased to CFAF 3,756 billion in 2023 due to signing of agreements with the World Bank and other partners.
- The government is seeking to reduce the stock of SENDs and has developed a monitoring mechanism covering 180 projects.
- The government will consult with development partners to reduce undisbursed non-performing SENDs and, if necessary, reallocate unused funding to other projects.
- Text Table 5 SENDs (Bn CFAF, % GDP):
  - SENDs: 3146 13.4; 3681 14.7; 3673 13.3; 3756 12.8; 3980 12.4 (columns correspond to years in table layout).
  - External SENDs components (o/w multilateral, bilateral, commercial) as reported:
    - o/w multilateral: 1769 7.5; 2223 8.9; 2412 8.7; 2544 8.7; 2774 8.6
    - o/w bilateral: 824 3.5; 777 3.1; 603 2.2; 526 1.8; 424 1.3
    - o/w commercial: 554 2.4; 542 2.4; 681 2.7; 658 2.4; 872 2.3

### Guaranteed debt and unguaranteed SOE debt
- Outstanding stock of guaranteed debt declined to CFAF 5.3 billion as of September 2024 from 7.9 billion at end-2023.
- The unguaranteed SOE debt as agreed in the TMU (comprising SONARA debt and other SOEs’ external debt including external arrears) declined over 2023 and then remained substantially unchanged in the first half of 2024.
- Note: Guaranteed debt results solely from old agreements; additional guaranteed debt has not incurred since 2021.

### External payment arrears and debt service
- There were no reported breaches of the zero ceiling on the accumulation of external payment arrears (continuous QPC) after a minor and short delay of debt service to a creditor in the first half of 2024.
- An SB and a revised IT have been introduced to address key factors underlying past breaches, including on treasury advances.
- Finalization of the debt management operation to borrow long-term external debt to pay down domestic arrears is expected to help improve the liquidity profile.

### Debt management capacity and governance
- Cameroon’s capacity to monitor and manage public debt for IMF debt limits policy purposes is adequate, but further improvements are needed.
- All project financing proposals and PPP projects are examined by the National Public Debt Committee (CNDP); signing of a new loan agreement is granted only when there is unconditional approval.
- A public debt management manual published in 2019 clarified procedures and responsibilities for loan operations and public debt management.
- CNDP’s engagement is often delayed until late in the debt contracting process.
- Cameroon’s debt policy is yet to be firmly anchored by its medium-term debt management framework, resulting in significant discrepancies between announced plans and actual financing.
- CNDP’s scope has been extended to all domestic and external borrowing including CTDs, public companies, and public establishments.
- Further efforts recommended:
  - Strengthen active engagement of the CNDP.
  - Enhance effectiveness of the medium-term public debt strategy (MTDS) through improved estimates of financing needs, development of consistent annual borrowing plans, and an enhanced communication strategy.
- Fund technical assistance has helped reinforce domestic issuance plan formulation and address MTDS deficiencies.

### External private sector debt
- Available data up to 2022 from World Bank IDS indicate non-guaranteed private external debt marginally declined to US$ 505 million at end-2022, compared to US$ 571 billion at end-2021 (as reported).

### Macroeconomic forecast and outlook
- 2023 outturns:
  - Real GDP growth = 3.2 percent in 2023.
  - Average inflation = 7.4 percent in 2023 (from 6.3 percent in 2022).
  - Overall fiscal deficit (payment order basis, excluding grants) = 1.1 percent in 2023.
  - Current account deficit = 4.1 percent of GDP in 2023.
- 2024 projections:
  - Real GDP growth projected at 3.9 percent in 2024, supported by non-oil GDP growth.
  - Inflation expected to decline to 4.4 percent in 2024, remaining above the CEMAC convergence level of 3 percent until 2025.
  - Fiscal deficit expected to further decline in 2024.
  - External position expected to strengthen with growing non-oil exports and continued investment inflows.
- Risks to the baseline include domestic security situation, slow reforms, and escalation of geoeconomic tensions.
- Medium-term outlook:
  - Growth expected to average 4.2 percent (medium term).
  - Inflation projected to stabilize around 3 percent (medium term).
  - Debt sustainability risks could be mitigated by strengthened public debt management and reduced reliance on non-concessional borrowing.
- Structural benchmarks (SBs) for the seventh review:
  - Of nine SBs: three met on schedule, three implemented with delay, two proposed to be reset to a later date, and one new SB proposed.
- Authorities’ commitments:
  - Adopt contingency measures to achieve program objectives, including a revised budget if needed.

