## 1. Real Sector Developments, 2019– 25 ## Source details **Canonical URL:** [1. Real Sector Developments, 2019– 25](https://www.imf.org/-/media/files/publications/cr/2026/english/1cmrea2026001-source-pdf.pdf) ## Other formats - [Markdown version](/-/media/files/publications/cr/2026/english/1cmrea2026001-source-pdf.pdf.md) - [Structured JSON version](/-/media/files/publications/cr/2026/english/1cmrea2026001-source-pdf.pdf.json) --- ### Context: macroeconomic setting and recent history - Cameroon has reduced its debt-to-GDP ratio through fiscal consolidation but faces high risk of debt distress driven by liquidity risks from low exports and low fiscal revenues. - Imputed gross international reserves at the central bank are around 6 months of imports but fell sharply in the second half of 2025 before partially recovering toward year-end, supported by commercial external borrowing. - Real GDP growth has been hovering between 3-4 percent over the last decade versus the government SND30 objective of 8 percent; per capita growth has lagged the Sub-Saharan Africa (SSA) average. - Slow structural reform implementation during two successive Fund arrangements (latest program completed in July 2025) impeded growth potential; SOE governance and PFM reforms remained weak. - Political instability: over a million Internally Displaced Persons from Anglophone regions and Boko Haram attacks in the North, plus around 500,000 refugees from Central African Republic; post‑October 2025 presidential election unrest followed President Paul Biya securing an eighth term; a new government has yet to be announced and legislative and municipal elections have been postponed. ### Recent economic developments (2019–25): key outcomes - Growth - Real GDP growth estimated to have slowed to 3.1 percent in 2025 as post-election unrest disrupted trade, services, and investment. - Inflation and monetary policy - Average inflation eased to 3.4 percent by December 2025, driven by moderating food and transportation prices. - On December 15, the regional central bank (BEAC) raised its policy rate by 25 bps to 4.75 percent amid declining reserve levels. - Fiscal developments - The fiscal position weakened in 2025, reversing part of prior consolidation. - Preliminary estimates: non‑oil primary balance (NOPB) deteriorated to 2.6 percent of GDP in 2025, exceeding the budget target of 1.4 percent of GDP. - Underperformance in non-oil revenues and slippages in current expenditures more than offset weak capital budget execution. - The arrears stock increased, contrary to the 1 percent of GDP arrears clearance objective in the 2025 budget. - External sector - Current account deficit expected to have widened to 3.9 percent of GDP in 2025 (from 3.3 percent in 2024), partly reflecting lower oil export receipts. - Net foreign assets (NFA) ended 2025 broadly unchanged relative to 2024 but with significant intra-year volatility and a second-half decline before stabilization supported by external commercial financing. ### Outlook and risks - Short-term projections - Growth is projected to recover to 3.3 percent in 2026, reflecting higher public investment. - Inflation expected to decline to 2.9 percent in 2026. - Current account deficit forecast to widen to 4.9 percent of GDP in 2026 on the back of lower cocoa prices (could narrow if the recent sharp rise in oil prices lasts over several months). - Medium-term projections - As mining diversification materializes, growth projected to reach 4.6 percent and the current account deficit to narrow to 3.4 percent of GDP. - Key risks - Dependence on price-volatile commodity exports. - Fiscal policy challenges and policy uncertainties in the CEMAC region. - Tight liquidity conditions and higher global interest rates could heighten financing risks amid large amortizations due. - Reduced aid may increase budget pressures. - Continued security and climate-related challenges weigh on the growth outlook. - Further weakening of CEMAC’s international reserves could heighten uncertainty and require additional policy adjustments. ### Authorities’ views - Authorities forecast 3.7 percent growth in 2025 and expect 4.9 percent by 2028 driven by oil and mining sectors, electricity transmission and distribution, and transport infrastructure. - Authorities acknowledged risks related to external stability in CEMAC and continued security concerns. ### Policy discussion: priorities to foster growth and reduce fiscal vulnerabilities - Overarching priority: foster growth and reduce fiscal vulnerabilities through stronger domestic revenue mobilization to finance infrastructure and ease borrowing constraints amid heightened liquidity risks to debt sustainability. - Address PFM and PIM weaknesses and SOE governance to improve fiscal reporting, spending efficiency, and governance. - Enhance financial sector resilience and access, and implement targeted governance reforms to support inclusive growth. - Key constraints to long-term sustainable growth - Limited access to finance: high sovereign exposure, short loan maturities, and elevated credit risks limit banks’ capacity and incentives to extend long-term credit to SMEs and new firms. - Infrastructure gaps: public investment has suffered from budget cuts, efficiency weaknesses, slow project implementation, and governance challenges, including issues related to the re‑nationalization of ENEO. - Regulatory bottlenecks: frequent rule changes and overlapping mandates increase uncertainty and compliance costs; reassessing regulatory provisions limiting private participation in fiber infrastructure could unlock investment in telecom/internet while safeguarding national security. - Staff and authorities’ alignment - Authorities emphasized priority on improving access to finance (including efforts to strengthen the SME bank), higher public investment to close infrastructure gaps, and industrial and import substitution policies. ### Strengthening fiscal resilience: findings and staff recommendations - Fiscal trajectory and composition - The overall deficit (payment order basis) declined from 3.6 percent of GDP before the pandemic to 1.5 percent in 2024, in line with the CEMAC reference target. - Tax revenue recovered to pre-pandemic levels, supported by revenue administration reforms, but current expenditure increased, crowding out capital spending. - Despite contracting external commercial loans to pay arrears in 2024, domestic arrears reduction was not achieved. - Financing pressures and liquidity risks - Large amortizations projected to exceed 6 percent of GDP annually over 2027-31, primarily domestic. - Regional government securities market nearing saturation with weakening demand for Cameroon’s securities. - High bank exposure to sovereign debt limits banks’ direct lending capacity. - Government secured an external bank guarantee for domestic borrowing and an external loan amounting to 0.9 percent of GDP in December 2025 at 10.58 percent effective interest rate. - To address the 2025 arrears increase (around 1 percent of GDP), Cameroon arranged in early 2026 a private placement with a 9.45 percent effective interest rate. - Staff reform principles to underpin fiscal policy (2026 and medium term) - Anchor fiscal policy on the CEMAC reference fiscal deficit of 1.5 percent of GDP to allow a gradual decline in public debt vulnerabilities over the medium term. - Prioritize domestic revenue mobilization to ease liquidity risks and provide resources for scaling up investment. - Scale up public investment relying on concessional financing from development partners; public investment peaked at 3.5 percent of GDP in 2019 but has since under-executed. - Exercise caution against increasing dependence on commercial external budget financing due to higher liquidity risks; allocate scarce budget resources to counterpart funding for development-partner-financed projects. - Phase in scaling up of capital spending over the medium term given limited PFM and PIM capacity to reduce risks from weak project design and cost overruns. - Support pro-growth reallocation in the 2026 budget toward capital expenditures only if current spending is backed by credible measures and realistic forecasts, including security-related expenditures previously financed off-budget. - Implement a credible medium-term arrears clearance framework urgently (estimated arrears stock of at least 4 percent of GDP by end-2025) within a broader medium-term financing strategy that balances frontloaded arrears clearance benefits against the high costs of commercial external borrowing. - Assessment of the 2026 budget versus staff baseline - Both the 2026 budget target and staff baseline project a deficit of 1.7 percent of GDP, meeting the CEMAC reference criterion, with a structural deficit below the 1.5 percent ceiling. - Staff baseline assumptions: - Current expenditure in 2026 is higher than in the budget but projected to decline relative to the 2025 outturn due to absence of election-related spending pressures and measures to better control the wage bill. - Revenue projections exclude non-identified measures in the 2026 budget but reflect recovery from the weak 2025 outturn and policy and administrative measures. - Lower capital spending is assumed relative to the budget, reflecting more realistic execution rates. - The budget’s financing composition tilts toward external commercial financing, whereas staff baseline relies more on project financing from development partners. ### Key statistics and projections (selected) - Real GDP growth (annual percent change): 3.5 (2024 est.), 3.1 (2025), 3.3 (2026), 3.8 (2027), 4.2 (2028), 4.3 (2029), 4.4 (2030), 4.6 (2031). - Consumer prices (average): 4.5 (2024), 3.4 (2025), 2.9 (2026). - Public debt: 43.4 percent of GDP at end-2024. - Non‑oil tax revenue, 2025: CFAF 3,895 (11.3 percent of GDP); non‑oil tax revenue, 2026 (projection): CFAF 4,331 (12.1 percent of GDP). - Overall balance (payment order basis) including grants (percent of GDP): -1.5 (2024), -2.0 (2025), -1.7 (2026). - Current account balance (percent of GDP, including grants): -3.3 (2024), -3.9 (2025), -5.2 (2026). - Oil price ($US per barrel): 79.2 (2024), 67.7 (2025), 64.7 (2026). ### Mobilizing non-oil revenue and fiscal measures - Central government tax-to-GDP ratio stands at 12 percent; increases to around 14 percent when revenues collected by local governments are included. - Near-term priorities: - reducing tax expenditures, - advancing digitalization, - preventing buildup of VAT refund arrears, - legal amendments to eliminate obsolete or expired VAT exemptions and tax incentives, - extending e‑invoicing and improving system integration. - Medium-term measures: - broadening the tax base, - limiting VAT exemptions to essential goods and services and phasing out remaining VAT tax incentives, - advancing income tax reforms, - piloting property tax modernization, - stronger data-sharing across government entities. ### Fuel subsidy reform and social protection - Fiscal cost of fuel subsidies declined from about 4 percent of GDP in 2022 to below 1 percent in 2024. - Introducing an automatic pricing mechanism would reduce fiscal