### Box 1 — Medium- and Long-Term Macroeconomic Assumptions (summary)
- Medium Term (2024-2028) assumptions:
  - Real GDP growth projected to average 4.2 percent (2024-2028), revised down by 0.3 percentage point from the previous DSA.
  - Average annual inflation projected to decline to 4.4 percent in 2024 and to 3.5 percent in 2025.
  - Fiscal deficit (excluding grants, payment order basis) expected to average 0.9 percent of GDP (2024-2028).
  - Current account deficit expected to settle around 3.5 percent of GDP in the medium term.
  - Net FDI inflows expected to average 2.0 percent of GDP in the medium term.
- Long Term (2029-2043) assumptions:
  - Long-term growth expected to remain stable at 4.6 percent.
  - Fiscal revenue projected to increase with implementation of the Medium-Term Revenue Strategy (MTRS).
  - Exports of goods and services projected to decline as a share of GDP in the medium term due to falling domestic oil production; current account expected to improve amid rising natural gas production and dynamic non-oil exports.
- Policy reform scenarios are noted to show sizeable positive implications on potential growth through diversification, financial deepening, investment efficiency, subsidy elimination for SOEs, and removal of cross-sectoral distortions.

### Key macroeconomic assumptions and numeric projections (selected from Table 1)
- Real GDP growth (Current): 2021 3.0; 2022 3.7; 2023 3.2; 2024 3.9; 2025 4.0; 2026 4.1; 2027 4.4; 2028 4.6; 2024-2028 4.2; 2029-2043 4.6.
- Inflation (CPI, period average) (Current): 2021 2.3; 2022 6.3; 2023 7.4; 2024 4.4; 2025 3.5; 2026 3.0; 2027 2.8; 2028 2.6; 2024-2028 3.3; 2029-2043 2.0.
- Overall fiscal balance (excl. grants, payment order basis, percent of GDP) (Current): 2021 -3.3; 2022 -1.5; 2023 -1.1; 2024 -0.9; 2025 -0.6; 2026 -1.2; 2027 -1.2; 2028 -1.2; 2024-2028 -1.0; 2029-2043 -1.7.
- Total revenue (excl. grants, percent of GDP) (Current): 2021 13.8; 2022 15.6; 2023 16.0; 2024 15.6; 2025 15.6; 2026 15.2; 2027 15.4; 2028 15.5; 2024-2028 15.5; 2029-2043 16.5.
- Total expenditure (percent of GDP) (Current): 2021 17.1; 2022 17.1; 2023 17.1; 2024 16.5; 2025 16.1; 2026 16.5; 2027 16.6; 2028 16.6; 2024-2028 16.5; 2029-2043 18.2.
- Current account balance (incl. grants, percent of GDP) (Current): 2021 -4.0; 2022 -3.4; 2023 -4.1; 2024 -3.4; 2025 -2.8; 2026 -3.7; 2027 -3.5; 2028 -3.3; 2024-2028 -3.3; 2029-2043 -3.9.
- Exports of goods and services (percent of GDP) (Current): 2021 16.6; 2022 19.5; 2023 17.0; 2024 17.1; 2025 17.1; 2026 15.9; 2027 15.8; 2028 15.6; 2024-2028 16.3; 2029-2043 13.8.
- Oil price (US dollars per barrel) (Current): 2021 69.2; 2022 96.4; 2023 80.6; 2024 79.0; 2025 69.8; 2026 68.0; 2027 67.0; 2028 66.6; 2024-2028 70.1; 2029-2043 71.3.

*Source: IMF staff report (Cameroon), text and tables as provided.*

### 16.      The baseline projection also reflects policy parameters in the context of the IMF-supported

### 16.      The baseline projection also reflects policy parameters in the context of the IMF-supported

### Baseline assumptions and macro outlook
- The baseline projection reflects policy parameters in the context of the IMF-supported program and PPAs under the World Bank SDFP, as well as the assumption of global decarbonization efforts.
- The IMF-supported program envisages a gradual fiscal consolidation path reflecting revenue measures, including strengthening tax and customs administration, streamlining tax exemptions, and recovering tax arrears.
- The baseline assumes Cameroon will continue to remain on track implementing the PPAs on the management of fiscal risks and on contracting of non-concessional debt, as part of the government’s efforts to address key debt vulnerabilities.
- Expected outcomes from these measures:
  - Create space to support spending with higher economic and social impact and strengthen public investment.
  - Result in a gradual recovery in the medium term, followed by a more benign growth outlook, a higher export base, and stronger revenue mobilization in the long run.
- Global decarbonization efforts are assumed to impose downward pressure on both demand and price of fossil energy (crude oil and gas), Cameroon’s main exports; the baseline incorporates the related price and volume trajectories.

### Financing assumptions and recent operations
- Cameroon’s cumulative public gross financing needs over the 2024-26 period are estimated at around CFAF 5,000 billion (15.3 percent of 2024 GDP), of which around 70 percent is assumed to be financed externally.
- The DSA reflects IMF financing, including the RSF arrangement, of CFAF 245 billion and prospective budget support from donors amounting to CFAF 276 billion in 2024-2026.
- External project financing is based on the budget, with the mix of new disbursements assumed to follow the composition of SENDs as of end-2022; after 2025 the composition gradually shifts towards commercial borrowing with a decreasing grant element.
- IDA financing: a loan of US$200 million was initially budgeted for 2024 but this disbursement has not occurred due to Cameroon’s weak performance in the context of World Bank-supported PforR program; the DSA has been modified with lower fiscal spending compensating for missing IDA financing.
- Domestic financing assumptions reflect a gradually increasing share of longer maturity bonds following the authorities’ MTDS.
- Debt management operations in 2024:
  - Loan of about CFAF 131 billion from Afrexim bank in January 2024.
  - Eurobond issuance of CFAF 332 billion in July 2024.
  - Proceeds used to repay domestic arrears.
- Program performance and arrears:
  - Weaknesses in cash management and budget execution through exceptional procedures prevented meeting the program ceiling on the accumulation of domestic arrears at end-September by a small margin.
  - Delays in disbursements of budget support from the World Bank and the IMF partly contributed to liquidity constraints; net clearance of domestic obligations expected to be below program commitments by end-2024.
  - Remaining domestic arrears are assumed to be cleared within the next three years.
- Authorities plan to replace the planned regional long-term government bond issuance of CFAF 380 billion with external financing in 2025 due to tight financing conditions in the regional market.

### RSF reforms, climate coordination, and investment planning
- The reform measures under the RSF package include eight reform measures under four pillars, including integrating climate considerations at each phase of capital project development and adoption of a national climate plan.
- These measures are helping to:
  - Concretize the climate-related investment plan and improve expenditure management.
  - Formulate the authorities’ baseline scenario in climate-related investments and strengthen their management.
- Institutional developments:
  - In May 2024 the government adopted a decree formally establishing the institutional framework for coordination of the climate action agenda, defining the central role of the Ministry of Environment, Natural Protection, and Sustainable Development (MINEPDED) as the key authority responsible for coordinating the climate agenda (RM1, April 2024).
  - The decree defines roles and responsibilities of other sectoral ministries and public agencies involved in executing the climate agenda.
  - MINEPDED has defined criteria for prioritization and selection of projects integrating climate change-related criteria, which will lead to formulation of the climate investment plan.

### SONARA restructuring assumptions
- Financing assumption regarding SONARA is unchanged from the last DSA because details of the restructuring plan are yet to be finalized.
- Timeline and agreements:
  - Reached agreement with its main supplier in September 2022 to pay down its debt.
  - Restructured debt with domestic banks in October 2021.
  - Agreement with another supplier in December 2023; a few remaining suppliers still to sign agreements.
- A restructuring outline for SONARA and an action plan (core idea to advance restructuring based on PPP) was delayed and rephased; authorities have not produced such a restructuring plan.
- Staff maintains the current assumption of zero projected net income (instead of mild positive income per SONARA’s own projection); cost of potential reconstruction of the refinery operation is not incorporated in the baseline.

### Realism tool and stress-testing framework
- The realism tool highlights risks to the baseline projections:
  - The projected three-year fiscal adjustment is considered achievable given distribution of LICs’ fiscal adjustments under past IMF programs.
  - Growth projections slightly deviate from paths implied by the projected fiscal path and may not fully capture other drivers such as stronger net exports for non-oil commodity products.
- The forecast realism tool indicates differences in debt dynamics compared to historical developments, but such differences are declining:
  - Real GDP growth is projected to help reduce further the external debt ratio, together with exchange rate dynamics, substantially in line with historical developments.
  - The projected improvement in debt ratios driven by declining primary and current account deficits contrasts with past trends, but differences are reduced compared to previous DSAs.
  - Unexpected increase in public debt during the past 5 years is comparable with other LICs.
  - Large unexplained residuals for past debt-creating flows highlight risks but may be explained by the broadened debt perimeter including domestic arrears and SONARA’s debt.
- Country classification:
  - Composite Indicator (CI) score based on the October 2024 WEO projections and the 2023 World Bank CPIA score is 2.60, signaling a weak debt-carrying capacity.
  - The CI score is substantially unchanged compared to the previous DSA as slightly higher CPIA score and remittances compensate for somewhat lower reserves.