risks; prerequisites include closing the gap between administered prices and cost‑recovery prices and a thorough review of the pricing formula. - Social protection: - Expanding coverage and improving benefit adequacy of the existing social safety net is key to successful fuel subsidy reform. - Revamping social safety nets is under way with World Bank support. - Establishing a dedicated budget line for social assistance is key to predictable financing and effective implementation. ### Reducing fiscal risks from SOEs - SOEs face weak oversight and governance frameworks; only a few SOEs release financial reports. - Several SOEs face large recapitalization needs, heavy debt burdens, unpaid bills from the central government, and complex cross debts. - Staff recommendations: - strengthen oversight mechanisms, - revamp governance structures, - provision sufficient funds to mitigate fiscal risks. - National Investment Company (SNI) creation delayed reforms and poses coordination challenges; recommend separation of roles, strict reporting obligations, and centralized fiscal risk analysis within the Ministry of Finance. ### Improving PFM and PIM; SENDs backlog - TSA implementation delayed due to interoperability technical challenges; BEAC aims to complete required preparations by mid-2026. - Backlog of committed but undisbursed balances (SENDs) remains large—at about 15 percent of GDP in 2025. - Staff urge authorities to cancel or reactivate projects, ensure proper budget integration, streamline procurement, and integrate procurement with budget execution and project monitoring systems. ### Maintaining debt sustainability, external stability, and Fund repayment capacity - Cameroon remains at high risk of external and overall debt distress, although debt is assessed as sustainable over the medium term. - Debt-carrying capacity upgraded to medium; two out of four external debt indicators continue to breach thresholds, indicating persistent liquidity risks. - PV of public debt-to-GDP remains below the benchmark throughout the projection horizon. - Capacity to Repay (CtR) the Fund: - Outstanding credit to the Fund peaked at about 3 percent of GDP in 2024 and is projected to decline gradually over the medium term. - Annual obligations projected to peak at about 2.6 percent of revenues and 3.2 percent of exports in 2027, and 6.7 percent of gross reserves in 2028. - With Cameroon’s credit outstanding exceeding the PFA threshold of 200 percent of Cameroon’s quota, PFA is warranted for closer monitoring. - Staff recommendations: continued reforms, strict limits on non-concessional borrowing, and further strengthening of the medium-term debt management strategy. ### Enhancing financial policy to support stability and growth - Financial sector weaknesses and risks - Banks’ holdings of government securities increased from 9.5 percent of assets at end-2015 to 32 percent of assets as of June 2025. - Private-sector credit has declined as a share of total bank assets; private lending remains dominated by short-term, high-cost loans to large firms. - Nonperforming loan ratio remained elevated in 2025 and data weaknesses hamper surveillance. - Recommendations to mitigate banking sector risks - gradual reduction of sovereign exposure, - stronger application of prudential standards and consistent regional enforcement, - develop secondary debt market and encourage non-bank government financing, - capacity building in banking supervision. - Public sector participation in banking - State holds majority stakes in eight out of nineteen banks following bailouts and acquisitions; staff recommend a robust regulatory framework, enhanced monitoring, restructuring and resolution plans, and prioritizing divestment where feasible. - AML/CFT and FATF grey listing - Cameroon placed on FATF grey list; steps taken to strengthen implementation of targeted financial sanctions and oversight of non-financial sectors; further steps include enhancing investigative and prosecutorial capacity and improving beneficial ownership transparency. - Financial inclusion and market development - Near-term priorities: implement credit registries, operationalize guarantee mechanisms, expand alternative financing instruments. - Progress noted: region’s first credit reference bureau, digitizing land registry, training commercial judges. ### Annex I and external sector assessment (selected) - Overall assessment: Cameroon’s external position in 2025 was assessed to be moderately weaker than implied by fundamentals and desirable policies. - NIIP as of end-2023: -32.7 percent of GDP. - 2024 imputed gross reserves at BEAC for Cameroon: 6.3 months of imports. - Model-based assessment for 2025: - EBA-Lite CA model: CA norm of -2.9 percent of GDP; cyclically adjusted CA of -4.7 percent of GDP; implied CA gap of -1.8 percent of GDP. - EBA-Lite REER model: CA gap of -0.8 percent of GDP (corresponding to a REER gap of 6.2 percent). - Staff judgment: REER overvalued by about 14.2 percent (CA model basis). ### Annex III. Deepening the Domestic Debt Market (selected) - Outstanding OTAs stabilizing at around 3 percent of GDP since 2022. - Outstanding shorter-term placements (BTAs) doubled to over CFAF 400 billion (about 1.3 percent of GDP) in 2023; net issuance of BTA has come close to zero in 2024. - Main reason for banks’ dwindling appetite: high sovereign exposure estimated at 34 percent of bank assets. - Cameroonian subscription rates: BTAs estimated at 80 percent in 2024; OTAs subscription rate around 67 percent in 2024. - Policy recommendations: - develop secondary market and broaden investor base (pension funds, insurance companies, collective investment vehicles, web‑based tools for small investors); - improve domestic revenue mobilization and rationalize expenditures; - implement a prudent borrowing plan prioritizing concessional funding and longer maturities; - address high sovereign exposure of local banks. ### Capacity development, data, and governance (selected) - CD portfolio: 92 percent of current spending supports foundational needs—PFM, revenue administration, macroeconomic frameworks, statistics. - Data adequacy: overall shortcomings that somewhat hamper surveillance (Rating C); Monetary and Financial Statistics rated D. - Financial Soundness Indicators publication expected to re‑start soon following reforms at COBAC. - Governance priorities: close governance gaps in transparency and anti‑corruption, bring Cameroon into compliance with EITI, reform audit functions, and strengthen fiscal risk management. ### Staff appraisal and operational recommendations - Macro outlook: economy resilient but political developments have taken a toll; post-election slowdown and fiscal slippages assessed as temporary. - Fiscal policy: keeping deficit within CEMAC targets will preserve sustainability; 2026 budget deficit within CEMAC targets but implementation challenges remain. - Liquidity and borrowing: tight liquidity and high risk of debt distress require cautious borrowing; priority to concessional financing from development partners and a credible multi‑year strategy for borrowing and arrears clearance. - Financial stability: reduce state footprint in regional debt market and strengthen banking-sector safeguards; medium-term objective to reduce state‑ownership in banks. - Fund relations: outstanding credit to the Fund exceeds the 200 percent of quota threshold; staff recommend initiation of a Post Financing Assessment (PFA). - Timing: The next Article IV Consultation is expected to take place within 12 months. *Source: IMF staff report chapter excerpt.* ### 1. Real Sector Developments, 2019– 25 __________________________________________________________ 23 ### 1. Real Sector Developments, 2019– 25 ### Context: macroeconomic setting and recent history - Cameroon has reduced its debt-to-GDP ratio through fiscal consolidation but faces high risk of debt distress driven by liquidity risks from low exports and low fiscal revenues (Text Figure 1). - Imputed gross international reserves at the central bank are around 6 months of imports but fell sharply in the second half of 2025 before partially recovering toward year-end, supported by commercial external borrowing. - Real GDP growth has been hovering between 3-4 percent over the last decade versus the government SND30 objective of 8 percent; per capita growth has lagged the Sub-Saharan Africa (SSA) average (Text Figure 2). - Slow structural reform implementation during two successive Fund arrangements (latest program completed in July 2025) impeded growth potential; SOE governance and PFM reforms remained weak despite IMF capacity development (Annex V, Text Figure 3). - Political instability: over a million Internally Displaced Persons from Anglophone regions and Boko Haram attacks in the North, plus around 500,000 refugees from Central African Republic. Post-October 2025 presidential election unrest followed President Paul Biya securing an eighth term; a new government has yet to be announced and legislative and municipal elections have been postponed. ### Recent economic developments (2019–25): key outcomes - Growth: - Real GDP growth estimated to have slowed to 3.1 percent in 2025 as post-election unrest disrupted trade, services, and investment. - Inflation and monetary policy: - Average inflation eased to 3.4 percent by December 2025, driven by moderating food and transportation prices. - On December 15, the regional central bank (BEAC) raised its policy rate by 25 bps to 4.75 percent amid declining reserve levels. - Fiscal developments: - The fiscal position weakened in 2025, reversing part of prior consolidation. - Preliminary estimates: non‑oil primary balance (NOPB) deteriorated to 2.6 percent of GDP in 2025, exceeding the budget target of 1.4 percent of GDP. - Underperformance in non-oil revenues and slippages in current expenditures more than offset weak capital budget execution. - The arrears stock increased, contrary to the 1 percent of GDP arrears clearance objective in the 2025 budget. - External sector: - Current account deficit expected to have widened to 3.9 percent of GDP in 2025 (from 3.3 percent in 2024), partly reflecting lower oil export receipts. - Net foreign assets (NFA) ended 2025 broadly unchanged relative to 2024 but with significant intra-year volatility and a second-half decline before stabilization supported by external commercial financing. ### Outlook and risks - Short-term projections: - Growth is projected to recover to 3.3 percent in 2026, reflecting higher public investment. - Inflation expected to decline to 2.9 percent in 2026. - Current account deficit forecast to widen to 4.9 percent of GDP in 2026 on the back of lower cocoa prices (could narrow if the recent sharp rise in oil prices lasts over several months). - Medium-term projections: - As mining diversification materializes, growth projected to reach 4.6 percent and the current account deficit to narrow to 3.4 percent of GDP. - Key risks: - Dependence on price-volatile commodity exports. - Fiscal policy challenges and policy uncertainties in the CEMAC region. - Tight liquidity conditions and higher global interest rates