### Stress tests and tailored shocks
- Stress test design:
  - Standardized stress tests apply default settings.
  - Contingent liability stress test is based on quantification of contingent liabilities.
  - Tailored stress tests for Cameroon include a market financing shock and a commodity price shock due to an outstanding Eurobond and exports of fuel and other commodities making up more than 50 percent of total exports.
- Key stress-test findings:
  - External risk of debt distress is assessed to remain high as two indicators breach thresholds under the baseline scenario: external debt service-to-exports ratio and external debt service-to-revenue ratio breach their respective thresholds for a prolonged period.
  - Both ratios show a gradual downward path due to stronger revenue prospects; the external debt service-to-revenue ratio will decline below the threshold after 2030.
  - Upticks on the longer end reflect a jump of projected debt service related to the maturing Eurobond.
  - Thresholds for all four external indicators are breached under the most extreme stress scenarios; export shock and commodity price shock are the most extreme across external debt indicators.
  - The historical scenario points to an exploding PV of debt-to-exports reflecting a large historical current account deficit, differing from the baseline which assumes improvement driven by dynamic non-oil exports and moderate imports growth supported by fiscal balance converging to the CEMAC criterion.
- Commodity price shock assumptions (footnoted):
  - Initial price drop of 37 percent for fuel products and 24 percent for other agricultural commodities is assumed, with a mitigating factor of 16 percent for fuel products. The gap is assumed to close in six years.

### External and public debt sustainability assessment
- External debt sustainability:
  - External risk of debt distress remains high with two indicators breaching thresholds under the baseline.
  - External debt service-to-exports and external debt service-to-revenue breach thresholds for a prolonged period but show gradual downward paths.
- Public debt sustainability:
  - Risk associated with public debt distress is assessed to remain high, despite PV of debt-to-GDP falling below its threshold under the baseline.
  - PV of public debt-to-GDP ratio fell below the benchmark over the whole projection horizon for the first time since the start of the current ECF-EFF program, indicating a declining risk of overall debt distress.
  - PV of debt-to-revenue ratio and debt service-to-revenue ratio are projected to decline gradually.
  - Most extreme shock for public debt indicators (including PV of debt-to-GDP, PV of debt-to-revenue, and debt-service-to-revenue) are the combined contingent liabilities and commodity price shocks.
  - Historical scenario projects an explosive path for PV of debt-to-GDP and PV of debt-to-revenue ratios, mainly driven by large historical primary deficits compared to projections.

### Market module findings
- Market financing tool signals risks associated with market financing pressures:
  - Cameroon’s maximum three-year gross financing needs are estimated at 5 percent of GDP, which is lower than the suggested benchmark (14 percent).
  - Latest available EMBI spread for Cameroon is 764 bps as of January 28, 2025, which remains above the benchmark (570 bps) though lower than previous DSA levels (above 900 bps at end-2023).
  - With the EMBI spread breaching its threshold, the module signals continued market financing pressures.

### Overall risk rating, vulnerabilities, and sources of risk
- Overall assessment:
  - While Cameroon continues to be at a high risk of debt distress, its debt remains sustainable.
  - Two out of four external indicators temporarily breach thresholds under the baseline; PV of public debt-to-GDP ratio fell below the benchmark for the first time since start of current ECF-EFF program.
  - External debt stock indicators remain below thresholds; external debt service indicators have improved supported by active debt management.
  - Debt service-to-exports and debt service-to-revenue ratios are above thresholds but on a gradual downward trend.
  - Compared with the previous DSA, debt indicators have marginally improved or remained substantially unchanged, with higher nominal growth offsetting impact of the debt management operation.
  - Staff maintains that Cameroon’s debt is sustainable given authorities’ commitment to program objectives; the likelihood that Cameroon will not be able to meet current and future financial obligations is low.
- Downside risks:
  - Domestic: high inflation; upcoming presidential elections could intensify socio-economic tensions; continuing fuel subsidy could reduce fiscal space and derail fiscal consolidation; delays in SONARA restructuring and rehabilitation would jeopardize debt sustainability; regional security conflicts could compound fiscal challenges; realization of contingent liabilities from bank restructuring and from SOEs not included in the DSA baseline; acceleration in disbursements due to large stock of SENDs.
  - External: escalation of geoeconomic tensions could set back global recovery and prolong supply chain disruptions; longer-than-expected tight global financial conditions and underperformance in advanced economies could deteriorate financing environment and lower export demand; high volatility of global energy prices could introduce uncertainty to exports and fiscal revenues.
- Domestic debt:
  - Domestic debt remains below the median level across LICs and does not signal additional sustainability risk.
  - Domestic debt has increased over past years but is expected to fall from 2024 onwards driven by the debt management operation and additional reliance on external finance in the next few years.
  - Domestic debt stock and domestic debt service remain below the median level across countries using the LIC DSF.
  - Net domestic debt issuance experiences a trough in 2025 due to higher reliance on external financing (¶17), and is expected to stay around zero—from 2026 onwards allowing just the roll-over of pre-existing domestic debt.
- Climate risk:
  - World Bank’s Country Climate and Development Report estimates the negative impact of climate change on GDP ranges between 4 to 10 percent by 2050 in Cameroon.
  - Additional adaptation and mitigation investments of US$32 billion and US$26 billion, respectively, over a horizon of 10 years would limit GDP losses, reverse losses in agriculture, and reduce the poverty rate, potentially turning into an opportunity.
  - In a simulation based on the Debt, Investment, Growth, and Natural Disaster model, upfront adaptation investment reduces GDP losses in the event of climate shock and allows faster recovery; adaptation investments may initially have a negative impact on debt burden indicators but improve these indicators in the long term by reducing need for additional investments following disasters.

### Policy recommendations (priorities to ensure debt sustainability)
- Keep public debt dynamics on a sustainable path through gradual fiscal consolidation and containing fiscal deficit in the short term.
- Implement structural fiscal reforms, including eliminating fuel subsidies and enhancing revenue mobilization.
- Pursue a prudent borrowing policy skewed towards concessional loans and limit reliance on non-concessional borrowing while strengthening management of SENDs.
- Strengthen targeted spending and redirect resources, using windfall oil revenue gains for protecting the most vulnerable and prioritizing growth-enhancing public investment.
- Closely monitor debt servicing costs and actively manage the debt portfolio to minimize interest rate risks.
- Improve competitiveness and achieve economic diversification to address vulnerable export-related debt indicators; accelerate reform momentum to improve the domestic business and investment environment to invite more FDI and boost exports.
- Strengthen management of SOEs to reduce risks related to contingent liabilities.
- Leverage the RSF reform package to accelerate progress in addressing climate-related risks and enhance longer-term debt sustainability.

*Source: 1cmrea2025001-print-pdf - 16.      The baseline projection also reflects policy parameters in the context of the IMF-supported*

### 32.      Authorities will continue to address various pockets of debt vulnerabilities.  Authorities are

### Authorities will continue to address various pockets of debt vulnerabilities.  Authorities are

### Authorities’ commitments and actions
- Committed to an improvement of Cameroon’s debt risk assessment, which will depend on continued active debt management, exports, and budgetary revenue performance, as well as the country’s CI score.
- Working on deepening domestic financial markets, supported by IMF technical assistance.
- Committed to service external and domestic debt in a timely fashion and plan to clear remaining domestic arrears.
- Prior action met: contract with Axens for the in-depth technical and economic study for restructuring the SONARA oil refinery was signed on February 19, 2025; staff received the terms of reference and the signed contract on March 5.

### Debt dynamics and stress-testing framework
- Stress tests and scenario analysis cover 2024–2034, including:
  - Historical scenario, Baseline, Most extreme shock (the test that yields the highest ratio in or before 2034), Tailored stress tests (Combined contingent liabilities, Natural disaster, Commodity price, Market financing), and one-off breach presentations where relevant.
  - All additional financing needs generated by shocks under the stress tests 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.
- Borrowing and marginal debt assumptions shown in figures:
  - Avg. nominal interest rate on new borrowing in USD: 5.0%
  - Avg. maturity (incl. grace period): 21 (years)
  - Avg. grace period: 5 (years)
  - Shares of marginal debt, terms of marginal debt and market-financing customizations indicated in figures (no numeric change to default settings unless noted).