could heighten financing risks amid large amortizations due. - Reduced aid may increase budget pressures. - Continued security and climate-related challenges weigh on the growth outlook. - Further weakening of CEMAC’s international reserves could heighten uncertainty and require additional policy adjustments (Annex II). ### Authorities’ views - Authorities forecast 3.7 percent growth in 2025, citing oil sector resilience, and expect 4.9 percent by 2028 driven by oil and mining sectors, electricity transmission and distribution, and transport infrastructure. - Authorities acknowledged risks related to external stability in CEMAC and continued security concerns. ### Policy discussion: priorities to foster growth and reduce fiscal vulnerabilities - Overarching priority: foster growth and reduce fiscal vulnerabilities through stronger domestic revenue mobilization to finance infrastructure and ease borrowing constraints amid heightened liquidity risks to debt sustainability. Address PFM and PIM weaknesses and SOE governance to improve fiscal reporting, spending efficiency, and governance. Enhance financial sector resilience and access, and implement targeted governance reforms to support inclusive growth. Key constraints to long-term sustainable growth - Limited access to finance: - Financial intermediation remains shallow. High sovereign exposure, short loan maturities, and elevated credit risks limit banks’ capacity and incentives to extend long-term credit to SMEs and new firms. - Infrastructure gaps: - Public investment has suffered from budget cuts, efficiency weaknesses, slow project implementation, and governance challenges, including issues related to the re‑nationalization of ENEO. - Regulatory bottlenecks: - Frequent rule changes and overlapping mandates increase uncertainty and compliance costs. Reassessing regulatory provisions limiting private participation in fiber infrastructure could unlock investment in telecom/internet while safeguarding national security. Staff and authorities’ alignment - Authorities generally agreed with staff’s assessment and emphasized priority on improving access to finance (including efforts to strengthen the SME bank), higher public investment to close infrastructure gaps, and industrial and import substitution policies to boost domestic production and reduce dependence on imported agricultural and food goods. ### Strengthening fiscal resilience: findings and staff recommendations - Fiscal trajectory and composition: - The overall deficit (payment order basis) declined from 3.6 percent of GDP before the pandemic to 1.5 percent in 2024, in line with the CEMAC reference target (Text Figure 6). - Tax revenue recovered to pre-pandemic levels, supported by revenue administration reforms, but current expenditure increased, crowding out capital spending. - Despite contracting external commercial loans to pay arrears in 2024, domestic arrears reduction was not achieved. - Financing pressures and liquidity risks: - Large amortizations projected to exceed 6 percent of GDP annually over 2027-31, primarily domestic. - Regional government securities market nearing saturation with weakening demand for Cameroon’s securities. - High bank exposure to sovereign debt limits banks’ direct lending capacity. - Government secured an external bank guarantee for domestic borrowing and an external loan amounting to 0.9 percent of GDP in December 2025 at 10.58 percent effective interest rate. - To address the 2025 arrears increase (around 1 percent of GDP), Cameroon arranged in early 2026 a private placement with a 9.45 percent effective interest rate. - Staff reform principles to underpin fiscal policy (2026 and medium term): - Anchor fiscal policy on the CEMAC reference fiscal deficit of 1.5 percent of GDP to allow a gradual decline in public debt vulnerabilities over the medium term. - Prioritize domestic revenue mobilization to ease liquidity risks and provide resources for scaling up investment. - Scale up public investment relying on concessional financing from development partners; public investment peaked at 3.5 percent of GDP in 2019 but has since under-executed. - Exercise caution against increasing dependence on commercial external budget financing due to higher liquidity risks; allocate scarce budget resources to counterpart funding for development-partner-financed projects. - Phase in scaling up of capital spending over the medium term given limited PFM and PIM capacity to reduce risks from weak project design and cost overruns. - Support the pro-growth reallocation in the 2026 budget toward capital expenditures only if current spending is backed by credible measures and realistic forecasts, including security-related expenditures previously financed off-budget. - Implement a credible medium-term arrears clearance framework urgently (estimated arrears stock of at least 4 percent of GDP by end-2025) within a broader medium-term financing strategy that balances frontloaded arrears clearance benefits against the high costs of commercial external borrowing. - Assessment of the 2026 budget versus staff baseline: - Both the 2026 budget target and staff baseline project a deficit of 1.7 percent of GDP, meeting the CEMAC reference criterion, with a structural deficit below the 1.5 percent ceiling. - Staff baseline assumptions: - Current expenditure in 2026 is higher than in the budget but projected to decline relative to the 2025 outturn due to absence of election-related spending pressures and measures to better control the wage bill. - Revenue projections exclude non-identified measures in the 2026 budget but reflect recovery from the weak 2025 outturn and policy and administrative measures. - Lower capital spending is assumed relative to the budget, reflecting more realistic execution rates. - The budget’s financing composition tilts toward external commercial financing, whereas staff baseline relies more on project financing from development partners. *IMF staff summary based on "1. Real Sector Developments, 2019– 25" (Cameroon, IMF Country Report content).* ### 14. Over the medium term, baseline projections preserve a broadly neutral fiscal stance ### 14. Over the medium term, baseline projections preserve a broadly neutral fiscal stance ### Medium-term fiscal stance and projections - Projected improvement in the overall balance of about 0.5 percent of GDP over 2026-31 reflects mainly a declining interest bill, while the primary balance remains broadly unchanged. - In the medium term, tax revenue is projected to rise by about 0.3 percent of GDP annually. - Tax incentives and exemption schemes currently account for close to 2 percent of GDP according to the government’s tax expenditure report; some cuts complemented by revenue administration and tax policy measures could help achieve the projected revenue rise. - Further fiscal adjustment may be required if funding falls short of targets or if stabilizing regional reserves becomes urgent; excessive near-term tightening could derail growth. - Measures to achieve investment-friendly fiscal consolidation include: - sustained non-oil domestic revenues mobilization, - stricter commitment controls and sounder PIM, - deepening of the domestic debt market, - automatic fuel price adjustments. - Where warranted, fiscal tightening would help moderate pressure on BEAC’s international reserves without relying on commercial external borrowing. ### Authorities’ views on fiscal stance and investment space - Authorities remain committed to fiscal discipline and the CEMAC reference fiscal balance criterion. - They viewed the fiscal setback in 2025 as temporary, reflecting election-related disruptions; revenue projections to be reassessed once 2026Q1 revenue outturns become available. - Preference for containing current spending while protecting and increasing capital expenditure; authorities emphasized preserving sufficient fiscal space to finance priority infrastructure investment needed to escape the low growth and high debt risk trap. - Noted intention to continue external commercial borrowing to fund critical investments given tight liquidity, while concessional financing remains preferred pending availability and flexibility. - Authorities agreed on the need to prevent accumulation of new arrears and emphasized urgency in resolving the backlog of arrears; external commercial borrowing was justified to clear arrears in early 2026 given very tight late-2025 liquidity. ### Decomposition of the increase in non-oil tax revenue in 2026 (Text Table 3) - Non‑oil tax revenue, 2025: CFAF 3,895 (11.3 percent of GDP) - Impact of nominal economic growth: CFAF 166.2 (0.5 percent of GDP) - Revenue measures (net): CFAF 52.9 (0.1 percent of GDP) - Positive measures: CFAF 61.4 (0.2 percent of GDP) — Excises, VAT base changes, digital economy taxation, base-broadening; real-time taxation, e‑invoicing, production tracking; withholding on government spending, international recovery, other admin - Negative measures: CFAF -8.5 (0.0 percent of GDP) — Forestry fund, disability inclusion, youth employment, PIT reliefs - Recovery effects: CFAF 217 (0.6 percent of GDP) — Rebound from weak 2025, base and compliance effects - Non‑oil tax revenue, 2026 (projection): CFAF 4,331 (12.1 percent of GDP) ### Mobilizing non-oil revenue - Central government tax-to-GDP ratio stands at 12 percent; increases to around 14 percent when revenues collected by local governments following decentralization reforms are included. - Revenue shortfall relative to peers is primarily associated with weaker income taxation; taxes on goods and services perform closer to regional norms but still offer scope for efficiency-enhancing reforms. - Near-term priorities: - reducing tax expenditures, - advancing digitalization, - preventing buildup of VAT refund arrears, - legal amendments to eliminate obsolete or expired VAT exemptions and tax incentives, - extending e‑invoicing and improving system integration. - Medium-term measures: - broadening the tax base, - limiting VAT exemptions to essential goods and services and phasing out remaining VAT tax incentives, - advancing income tax reforms, - piloting property tax modernization, - stronger data-sharing across government entities. - Authorities concurred with phasing of revenue reforms and highlighted recent increases in taxpayers and use of digital technologies; modernizing income and property taxation will be complemented by IMF CD. ### Advancing fuel subsidy reform - Fiscal cost of fuel subsidies declined from about 4 percent of GDP in 2022 to below 1 percent in 2024. - Introducing an automatic pricing mechanism would reduce fiscal risks; prerequisites include closing the gap between administered prices and cost‑recovery prices and a thorough review of the pricing formula. - Social protection: - Expanding coverage and improving benefit adequacy of the existing social safety net is key to successful fuel subsidy reform. - Revamping social safety nets is under way with World Bank support. - Available fiscal space for compensating the most vulnerable is limited; transfers should be time-bound and designed to maximize efficiency. - Establishing