### Key sustainability indicators and projections (selected, exact values preserved)
- External debt (nominal), in percent of GDP:
  - 2021: 33.2
  - 2022: 32.0
  - 2023: 29.4
  - 2024: 29.8
  - 2025: 31.0
  - 2026: 29.8
  - 2027: 28.5
  - 2028: 27.3
  - 2029: 26.1
  - 2030: 23.1
  - 2034: 19.1
  - 2044: 28.2
- Public and publicly guaranteed (PPG) external debt, in percent of GDP:
  - 2021: 31.9
  - 2022: 30.8
  - 2023: 28.2
  - 2024: 28.7
  - 2025: 29.9
  - 2026: 28.7
  - 2027: 27.5
  - 2028: 26.3
  - 2029: 25.2
  - 2030: 22.4
  - 2034: 18.7
  - 2044: 25.9
- Change in external debt (yearly):
  - 2021: -1.4
  - 2022: -1.2
  - 2023: -2.6
  - 2024: 0.4
  - 2025: 1.2
  - 2026: -1.2
  - 2027: -1.3
  - 2028: -1.2
  - 2029: -1.2
  - 2030: -0.2
  - 2034: -0.7
- Identified net debt-creating flows (selected years):
  - 2021: -1.2
  - 2022: 1.8
  - 2023: -0.9
  - 2024: 0.5
  - 2025: -0.2
  - 2026: 0.6
  - 2027: 0.3
  - 2028: 0.1
  - 2029: 0.0
  - 2030: 0.9
  - 2034: -0.5
- Sustainability indicators (PV and ratios):
  - PV of PPG external debt-to-GDP ratio (selected series): 22.8, 21.3, 22.6, 21.7, 20.6, 19.6, 18.7, 16.9, 15.3 (series shown in table).
  - PV of PPG external debt-to-exports ratio (selected): 134.4, 124.9, 132.1, 135.8, 130.6, 125.6, 118.9, 119.4, 105.1 (series shown in table).
  - PPG debt service-to-exports ratio (selected): 20.4, 14.0, 15.9, 17.2, 13.7, 15.6, 16.8, 15.8, 15.3, 11.2, 11.6 (series shown).
  - PPG debt service-to-revenue ratio (selected): 23.6, 17.5, 16.7, 18.6, 15.0, 16.3, 17.1, 15.8, 12.5, 9.7, 8.8 (series shown).
- Gross external financing need (Billion of U.S. dollars):
  - 2021: 3.2
  - 2022: 1.7
  - 2023: 2.3
  - 2024: 2.2
  - 2025: 1.6
  - 2026: 2.2
  - 2027: 2.3
  - 2028: 2.2
  - 2029: 2.2
  - 2030: 3.0
  - 2034: 3.1
- Key macro assumptions (selected):
  - Real GDP growth (percent): 2021: 3.0; 2022: 3.7; 2023: 3.2; 2024: 3.9; 2025: 4.0; 2026: 4.1; 2027: 4.4; 2028: 4.6; 2029: 4.6; 2030: 4.7; 2034: 5.1; 2044: 3.7
  - Effective interest rate (percent): 2021: 2.2; 2022: 1.8; 2023: 2.5; 2024: 2.2; 2025: 2.1; 2026: 2.4; 2027: 2.5; 2028: 2.5; 2029: 2.5; 2030: 3.2; 2034: 2.9; 2044: 2.4
  - Government revenues (excluding grants, percent of GDP): 2021: 14.3; 2022: 15.7; 2023: 16.1; 2024: 15.7; 2025: 15.7; 2026: 15.3; 2027: 15.5; 2028: 15.6; 2029: 15.9; 2030: 16.4; 2034: 19.1
- Public sector debt (percent of GDP), baseline series:
  - 2021: 47.2
  - 2022: 45.6
  - 2023: 43.2
  - 2024: 42.0
  - 2025: 39.4
  - 2026: 37.9
  - 2027: 36.5
  - 2028: 35.0
  - 2029: 33.7
  - 2030: 30.3
  - 2034: 27.4
  - 2044: 34.6
- PV of public debt-to-GDP ratio (selected): 37.5, 34.9, 32.2, 30.8, 29.6, 28.4, 27.2, 24.9, 24.0 (series shown).
- Gross financing need (percent of GDP), selected years: 8.3, 5.9, 4.8, 5.4, 4.1, 4.7, 5.2, 5.6, 5.0, 4.9, 5.0.

### Stress-test outcomes and sensitivity analysis (selected highlights)
- Table 4 sensitivity analysis (2024–2034) shows:
  - Baseline PV of Debt-to-GDP Ratio: 35 (2024), 32 (2025), 31 (2026), 30 (2027), 28 (2028), 27 (2029), 26 (2030), 25 (2031–2034).
  - Alternative scenarios and bound tests can raise PV and debt service metrics; for example:
    - A1. Key variables at their historical averages in 2024-2034: PV of Debt-to-GDP Ratio series increases from 35 to 44 by 2034.
    - C1. Combined contingent liabilities: PV of Debt-to-GDP Ratio series rises to as high as 45 in early projection years and remains elevated relative to baseline.
    - C3. Commodity price shock: PV of Debt-to-GDP Ratio can rise to 41–49 in several projection years.
  - A bold value in the table indicates a breach of the benchmark.