a dedicated budget line for social assistance is key to predictable financing and effective implementation. - Authorities recognize merits of automatic pricing mechanism but raised concerns about political and social consequences of volatile fuel prices; reforms are under way to eliminate windfall gains for importers and settle outstanding arrears owed to importers. ### Reducing fiscal risks from SOEs - SOEs face weak oversight and governance frameworks, significant operational and fiscal risks: - Only a few SOEs release financial reports; - Several SOEs face large recapitalization needs, heavy debt burdens, unpaid bills from the central government, and complex cross debts. - Staff recommendations: - strengthen oversight mechanisms, - revamp governance structures, - provision sufficient funds to mitigate fiscal risks. - National Investment Company (SNI) creation delayed reforms and poses coordination challenges; overlaps competencies with Ministry of Finance in financial oversight, risk consolidation, and strategic steering of public enterprises. - To mitigate risks: separation of roles, strict reporting obligations, and centralized control of fiscal risk analysis within Ministry of Finance are essential. - Authorities view SNI as distinguishing State ownership role from regulatory/shareholder oversight; delays in operationalizing SNI are being addressed and authorities requested IMF CD to ensure clear delineation with the Ministry of Finance. ### Improving Public Financial Management (PFM) and Public Investment Management (PIM) - Progress achieved: - reducing common chapters and converting them into transparent budget allocations, - containing spending through exceptional procedures, - implementing commitment to transfer SNH revenues to the central budget and halting direct interventions. - Remaining challenges: - Better alignment of procurement, commitment, and cash plans to improve commitment control and cash management. - Bring COLEPS purchase orders below CFAF 5 million (which grew to 30 percent of total procurement) into the digital procurement system. - Reform practices that assume liabilities excluded from budgetary and treasury processes and recognized only as amortization upon maturity. - Treasury Single Account (TSA): - Implementation has experienced significant delays due to technical challenges related to interoperability of international payment systems, national treasuries, and BEAC platforms. - BEAC aims to complete required technical and institutional preparations by mid-2026. - Migration of public deposits from commercial banks needs to be sequenced to preserve banking‑system liquidity. - Essential to complete and update reconciliation of correspondent accounts. - Public Investment Management: - Backlog of committed but undisbursed balances (SENDs) remains large—at about 15 percent of GDP in 2025—reflecting cumbersome procedures, inadequate project preparation, weak incentives, and execution bottlenecks. - Given limited progress since 2017, staff urge authorities to either cancel or reactivate projects and ensure proper budget integration. - Further streamlining procurement and integrating it with budget execution and project monitoring systems is essential. - Authorities agreed with proposed reforms, emphasized capacity constraints, and noted commitment ceilings and recent CEMAC Heads of State commitment to complete TSA reform; improving performance-based monitoring of project execution to clear SENDs backlog. ### Maintaining debt sustainability, external stability, and Fund repayment capacity - Cameroon remains at high risk of external and overall debt distress, although debt is assessed as sustainable over the medium term. - Public debt: 43.4 percent of GDP at end-2024. - Debt-carrying capacity upgraded to medium; two out of four external debt indicators continue to breach thresholds, indicating persistent liquidity risks. - PV of public debt-to-GDP remains below the benchmark throughout the projection horizon, indicating improved solvency conditions. - Sovereign bond spreads have declined but continue to signal residual market pressures; debt service indicators relative to exports remain elevated. - External position in 2025 assessed as moderately weaker than implied by fundamentals and desirable policies: - REER appreciated by 3.7 percent in 2024 relative to 2023 and estimated to have strengthened further in 2025. - EBA-lite Current Account model assesses the real exchange rate in 2025 to be overvalued by 14.2 percent. - Key reforms to strengthen external competitiveness: complete electricity transmission projects, upgrade road network, tackle regulatory obstacles in the telecom sector. - Capacity to Repay (CtR) the Fund: - Adequate but subject to significant risks due to high credit exposure to the Fund and large repayments over coming years. - Outstanding credit to the Fund peaked at about 3 percent of GDP in 2024 and is projected to decline gradually over the medium term. - Annual obligations projected to peak at about 2.6 percent of revenues and 3.2 percent of exports in 2027, and 6.7 percent of gross reserves in 2028. - With Cameroon’s credit outstanding exceeding the PFA threshold of 200 percent of Cameroon’s quota, PFA is warranted for closer monitoring. - Staff recommendations: continued reforms, strict limits on non-concessional borrowing, and further strengthening of the medium-term debt management strategy. - Authorities concurred with staff’s assessment and noted efforts to improve data quality and tax reforms to ease liquidity risks. ### Enhancing financial policy to support stability and growth - Structural weaknesses and risks: - Financial sector remains shallow, reinforcing sovereign-bank linkages and amplifying risks to financial stability. - Banks’ holdings of government securities increased from 9.5 percent of assets at end-2015 to 32 percent of assets as of June 2025; several banks hold more than half of assets in CEMAC government claims. - Private-sector credit has declined as a share of total bank assets; private lending remains dominated by short-term, high-cost loans to large firms, limiting access for SMEs and households. - Continued elevated nonperforming loan ratio in 2025 and data weaknesses hamper financial sector surveillance. - Recommendations to mitigate banking sector risks: - gradual reduction of sovereign exposure, - stronger application of prudential standards and consistent regional enforcement, - develop secondary debt market and encourage non-bank government financing, - capacity building in banking supervision. - Public sector participation in banking: - State now holds majority stakes in eight out of nineteen banks following bailouts and acquisitions, increasing governance and fiscal risks. - Staff recommend a robust regulatory framework with clear rules for government oversight and management of state-owned banks, enhanced monitoring, restructuring, and resolution plans, and prioritizing divestment where feasible. - Authorities requested IMF CD for this area. - AML/CFT and FATF grey listing: - Cameroon placed on FATF grey list of jurisdictions with strategic AML/CFT weaknesses; grey listing undermines investor and banking confidence and increases costs. - Supported by IMF CD, Cameroon has taken steps to strengthen implementation of targeted financial sanctions and oversight of non-financial sectors and non-profit organizations. - Further steps: enhance capacity of investigative and prosecutorial bodies and improve beneficial ownership transparency. - Financial inclusion and market development: - Near-term priorities: implement credit registries, operationalize guarantee mechanisms, expand alternative financing instruments. - Progress noted: region’s first credit reference bureau, “blacklisting” of defaulters, digitizing land registry, training commercial judges. - Medium-term objective: improve bank soundness (regional authorities) and diversify financing sources beyond banks, including capital market and nonbank instruments. *Source: IMF staff report chapter excerpt.* ### 37. The authorities agreed with the staff’s assessment, particularly regarding the crowding ### Authorities’ Views, Fund Relations, and Staff Appraisal (excerpt) ### Banking sector, credit, and state ownership - Authorities agree with the staff assessment on crowding out of private credit and note combined causes: - crowding out from public sector financing demands; and - structural weaknesses, including difficulties in producing collateral and lack of bankable projects. - Government position on public ownership of banks: - involvement is temporary to allow for sound restructuring and recapitalization of ailing banks, restore profitability, and eventually divest. - to diversify the investor base, reforms have been initiated (with support from BEAC) to replicate Nigeria’s success with a secondary market, including digital platforms for individual investors. - Authorities’ confidence that Cameroon will be removed from the “grey list” at the next FATF assessment. ### Governance, transparency, and anti‑corruption (Macro‑critical policies) - Key priorities and assessments: - Closing governance gaps in transparency and anti‑corruption and fiscal risks management is critical to strengthen credibility and sustain more inclusive growth. - Addressing weaknesses in the asset declaration and anti‑corruption frameworks should be a priority in line with the 2023 Governance Diagnostic Report. - Continued efforts required to bring Cameroon into compliance with Extractive Industries Transparency Initiative (EITI) standards, including systematic publication of extractive contracts. - Audit and oversight reforms: - Recommendation in the Governance Diagnostic Report to reform audit functions by upgrading the audit bench into an independent agency would require a constitutional change; however, revisions to the law could strengthen collaboration requirements of government agencies during audits. - Fiscal risk management gaps: - Governance challenges extend to fiscal risk management, including pension sustainability and oversight of public‑sector liabilities beyond the central government. - While progress has been made in identifying these risks, further institutionalization is needed. ### Resilience and Sustainability Facility (RSF) follow‑up and climate/forestry reforms - Progress and gaps: - Progress has been made in strengthening the institutional framework for green finance through ongoing accreditation for two entities (FEICOM and CAA). - Progress in implementation of the National Adaptation Plan is supporting a robust climate‑policy track record. - The forestry management information system (SIGIF2) is advancing but not yet fully functional, with export‑module integration and interconnection pending. - Authorities’ views and commitments: - Authorities concur with governance and RSF follow‑up assessment. - Once ongoing renegotiation of extractive industries' contracts is completed, they will be published in line with EITI requirements. - Government plans to mandate regulatory fees and penalties be paid through the digital payment system to advance governance for the private sector. - Authorities are committed to completing the few remaining SIGIF2 system components. ### Fund relations, capacity development (CD), and data quality - IMF CD: - Integrating CD with the authorities’ objectives will be key to sustaining progress (Annex IV). - IMF CD has been well prioritized on policy‑relevant areas, including PFM, revenue administration, and statistics. - Planned CD reflecting evolving priorities: ownership of publicly owned banks, debt management, financial sector oversight and external sector statistics. - Data adequacy: - Cameroon’s data adequacy for surveillance is assessed as having some shortcoming that somewhat hamper surveillance (Rating C; Annex VI). - National accounts and price data assessed as broadly adequate, but additional efforts needed to meet coverage requirements and ensure timely dissemination. - Safeguards and institutional governance: - Implementation of 2022-23 safeguards recommendations has been slow; efforts are needed to strengthen internal audit and risk management practices. - BEAC is taking steps to improve governance, including onboarding new members of senior management and the Board, and enhancing the delegation framework for executive management decision‑making. - Authorities’ views on data: - Authorities broadly agreed with assessments on data quality. - PFM reforms are expected to improve government finance statistics, supported by IMF TA. - Deepening understanding of informal exports will improve analysis in the DSA and External Stability Assessment. - Publication of Financial Soundness Indicators expected to re‑start soon thanks to reforms at COBAC. ### Staff appraisal: macro outlook, fiscal stance, and risks - Political and macro outlook: - Cameroon’s economy has shown considerable resilience; outlook is overall favorable, but political developments have taken a toll. - Post‑election economic growth slowdown and fiscal slippages are assessed as temporary; delays in announcing a new government and postponement of elections are prolonging political uncertainty. - Projected moderate acceleration of growth over the medium term is driven by investment projects in mining and an electricity transmission project expected to ease electricity shortages. - Fiscal policy and public debt: - Keeping Cameroon’s fiscal deficit within the CEMAC fiscal targets will preserve fiscal sustainability and strengthen economic stability in the CEMAC region. - Cameroon’s 2026 budget deficit is within the CEMAC fiscal targets, signaling restoration of fiscal discipline after 2025 election‑related slippages. - Some budget assumptions are rather optimistic; budget implementation will be challenging and will require commitment control and continued efforts to strengthen domestic revenue mobilization. - Structural risks to the fiscal deficit include fiscal risks from SOEs whose reform has been delayed by institutional changes in SOE oversight. - Liquidity, investment, and borrowing strategy: - Despite past fiscal consolidation, tight liquidity constrains Cameroon’s ability to boost growth. - Infrastructure bottlenecks require revamping capital expenditures that were crowded out by recurrent spending overruns. - High risk of debt distress, reflecting liquidity risks and saturation of the domestic debt market, requires a cautious approach to borrowing. - Priority should be given to capital project financing from development partners to scale up public investment. - Ad hoc external borrowing at commercial terms to ease pressure from rising government arrears should be replaced by a credible, multi‑year strategy for borrowing and arrears clearance. - Public investment and PFM: - Improving public financing and investment management is essential to preserve fiscal sustainability and achieve desired impact of scaling up investment on growth. - Better use of available resources from development partners requires significant improvements in managing projects that have suffered from slow implementation. - Incomplete reporting of off‑budget spending continues to hamper fiscal reporting despite some PFM reforms introduced with the 2026 budget. - Financial stability and banking sector reforms: - Strengthening the banking sector and reducing the state’s footprint in the regional debt market are critical to ensure financial stability. - Addressing banking sector vulnerabilities requires reinforcing regulatory safeguards and promoting financial sector stability. - As government involvement has increased, a clear governance framework is essential to oversee state‑owned banks to mitigate fiscal and operational risks. - Over the medium term, the government should pursue its intention to reduce state‑ownership in banks. - Efforts should also focus on resolving nonperforming assets and address protracted delays in FSI publication. - Governance and external standards: - Progress in addressing governance challenges has been mixed. - Digitalization of revenue administration improved governance with positive private sector feedback. - Completing ongoing forestry reforms will enhance climate policy, data collection, and transparency. - Accelerating reforms to be removed from the FATF grey list and restoring EITI membership should be a priority, along with improvements in the external audit function and asset declaration of senior government officials. - Fund operational recommendations and timing: - Given that outstanding credit to the Fund exceeds the 200 percent of quota threshold, staff recommend initiation of a Post Financing Assessment (PFA). - The next Article IV Consultation is expected to take place within 12 months. ### Monetary and financial developments (selected observations) - BEAC raised the policy rate in December 2025. - Financial conditions remained tight, reflected in an upward shift of the yield curve. - Excess liquidity continued to decline while broad money kept expanding, driven by higher deposits. - Banks’ exposure to the sovereign continued to increase (measured as loans and securities, percent of total assets, without risk weights). *Italic: Excerpt derived from the source PDF content.* ### 3.5 Year ### 3.5 Year ### National accounts and inflation - GDP at constant prices (annual percent change): 3.5 (2024 est.), 3.1 (2025), 3.3 (2026), 3.8 (2027), 4.2 (2028), 4.3 (2029), 4.4 (2030), 4.6 (2031). - Oil GDP at constant prices (annual percent change): -9.7, -7.2, 0.8, -4.3, 10.6, 4.3, 3.7, 3.0. - Non-Oil GDP at constant prices (annual percent change): 3.8, 3.3, 3.4, 3.9, 4.1, 4.3, 4.5, 4.6. - GDP deflator (annual percent change): 5.4, 3.4, 0.9, 1.9, 3.1, 2.7, 2.7, 2.4. - Consumer prices (average): 4.5, 3.4, 2.9, 2.6, 2.5, 2.5, 2.5, 2.5. - Consumer prices (eop): 5.0, 2.5, 2.5, 2.3, 2.1, 2.1, 2.1, 2.1. ### Money and credit - Broad money (M2), annual percent change: 9.6, 13.4, 6.9, 6.3, 8.5, 7.1, 7.3, 7.1. - Net foreign assets (percent of broad money at beginning of period): 2.7, 6.5, 3.8, 1.7, 4.1, 5.4, 5.5, 8.6. - Net domestic assets (percent of broad money at beginning of period): 6.9, 6.9, 3.0, 4.6, 4.5, 1.7, 1.7, -1.5. - Domestic credit to the private sector (annual percent change): 12.3, 11.2, 11.7, 12.2, 13.5, 14.2, 14.5, 14.3. - Credit to the private sector (in percent of GDP): 15.9, 16.6, 17.8, 18.8, 19.9, 21.2, 22.7, 24.2. ### Savings and investment - Gross national savings (percent of GDP): 15.6, 14.8, 14.2, 14.1, 14.9, 15.5, 15.8, 16.3. - Gross domestic investment (percent of GDP): 18.9, 18.7, 19.3, 19.5, 19.7, 20.0, 20.2, 20.3. - Public investment (percent of GDP): 5.4, 6.0, 6.9, 7.4, 7.7, 8.2, 8.5, 8.9. - Private investment (percent of GDP): 13.5, 12.6, 12.5, 12.1, 12.0, 11.8, 11.6, 11.4. ### Central government operations (CFAF billion) - Total revenue and grants (2024–31): 5,026 (2024), 4,905 (2025), 5,329 (2026), 5,721 (2027), 6,271 (2028), 6,839 (2029), 7,482 (2030), 8,219 (2031). - Total revenue: 4,941 (2024), 4,817 (2025), 5,255 (2026), 5,679 (2027), 6,251 (2028), 6,819 (2029), 7,462 (2030), 8,199 (2031). - Oil sector revenue: 689, 567, 524, 547, 595, 634, 683, 745 (2024–31). - Non-oil sector revenue: 4,252, 4,250, 4,731, 5,132, 5,656, 6,185, 6,780, 7,454 (2024–31). - Total expenditure: 5,514 (2024), 5,598 (2025), 5,943 (2026), 6,256 (2027), 6,784 (2028), 7,377 (2029), 8,059 (2030), 8,799 (2031). - Current expenditure: 4,187, 4,341, 4,426, 4,605, 4,889, 5,186, 5,488, 5,733 (2024–31). - Wages and salaries: 1,523, 1,611, 1,625, 1,706, 1,805, 1,912, 2,041, 2,184. - Goods and services: 1,349, 1,498, 1,436, 1,512, 1,589, 1,688, 1,763, 1,895. - Subsidies and transfers: 918, 870, 832, 885, 952, 1,015, 1,079, 1,166. - Interest: 397, 362, 533, 502, 543, 571, 605, 488 (external: 252, 254, 308, 264, 300, 326, 337, 196; domestic: 146, 109, 225, 238, 243, 245, 268, 292). - Capital expenditure: 1,326, 1,257, 1,516, 1,651, 1,895, 2,191, 2,571, 3,067 (domestically financed investment: 698, 780, 824, 871, 941, 1,043, 1,134, 1,230; foreign-financed investment: 500, 417, 599, 684, 857, 1,050, 1,337, 1,734). - Overall balance (payment order basis) excluding grants: -573 (2024), -781 (2025), -688 (2026), -576 (2027), -533 (2028), -558 (2029), -597 (2030), -600 (2031). - Overall balance (payment order basis) including grants: -488, -693, -614, -535, -513, -538, -577, -580 (2024–31). - CEMAC reference fiscal balance: -451, -469, -492, -552, -613, -664, -715, -741 (2024–31). - Primary balance (payment order basis, incl. grants): -90, -330, -81, -34, 30, 33, 28, -93 (2024–31). ### Central government financing (CFAF billion) - Overall balance including grants (cash basis): -423 (2024), -328 (2025), -614 (2026), -535 (2027), -951 (2028), -976 (2029), -1,015 (2030), -1,019 (2031). - Financing total: 423, 328, 614, 535, 951, 976, 1,015, 1,019 (2024–31). - Net external financing: 389, 408, 598, 538, 654, 878, 900, 1,352. - Gross external borrowing: 1,066, 1,028, 1,142, 1,162, 1,234, 1,439, 1,589, 1,987. - Multilateral institutions (excluding IMF): 598, 554, 608, 678, 823, 982, 1,220, 1,549. - Commercial, private: 442, 402, 432, 367, 264, 278, 141, 142. - Bilateral: 26, 72, 102, 117, 146, 179, 228, 296. - Amortizations and repayments: -677, -620, -544, -625, -580, -561, -689, -636. - Net domestic financing: 122, -53, 16, -2, 297, 98, 114, -333. - Gross domestic financing: 1,357, 1,832, 2,218, 1,942, 2,233, 2,110, 2,155, 1,834. - Amortizations, repayments, and other build-up of financial assets: 1,235, 1,885, 2,202, 1,945, 1,936, 2,012, 2,041, 2,167. - Net issuances of BTA (T-bills): 36, 71, 143, 153, 264, 199, 247, 100. - Gross issuances of BTA: 899, 970, 1,113, 1,266, 1,530, 1,729, 1,976, 2,076. - Amortizations of BTA: 863, 899, 970, 1,113, 1,266, 1,530, 1,729, 1,976. - Net issuances of OTA (T-bonds): 133, 89, 215, 155, 264, 158, 84, 100. - Gross issuances of OTA: 282, 351, 768, 543, 483, 283, 144, 160. - Amortizations of OTA: 149, 262, 553, 388, 219, 125, 60, 60. - Stock of floats and arrears (memorandum): 1,387 (2024), 1,752 (2025), 1,752 (2026), 1,752 (2027), 1,314 (2028), 876 (2029), 438 (2030), 0 (2031). ### Central government operations (percent of GDP) - Total revenue and grants: 15.6, 14.2, 14.8, 15.1, 15.4, 15.6, 15.9, 16.4 (2024–31). - Total expenditure: 