### Market-financing risk indicators and vulnerabilities
- Market-financing risk indicators (Figure 5) flag a breach of benchmark for maximum gross financing needs (GFN) over a 3-year baseline projection horizon.
- EMBI spreads correspond to latest available data; breach status indicated as "Yes" for some thresholds.
- Potential for heightened liquidity needs categorized as "Moderate" in the figures.

### Realism tools and fiscal adjustment context
- 3-Year Adjustment in Primary Balance: distribution shows that a 3-year PB adjustment greater than 2.5 percentage points of GDP is in approximately the top quartile for Fund-supported programs for LICs (excl. emergency financing).
- Fiscal adjustment and possible growth paths are presented under different fiscal multipliers (Multiplier = 0.2, 0.4, 0.6, 0.8) showing government investment and private investment trajectories under the previous and current DSAs.

### Policy implications and operational priorities (implied by content)
- Maintain active debt management to improve debt-risk assessment and sustain debt carrying capacity (CI score).
- Deepen domestic financial markets, with IMF technical assistance, to diversify financing sources.
- Prioritize timely service of external and domestic debt and clear remaining domestic arrears to reduce exceptional financing and residuals in debt dynamics.
- Monitor commodity-price and export shocks closely given their potential to be the most extreme stress tests affecting PV and debt-service ratios.

*Source: IMF staff report figures, tables, and statement material as contained in the provided content unit.*

### Introduction

### Introduction

### Key requests and context
- Authorities request IMF Executive Board approval of the seventh reviews of the ECF and EFF, completion of the second RSF review, and related disbursement of SDR 89.7 million.
- Authorities seek approval of revised program targets for December 2024 and March 2025, aligned with updated macroeconomic projections.
- Authorities broadly agree with staff’s assessment and policy advice and remain committed to sustaining reforms under their SND-30 development agenda.

### Program performance snapshot
- All quantitative performance criteria and most indicative targets for the review period have been met; structural reforms continue to advance, some with delay.
- Program consistent with CEMAC Heads of State renewed commitment in December 2024 to strengthen the region’s internal and external stability.

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### Recent Economic Developments and Outlook

### Growth, inflation, and external sector
- Real GDP growth: rebounded to 3.6 percent in the first half of 2024, after 3.2 percent in 2023.
- Inflation: 12-month average inflation fell to 4.5 percent in December 2024, compared to 7.4 percent a year earlier.
- Public debt: public debt-to-GDP ratio projected to reach 42 percent at end-2024.
- Trade and current account: trade deficit narrowed; current account deficit expected to stabilize between 3 and 4 percent of GDP in the medium-term.

### Banking sector and financial resilience
- Banking sector solvency ratio improved to 15.3 percent.
- Non-performing loans (NPLs) declined to 12.9 percent in July 2024.
- Banks’ exposure to sovereign borrowers increased from 27 percent in 2020 to 37 percent of total assets in December 2023.

### Outlook and medium-term projections
- Authorities anticipate growth reaching nearly 4 percent in 2024 and 2025.
- Medium-term: structural transformation under SND-30 expected to push real GDP growth above 4.5 percent.
- Inflation projected to gradually decline below the CEMAC convergence threshold of 3 percent in the medium term.
- External position expected to strengthen with rising non-oil exports (notably cocoa and cotton), increased FDI, and deeper regional integration.

### Risks
- External: rising geopolitical tensions, trade disruptions, commodity price volatility, delays in donor disbursements, tight global financial conditions.
- Domestic: natural disasters and security challenges in conflict-affected areas; liquidity constraints affecting arrears clearance.

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### Performance under the ECF, EFF and RSF Arrangements

### Quarterly performance and corrective actions
- End-June 2024: all quantitative performance criteria (QPCs) met and most indicative targets (ITs) met, including first-time limitation of exceptional spending procedures.
- End-September 2024: authorities met seven out of nine ITs; challenges in domestic arrears clearance and SNH direct interventions due to security-related expenditures and cash flow constraints.
- End-December 2024: the two available QPCs were met; waiver of applicability requested for remaining QPCs under the EFF due to unavailable data.
- Authorities initiated corrective measures: enhanced transparency on SNH direct interventions via reporting and gradual budget integration; strengthening budget discipline under Finance Law LF2025.

### Structural benchmarks and RSF progress
- Six of nine structural benchmarks achieved, particularly in budget management, public enterprise transparency, tax administration, and banking stability.
- Delays: SONARA restructuring and revision of the Investment Incentive Law moved to April 2025; a consultant contract has been initiated for an in-depth study of SONARA as a prior action before the eighth reviews.
- RSF: two key reform measures completed on schedule (RM 4: climate-conscious project evaluation methodology; RM 6: revision of the Civil Protection Law).
- RSF ongoing reforms include finalizing RM7 (disaster risk financing strategy), updating RM2 (National Climate Plan), integrating RM5 (climate considerations into public investment planning), and expanding RM8 (forest resource monitoring system).