17.1, 16.3, 16.5, 16.5, 16.6, 16.9, 17.2, 17.5. - Overall balance (payment order basis) excluding grants (percent of GDP): -1.8, -2.3, -1.9, -1.5, -1.3, -1.3, -1.3, -1.2. - Overall balance (payment order basis) including grants (percent of GDP): -1.5, -2.0, -1.7, -1.4, -1.3, -1.2, -1.2, -1.2. - Overall balance including grants (cash basis, percent of GDP): -1.3, -1.0, -1.7, -1.4, -2.3, -2.2, -2.2, -2.0. - Financing (percent of GDP): 1.3, 1.0, 1.7, 1.4, 2.3, 2.2, 2.2, 2.0. ### Balance of payments (CFAF billion and percent of GDP) - Current account balance: -1,056 (2024), -1,341 (2025), -1,854 (2026), -2,060 (2027), -1,940 (2028), -2,009 (2029), -2,030 (2030), -2,033 (2031). - Trade balance: -593, -896, -1,410, -1,648, -1,527, -1,620, -1,687, -1,863 (2024–31). - Exports, goods: 4,121, 3,812, 3,331, 3,273, 3,627, 3,803, 4,185, 4,476. - Oil and oil products: 1,406, 1,140, 1,080, 719, 795, 772, 1,009, 1,094. - Non-oil sector: 2,716, 2,672, 2,251, 2,554, 2,832, 3,030, 3,177, 3,382. - Imports, goods: -4,714, -4,708, -4,742, -4,921, -5,154, -5,423, -5,872, -6,339. - Services (net): -363, -369, -354, -368, -381, -403, -417, -451 (exports services: 1,095, 1,174, 1,269, 1,351, 1,441, 1,529, 1,642, 1,744; imports services: -1,458, -1,542, -1,623, -1,719, -1,821, -1,932, -2,060, -2,195). - Income (net): -671, -619, -670, -624, -663, -670, -672, -533 (of which: interest due on public debt: -252, -254, -308, -264, -300, -326, -337, -196). - Transfers (net): 570, 542, 580, 580, 630, 684, 746, 815 (inflows: 805, 791, 839, 854, 918, 983, 1,054, 1,130; outflows: -235, -249, -259, -274, -288, -299, -309, -315). - Capital and financial account balance: 1,040, 1,167, 1,647, 1,642, 1,814, 2,100, 2,186, 2,701. - Official capital: 389, 408, 598, 538, 654, 878, 900, 1,352. - Borrowing: 1,066, 1,028, 1,142, 1,162, 1,234, 1,439, 1,589, 1,987. - Amortization: -677, -620, -544, -625, -580, -561, -689, -636. - Overall balance: 328, -174, -207, -418, -126, 90, 156, 68. - Gross Reserves Accumulation (without RSF) (+ = decrease): -321, 190, 329, 559, 255, 35, -45, -586. - Oil price ($US per barrel): 79.2, 67.7, 64.7, 62.9, 63.4, 64.4, 65.2, 65.5 (2024–31). - Current account balance (percent of GDP): Including grants: -3.3, -3.9, -5.2, -5.4, -4.8, -4.6, -4.3, -4.0; Excluding grants: -3.6, -4.0, -5.3, -5.5, -4.8, -4.6, -4.4, -4.1. ### Monetary survey (CFAF billion) - Net foreign assets: 2,777 (2024), 3,378 (2025), 3,782 (2026), 3,975 (2027), 4,460 (2028), 5,162 (2029), 5,929 (2030), 7,209 (2031). - BEAC: 1,759, 1,748, 1,541, 1,123, 996, 1,087, 1,243, 1,911. - BEAC foreign assets: 3,251, 3,179, 2,849, 2,290, 2,035, 2,000, 2,045, 2,631. - IMF credit (BEAC counterpart): -919, -930, -808, -667, -539, -413, -302, -220. - Net domestic assets: 6,481, 7,125, 7,442, 7,953, 8,486, 8,705, 8,944, 8,727. - Domestic credit: 7,594, 8,342, 9,154, 9,998, 11,264, 12,563, 14,075, 15,394. - Net claims on public sector: 2,383, 2,570, 2,715, 2,782, 3,075, 3,212, 3,369, 3,162. - Credit to the private sector: 5,142, 5,716, 6,382, 7,158, 8,126, 9,281, 10,629, 12,147. - Other items (net): -1,112, -1,218, -1,712, -2,044, -2,778, -3,858, -5,130, -6,667. - Broad money: 9,259, 10,502, 11,223, 11,928, 12,946, 13,866, 14,874, 15,936. - Currency outside banks: 2,054, 2,256, 2,401, 2,542, 2,745, 2,929, 3,131, 3,343. - Deposits: 7,205, 8,246, 8,823, 9,387, 10,201, 10,937, 11,743, 12,593. - Broad money (annual percent change): 9.6, 13.4, 6.9, 6.3, 8.5, 7.1, 7.3, 7.1. - Velocity (GDP/average M2): 3.5, 3.3, 3.2, 3.2, 3.2, 3.2, 3.2, 3.2. ### Financial soundness indicators (banking sector, percent) - Total bank regulatory capital to risk-weighted assets: 10.8 (2018), 10.8 (2019), 13.8 (2020), 14.2 (2021), 15.0 (2022), 15.3 (2023). - Total capital (net worth) to assets: 5.0, 5.1, 6.5, 6.5, 6.7, 6.6 (2018–23). - Non-performing loans (gross) to total loans (gross): 14.8, 14.7, 15.8, 14.1, 13.0, 12.9 (2018–23). - Return on equity (ROE): 15.5, 17.6, 13.5, 12.7, 17.2, 19.2 (2018–23). - Return on assets (ROA): 1.8, 2.1, 1.8, 1.7, 2.3, 2.4 (2018–23). - Liquid assets to total assets: 26.4, 26.1, 30.1, 30.3, 31.4, 28.5 (2018–23). - Gross loan (banks' book, bn FCFA): 3,738, 3,815, 4,104, 4,566, 4,961, 5,612 (2018–23). - Foreign-currency-denominated loans to total loans: 1.0, 0.8, 0.5, 0.1, 0.1, 0.1 (2018–23). - Foreign-currency-denominated liabilities to total liabilities: 4.2, 4.8, 1.9, 2.1, 5.8, 7.6 (2018–23). ### Capacity to repay the Fund (SDR and CFAF projections, 2024–36) - Principal repayments (SDR millions): 63.5 (2024), 96.6 (2025), 159.2 (2026), 184.0 (2027), 166.2 (2028), 162.5 (2029), 144.1 (2030), 105.5 (2031), 76.1 (2032), 54.0 (2033), 29.4 (2034), 19.9 (2035), 12.1 (2036). - Charges and interest (SDR millions): 32.0 (2024), 28.3 (2025), 28.3 (2026), 27.4 (2027), 26.2 (2028), 24.5 (2029), 22.5 (2030), 20.3 (2031), 18.4 (2032), 17.0 (2033), 16.2 (2034), 15.6 (2035), 15.2 (2036). - Total obligations based on existing and prospective credit (SDR millions): 95.8 (2024), 126.6 (2025), 169.4 (2026), 193.9 (2027), 175.7 (2028), 171.4 (2029), 152.3 (2030), 112.8 (2031), 82.7 (2032), 60.1 (2033), 35.3 (2034), 25.5 (2035), 17.6 (2036). - Total obligations (CFAF billions): 77.1, 99.3, 129.6, 148.9, 135.5, 132.4, 117.9, 87.4, 64.0, 46.6, 27.3, 19.8, 13.6 (2024–36). - Outstanding IMF credit based on existing and prospective drawings (SDR millions): 1,206.1 (2024), 1,233.7 (2025), 1,057.3 (2026), 873.3 (2027), 707.1 (2028), 544.6 (2029), 400.4 (2030), 294.9 (2031), 218.9 (2032), 164.9 (2033), 135.5 (2034), 115.6 (2035), 103.5 (2036). - Net use of Fund credit (SDR millions): 115.9 (2024), 27.6 (2025), -176.4 (2026), -184.0 (2027), -166.2 (2028), -162.5 (2029), -144.1 (2030), -105.5 (2031), -76.1 (2032), -54.0 (2033), -29.4 (2034), -19.9 (2035), -12.1 (2036). - Memorandum items: Nominal GDP (CFAF billions): 32,316 (2024), 34,445 (2025), 35,917 (2026), 37,983 (2027), 40,833 (2028), 43,742 (2029), 46,920 (2030), 50,261 (2031), 52,908 (2032), 56,593 (2033), 60,453 (2034), 64,448 (2035), 68,603 (2036). - Government revenue (CFAF billions, 2024–35): 5,026, 4,905, 5,329, 5,721, 6,271, 6,839, 7,482, 8,219, 8,502, 9,185, 9,914, 10,639, 11,926. - Gross reserves (CFAF billions): 3,251, 3,179, 2,849, 2,290, 2,035, 2,000, 2,045, 2,631, 2,292, 1,981, 1,698, 1,343, 1,091. - CFAF per SDR (period average): 804.8, 783.8, 764.9, 767.7, 771.0, 772.4, 774.1, 774.1, 774.1, 774.1, 774.1, 774.1, 774.1. - Quota (in SDRs): 276,000,000. *Source: Country authorities; and IMF staff estimates and projections.* ### Annex I. External Sector Assessment ### Annex I. External Sector Assessment ### Overall assessment - Cameroon’s external position in 2025 was assessed to be moderately weaker than implied by fundamentals and desirable policies. - The current account improved in 2024 due to higher non-oil export prices but is projected to deteriorate over the medium term amid subdued export volumes and weak commodity prices. - Cameroon’s net liability position has risen in recent years; given the high risk of debt distress—driven in particular by elevated debt-service obligations—continued fiscal prudence and accelerated structural reforms are needed to support a strengthening of the current account toward a level consistent with fundamentals and appropriate policies. ### Foreign assets and liabilities: position and trajectory - NIIP as of end-2023: -32.7 percent of GDP (deteriorated from -30.9 percent of GDP in 2022). - Gross foreign assets: 29.5 percent of GDP (largest shares: nonfinancial private sector assets and reserve assets). - Gross foreign liabilities: 62.2 percent of GDP (largest shares: public debt and foreign direct investment (FDI)). - Debt assets: 19.0 percent of GDP. - Debt liabilities: 45.8 percent of GDP. - Over the last five years, Cameroon’s net liability position increased by 7.6 percentage points of GDP, attributed to both accumulation of financial account flows and valuation effects. - Assessment: NIIP is assessed to be sustainable, but the large share of debt liabilities raises risks to external sustainability (Cameroon is at high risk of debt distress). Further efforts to strengthen public debt management and limit non-concessional borrowing remain critical. ### Current account - 2024 current account balance: -3.3 percent of GDP (improved from -4.1 percent). - 2025 projected current account deficit: around -3.9 percent of GDP. - Medium-term projection: after a further increase in 2026, the current account deficit is projected to stabilize around -4 percent of GDP. - Outlook risks: intensification of regional conflicts, commodity price volatility, and limited export diversification. - Long-term resilience depends on implementation of SND30 measures to boost domestic production capacity and diversify exports, and on opportunities from AfCFTA. - Model-based assessment for 2025: - EBA-Lite CA model: CA norm of -2.9 percent of GDP; cyclically adjusted CA of -4.7 percent of GDP; implied CA gap of -1.8 percent of GDP under current policies. - Policy gap: assessed at 3.9 percent of GDP, driven by: - Tighter fiscal policy: +2.1 percent of GDP - Lower public health spending: +1.6 percent of GDP - Change in reserves: +0.8 percent of GDP - Slower credit growth: +0.1 percent of GDP - EBA-Lite REER model: CA gap of -0.8 percent of GDP (corresponding to a REER gap of 6.2 percent). - Staff judgment: given persistent CA deficit and model reliability considerations, the CA gap is estimated based on the CA model; external position assessed to be modestly weaker than warranted in 2025 (gap within range of -2 to -1 percent). ### Real exchange rate (REER) - CPI-based REER appreciated by 3.7 percent in 2024 relative to 2023 (driven by broadly unchanged EUR/USD nominal rate and higher domestic inflation). - 2025 REER estimated to have appreciated further, driven by euro strengthening against U.S. dollar amid elevated trade tensions. - Longer-term: REER broadly stable since the 1994 devaluation, with annual fluctuations generally below 10 percent. - Model estimates for 2025: - EBA-lite CA model: REER gap of 14.2 percent (staff judges REER overvalued by about 14.2 percent based on CA model). - REER Index model: gap of 6.2 percent. - Staff view: REER overvaluation assessed at about 14.2 percent (CA model basis). ### Capital and financial accounts: flows and policy measures - 2024 net medium-to-long term capital inflows: 2.8 percent of GDP (up from 0.9 percent of GDP in previous year), largely reflecting the Eurobond private placement in July 2024. - Net FDI inflows in 2024: about 1.6 percent of GDP (declined from roughly 2 percent of GDP in earlier years), amid heightened perceptions of political risk. - Projection: FDI inflows projected to recover modestly to about 1.8 percent of GDP by 2026. - Risks to outlook: subdued capital inflows due to debt sustainability concerns and fragile recovery; shifts in advanced-economy monetary policy could weigh on portfolio inflows. - Policy implications: maintain fiscal consolidation and steadily implement structural reforms to improve the business environment and attract durable foreign capital. ### FX intervention and reserves level - Cameroon is a major contributor to the CEMAC reserves pool; under the principle of solidarity, CEMAC members have full access to the common pool irrespective of contributions. - 2024 imputed gross reserves at BEAC for Cameroon: 6.3 months of imports. - Adequacy benchmark: reserve coverage of five months of imports is assessed as adequate for CEMAC (resource-rich monetary union vulnerable to volatile commodity prices). - Regional context: - CEMAC reserve coverage end-2023: 4.3 months of imports. - CEMAC estimate for 2024: 4.2 months of imports. - Both regional figures are below the adequate level of 5 months of imports. - Assessment: Cameroon's imputed gross reserves in 2024 are above the adequate level. ### Key policy recommendations (extracted from assessments) - Continue fiscal prudence and rebuild buffers to reduce financing needs and strengthen external sustainability. - Strengthen public debt management and limit non-concessional borrowing. - Advance structural reforms to diversify exports and boost domestic production capacity (SND30 implementation). - Maintain fiscal consolidation and improve the business environment to attract durable foreign capital. - Prioritize concessional external financing and deepen the domestic debt market to diversify funding sources. *International Monetary Fund staff assessment based on Annex I. External Sector Assessment.