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### Policy Priorities Going Forward

### Fiscal policies and debt management
- Non-oil primary deficit narrowed from 2.5 percent of GDP in 2023 to an estimated 2.0 percent in 2024; further decline to 1.3 percent expected by 2025.
- Non-oil revenue: increased from 11.4 percent of GDP in 2020 to 13.2 percent in 2024, projected to reach 13.5 percent by 2025.
- Measures to improve fiscal governance:
  - Treasury advances reduced from CFAF 369 billion in 2023 to CFAF 35 billion by mid-2024; limited to emergencies only.
  - Expand e-procurement coverage to 90 percent of public contracts by May 2025.
  - Cap payment delays at 90 days; enforce tighter budget execution rules.
- Debt management and arrears:
  - Authorities reinforce debt management to address high risk of debt distress.
  - Initiated repayment of debt service under cross-debt clearance agreements finalized in April 2024.
  - Commit to restricting non-concessional borrowing to high-impact projects and to annual audits and elimination of unauthorized accounts.
  - Seeking IMF capacity development to better define government debt perimeter and fiscal risks.

### Energy sector and SOE restructuring
- SOE reforms and energy sector priorities:
  - Restructuring of SONARA advancing; restricted tender launched for feasibility study on hydrocracking refinery.
  - Plan to acquire a majority stake in ENEO; budgetary provision included in LF2025 for potential losses and electricity subsidies with commitment to full budgetary transparency.
  - Collaboration with World Bank and African Development Bank under Program for Results to support investment and manage fiscal risks.
  - Consider tariff adjustments over the medium term to improve cost recovery.
  - Expand hydroelectric capacity via Nachtigal dam project and Sanaga basin development to position electricity as a potential export sector.

### Subsidy reform and social protection
- Phased removal of fuel subsidies to rationalize expenditure; fuel price adjustments in February 2023 and 2024 already freed resources.
- Plan to introduce an automatic fuel price adjustment mechanism over the medium-term with targeted social protection measures.
- Social Safety Nets Adaptive Project (2023–2028) has disbursed a quarter of its funding; focus on improving targeting and fiscal sustainability.
- Development of a comprehensive communication strategy to support public acceptance of subsidy reform.

### Financial sector stability, governance, and inclusion
- Banking sector measures:
  - Recapitalization of two undercapitalized banks; one now meets Basel requirements.
  - Development of a credit registry, digitization of land records, and expansion of SME guarantee fund.
  - Working with BEAC to enhance liquidity in government securities market and encourage foreign investment.
  - Strengthening Debt Collection Corporation (SRC) and operationalizing Deposit and Consignment Fund (CDEC) to manage dormant accounts.
- Financial inclusion strategy (2023-2027) implementation to broaden SME and agricultural financing, promote digital and Islamic banking, and enhance consumer protection.
- Governance and anti-corruption:
  - Reinforcing anti-corruption legal framework to comply with the United Nations Convention Against Corruption, including criminalizing illicit enrichment.
  - Measures to reestablish full compliance with the Extractive Industries Transparency Initiative (EITI).
- AML/CFT and FATF grey-list exit:
  - Progress on financial intelligence, beneficial ownership disclosure, and inter-agency cooperation.
  - Further steps to address strategic deficiencies, reinforce supervision, and enhance prosecutions; IMF technical assistance ongoing.

### Climate resilience and green finance
- Integration of climate adaptation and disaster risk management into economic planning.
- RSF reforms to be completed by April 2025: RM7 (disaster risk financing strategy), RM2 (National Climate Plan), RM5 (climate integration in public investment planning).
- Progress in green finance mobilization and expansion of forest resource monitoring (RM8) to strengthen environmental oversight and attract sustainable financing.

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### Conclusion

- Authorities remain committed to ECF, EFF, and RSF-supported arrangements that underpin the SND-30 agenda.
- Despite external and domestic challenges, Cameroon has sustained macroeconomic stability, advanced key structural reforms, and strengthened climate resilience.
- Given the progress and continued reform efforts supported by CEMAC-level regional policy assurances, authorities seek IMF Executive Board approval of the seventh ECF/EFF reviews and the second RSF review.

*Source: Introduction, 1cmrea2025001-print-pdf*

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_Source: https://www.imf.org/-/media/files/publications/cr/2025/english/1cmrea2025001-print-pdf.pdf_