* ### Annex III. Deepening the Domestic Debt Market ### Annex III. Deepening the Domestic Debt Market ### Market context and recent dynamics - The CEMAC regional government securities market was launched in November 2011, with Cameroon taking a leading role. - Two main instruments: T-bills (Bons du Trésor Assimilables, BTA) for 13, 26, or 52 weeks; long-term bonds (Obligations du Trésor Assimilables, OTA) for durations exceeding two years. - The regional market operates in principle through auctions and comprises primary and secondary segments. - Cameroon continues to rely mainly on external financing for budget deficit funding, while the domestic debt market has become a key complement that has started to dry up as banks face high sovereign exposure. ### Key findings on issuance, stocks, and bank demand - Outstanding OTAs has been stabilizing at around 3 percent of GDP since 2022 after a phase of rapid takeoff from 2018. - Outstanding shorter-term placements (BTAs) doubled to over CFAF 400 billion (about 1.3 percent of GDP) in 2023; net issuance of BTA has come close to zero in 2024. - Stock of BTAs in the CEMAC region is estimated to slightly exceed CFAF 1 trillion in 2025—a level close to the 2021 peak. - Main reason for banks’ dwindling appetite for government bonds: high sovereign exposure estimated at 34 percent of bank assets. - Most Cameroonian bills and bonds—between 91 and 96 percent in 2024—are purchased by local banks, indicating a strong home bias. - Banks operating locally purchase only around half of other CEMAC countries’ securities. - Cameroonian subscription rates: - BTAs estimated at 80 percent in 2024 (compared with CEMAC countries at just below 50 percent). - OTAs current subscription rate is at around 67 percent, down from a 2021 peak of 97 percent. - Waning market appetite for Cameroon’s government securities is attributed to sustained high issuance over recent years and narrowing of Cameroon's prior competitive advantage. ### Interest rates and competitiveness - Cameroon’s issuance rates for both short and long maturities are rising and converging with the regional trajectory. - For OTAs: gap between Cameroon and the CEMAC average widened to a peak in 2021, narrowed until 2024, and reversed moderately until May 2025. - For BTAs: the gap narrowed since 2021 and closed in from 2024. - In 2021, Cameroon BTAs were offered on average at around 3.1 percentage points lower interest rates than other CEMAC countries; by 2024 Cameroon lost the interest rate advantage for short‑term bills. ### Risks to government financing and cash management - Authorities substituted domestic issuances with external commercial financing in 2025 to address the sluggish regional debt market—this depends on debt sustainability risks and may make Government’s bills and bonds less attractive to regional banks. - Large amortization for OTAs coming up in 2026 could compound a cash crunch in Cameroon’s budget execution, evidenced in large domestic arrears. - Reduced attractiveness of domestic bonds and constrained bank demand could limit the government’s financing capacity unless addressed. ### Policy recommendations and reform priorities - Develop the secondary market and broaden the investor base: - Open the market to financial institutions such as pension funds, insurance companies, and collective investment vehicles. - Consider web‑based tools (examples from other SSA countries) to attract small individual investors to treasury bills. - Strengthen fiscal credibility and reduce reliance on domestic short‑term issuance: - Improve domestic revenue mobilization. - Rationalize expenditures. - Implement a prudent borrowing plan that prioritizes concessional external funding and longer maturities. - Tackle banking sector sovereign concentration: - Address the high sovereign debt exposure of local banks to prevent crowding out and market saturation. - Reform market infrastructure: - Reform the secondary market to broaden the investor base and enhance liquidity. - Enhance transparency and market functioning to restore investor confidence. - Manage near‑term fiscal pressures: - Plan for large OTA amortizations in 2026 to avoid exacerbating domestic arrears and budget execution shortfalls. *Source: Annex III. Deepening the Domestic Debt Market (extracted from the provided IMF chapter).* ### 3. Cameroon's CD story is one of building from strong foundations toward emerging ### 3. Cameroon's CD story is one of building from strong foundations toward emerging priorities ### Capacity Development (CD) portfolio composition and sequencing - "92 percent of current spending supports foundational needs—public financial management, revenue administration, macroeconomic frameworks, statistics." - Strategic investments in "debt management and climate change" indicate demand in more advanced policy areas. - CD reflects a deliberate sequencing: "establish the basics first, then layer in specialized capabilities." - As foundations solidify, "there's scope to expand debt and climate work." ### FY26 engagement rhythm and priority workstreams - Public Financial Management and Revenue Administration "anchor the calendar with several missions—reflecting the dual priorities of fiscal governance and domestic resource mobilization." - Real Sector–National Accounts missions "span several months, underscoring the critical need for quality economic data." - Annex Figure 4 shows "a rhythm of sustained engagement throughout FY26." - Notes: includes projects in "Approval", "Execution", and "Complete" stages and Single CD Country; sector defined by CD departments; current FY and onward data is projection and subject to change. ### Role of IMF CD in reform implementation and lessons for future engagement - IMF CD has been "essential in supporting reform implementation under Fund arrangements." - Structural benchmarks were "drawn from CD findings and recommendations" and implementation "relied in good part on the review and guidance of CD experts." - Focus was on fiscal measures, particularly "below-the-line reforms, such as PFM and budgetary controls." - Implementation shortcomings: - Some measures targeted controlling policy outcomes rather than addressing underlying root causes, "leading to persistent shortcomings in the budgetary process." - Structural reform implementation "was characterized by frequent delays and reprogramming, due to the complexity and the high scope of measures." - Some reforms were escalated to prior actions. - Recommendations for future engagement: - "A more focused approach with well thought through prioritization will be desirable." - Conditionality should "shift focus from controlling policy outcomes to reforming underlying systems." - High-scope reforms should be "broken down into manageable subcomponents and phased over time." - "A careful calibration of CDs efforts and close coordination with the delivery departments will be key to improving reform design and implementation." ### Implementation of past Article IV Fund advice — selected assessments - Fiscal policy and PFM: - Government "succeeded in further fiscal consolidation measured at the accrual level," but "sizable accumulation of arrears and under‐execution of the capital budget weakened the consolidation effort." - Debt-to-GDP "has continued to decline." - Tax administration: "reforms aimed at digitalization of payment processes" implemented; "CIT holidays were shortened and a few VAT exemptions abolished" though exemptions "still exceed the exemptions permitted by the relevant CEMAC directive." "New VAT tax incentives were introduced with the 2026 budget." - Phasing out fuel subsidy: "The second step of reducing the subsidy advanced as recommended in 2024," final replacement delayed until after the 2025 election; "as the international price has been below the administered price in 2025, the de facto subsidy is zero." - PFM: usage of extrabudgetary spending and unallocated budget amounts "declined"; common chapters reformed in the 2026 budget; abolition of extrabudgetary spending through SNH "is in the process of being implemented." Budget carry-over practices persist. Treasury single account implementation "remains incomplete" with delays at BEAC but "a new reform schedule has been agreed." - Private sector and governance: - Industrial policy "was not implemented in a comprehensive manner"; some new SOEs established and decision to rebuild SONARA. - Infrastructure: "Under‐execution of capital spending" and "no progress in streamlining SENDs." - Revenue administration improvements noted in private sector surveys. - AML/CFT implementation "limited"; asset declaration law approved but application delayed. - Limited progress removing regulations hindering competition, notably in telecom/internet services. - Financial sector: - Government "recapitalize[d] two banks." - Progress on institutional framework for bank lending "has been slow." - SME credit access measures "faced delays but are under way with support of the World Bank." - Climate and environment: - Under the RSF, "progress has been made with the completion of hydropower dams." - Climate factors included in project management framework. - Forestry management conditionality under the RSF "was not fully implemented during the RSF, but progress has been made with most modules completed." ### Data adequacy, diagnostics, and CD priorities - Overall staff assessment: data have shortcomings that "somewhat hamper surveillance" with some serious shortcomings in specific areas. - Key data issues and rationale: - National accounts: "represents fairly well economic developments"; chain-linking issues discussed between STA and area department. - Lack of high-frequency indicators "hamper the ability for timely updates of economic activity." - Fiscal data: suffers from "extrabudgetary spending and problems with the delineation of spending between fiscal years," causing "inconsistencies in data reporting, frequent revisions, and delays." - SOEs: lack of regular and consistent financial reporting limits GFS coverage; SOEs play a "quite dominant role in the Cameroonian economy." - Balance of payments: Cameroon is "the only country in the CEMAC devoting resources to BOP statistics"; some surveys are "very narrow" and compilation does not always follow best practices; trade data deviations with mirror data remain unexplained. - Financial Soundness Indicators (FSIs): compilation responsibility of COBAC; COBAC's IT platform problems "prevented them to update properly FSIs since 2023," creating "a serious risk for assessing macroeconomic risks in the banking sector." - Changes since last Article IV: - "The prolonged delay in FSI compilation has deepened the problems with understanding weaknesses in the banking sector." - Recent STA CD for COBAC found progress in establishing a new reporting system expected to resume FSI compilation and publication. - Efforts under the program reduced some extrabudgetary spending amounts but did not comprehensively address the issue. - Corrective actions and CD priorities: - Upcoming FAD mission on SOE management to assist in developing processes for "more regular and reliable financial reporting." - Continued PFM CD engagement to "further improve budget and treasury processes," with focus on introducing the treasury single account. - Authorities requested CD from FAD/STA to ensure fiscal reporting "correctly reflects all transactions despite spending outside of the regular budget and treasury procedures." - Data Adequacy Assessment ratings (selected sectoral median ratings as presented): - National Accounts: B - Prices: C - Government Finance Statistics: C - External Sector Statistics: C - Monetary and Financial Statistics: D - Inter-sectoral Consistency: C - Granularity (overall): C ### Debt sustainability assessment, risks, and policy priorities - Debt-carrying capacity: "Cameroon Composite Indicator index ... is at 2.76." This value "exceeds the threshold for medium debt-carrying capacity" and debt-carrying capacity has been "upgraded to medium." - Debt dynamics and current position: - "Cameroon remains at high risk of debt distress ... despite the upgrade of its debt-carrying capacity to medium." - Public debt to GDP ratio "projected at just above 40 percent by end-2025." - Resilient growth and a prudent fiscal stance "support debt dynamics" but "elevated debt-service costs and weaker export projections" increase liquidity risks. - External debt service–to–exports ratio "remains above its threshold for almost the entire projection horizon." - External debt service–to–revenue ratio "falls below its benchmark only from the medium term." - PV of external debt to exports ratio "hovers just below its threshold until the end of the projection period." - PV of external debt–to–GDP and PV of public debt-to-GDP "remain well below their thresholds and are projected to further decline over time." - Staff assessment: "Cameroon’s debt is sustainable" given authorities' commitments. - Downside risks (domestic and external): - Domestic: "rising social tensions, regional and national security pressures, and the materialization of contingent liabilities"; "limited progress on export diversification"; "recurrent climate shocks"; "possible pressures on regional reserves from fiscal expansion in other CEMAC countries." - External: "heightened geoeconomic tensions, a renewed tightening of global financial conditions or sharp market corrections, weaker-than-expected global growth, and volatile energy prices." - Policy priorities to mitigate risks: - "Prudent fiscal policy and strengthening revenue mobilization." - "Improving debt-service monitoring and portfolio management." - "Accelerating export-promotion and strengthening external sector statistics to minimize under-reporting." - "Advancing business-climate reforms." - "Reinforcing SOE and PPP oversight to contain contingent liability risks." - Risk ratings (from joint Bank-Fund DSA): - "Risk of external debt distress: High" - "Overall risk of debt distress: High" - "Granularity in the risk rating: Sustainable" - "Application of judgement: No" - Document approval and date: "March 9, 2026." *Source: IMF staff report excerpts provided in the Content unit.* ### 1. Debt coverage remains unchanged since the previous DSA (Text Table 1). Public debt ### Debt coverage remains unchanged since the previous DSA (Text Table 1) ### Debt coverage and perimeter - Public debt coverage includes debt of the central government, expenditure floats and arrears, guarantees, debt of the National Refining Company (SONARA), and external arrears of other state-owned enterprises (SOEs). - The DSA does not cover the debt of local governments, which are not allowed to borrow from financial markets, and such debt is mostly owed to domestic suppliers, including SOEs, and is yet to be further verified. - Other elements of the general government such as social security funds or extra budgetary funds are not covered. - Domestic debt of SOEs other than SONARA is not included in the DSA’s debt baseline perimeter but treated as contingent liabilities. - External debt is mainly defined based on currency denomination but is adjusted for residency where data are available. ### SOE debt coverage, data gaps, and recent developments - Progress in SOE debt reporting through expansion of SOE debt data; supported by the World Bank’s Sustainable Development Finance Policy (SDFP) Performance and Policy Actions (PPA). - 14 large SOEs were selected to produce diagnostic studies under IMF-supported program completed in 2025; authorities completed studies and compiled an inventory of cross-debts between SOEs. - Important data and reconciliation gaps remain: absence of a clearance plan to settle cross-debts and ongoing reconciliation of mutual claims. - Reported SOE debt (CAA data) at end-September 2025: - External debt: CFAF 450.5 billion - Domestic debt: CFAF 306.6 billion - Comparable end-2024 figures reported: - External debt: CFAF 493.1 billion - Domestic debt: CFAF 335.8 billion - SONARA accounted for about 82 percent of listed SOEs’ external debt and 67 percent of listed SOEs’ domestic debt. ### Contingent-liability stress test parameters (updated) - PPP capital stock (September 2025): CFAF 4,896 billion, about 14.4 percent of GDP. - In the DSA, PPP contingent liability corresponds to 5.0 percent of GDP (35 percent of PPP stock). - Shock scenario for remaining uncovered SOE debt: 3 percent of GDP. - Contingent liabilities from financial markets: default value of 5 percent of GDP. - Total default-assumed uncovered elements (sum of components 2+3+4+5): 13.1 percent of GDP. - Notes on defaults and triggers: - The default shock of 2% of GDP will be triggered where government-guaranteed debt is not fully captured under country public debt definition; if fully included and risks negligible, team may reduce to 0%. ### Evolution and level of public debt - Staff preliminary estimate of total public and publicly guaranteed (PPG) debt as of end-2024: 43.4 percent of GDP (CFAF 14,013 billion), compared with 43.6 percent of GDP at end-2023. - 2024 debt composition (staff estimates / authorities’ estimates summarized): - External debt (2024): 27.5 percent of GDP (CFAF 8,902 billion) [staff estimate]; Total External (Sep-2025): figures reported elsewhere. - Domestic debt (2024): 14.2 percent of GDP (CFAF 4,604 billion) [authorities’ report]. - Public debt-to-GDP ratio declined in first three quarters of 2025. ### External debt composition and trends - Share of multilateral debt in government external debt: - Increased to 52.9 percent of total PPG external debt at September-2025 from 47.7 percent at end-2024. - World Bank loans accounted for 42.4 percent of multilateral loans or 22.4 (percent of total external debt). - Bilateral debt declined in 2024 and first three quarters of 2025. - Commercial debt increased, partly due to Eurobond private placement in July 2024. ### Domestic public debt composition and dynamics - Government securities (BTA and OTA) accounted for 41.1 percent of domestic public debt in 2024, up from 40.7 percent in 2023, and increased further in 2025. - Float and arrears increased in 2024 both in nominal terms and as a share of domestic public debt. - Average maturity of public debt as of September-2025: - Overall: 6.4 years - External debt: 7.4 years - Domestic debt: 4.5 years - Weighted cost for debt in September-2025: 3.1 percent (marginally lower than a year ago). ### Stock of contracted-but-undisbursed debt (SENDs) - SENDs (excluding budget support): remained substantially unchanged as percent of GDP. - SENDs as percent of GDP: - Sep-2025: 12.8 percent of GDP (CFAF 4,403 billion) - 2024: 12.6 percent of GDP (CFAF 4,069 billion) - 2023: 12.9 percent of GDP (CFAF 3,756 billion) - SENDs composition (Sep-2025): - External SENDs: CFAF 4,403 billion (12.8 percent of GDP) - o/w multilateral: CFAF 3,276 billion (9.5 percent of GDP) - o/w bilateral: CFAF 422 billion (1.2 percent of GDP) - o/w commercial: CFAF 706 billion (2.0 percent of GDP) - Government monitoring: 180 active projects monitored; government seeking to reduce stock of SENDs, but progress in reducing undisbursed non-performing SENDs has been slow. ### Guaranteed and unguaranteed SOE debt - Outstanding stock of guaranteed debt declined to CFAF 1.7 billion as of September-2025 from CFAF 3.5 billion at end-2024. - Unguaranteed SOE debt (including SONARA) remained substantially unchanged. ### Public debt management capacity and recommended improvements - Capacity to monitor and manage public debt for IMF debt limits policy: adequate, with improvements needed. - Strengths and measures in place: - All project financing proposals and PPP projects are examined by the National Public Debt Committee (CNDP). - Procedures and responsibilities for loan operations and public debt management clarified in 2019 manual. - CNDP scope extended to all domestic and external borrowing contracted by the government including CTDs, public companies, and public establishments; CNDP mandate expanded to cover PPP-related financing. - Fund technical assistance helped reinforce domestic issuance plan formulation and address MTDS deficiencies. - Key weaknesses and recommended improvements: - CNDP engagement often delayed until late in debt contracting process. - Debt policy not firmly anchored by the medium-term debt management framework, causing discrepancies between announced plans and actual financing. - Further efforts needed to strengthen active engagement of the CNDP, enhance effectiveness of the MTDS, develop consistent annual borrowing plans, improve estimates of financing needs, and enhance communication strategy to creditors. ### Recent macroeconomic developments and forecasts - 2024 outcomes: - Real GDP growth: 3.5 percent - Average inflation: 4.5 percent (down from 7.4 percent in 2023) - Overall fiscal deficit (payment order basis, excluding grants): increased to 1.8 percent (presumably percent of GDP) - Current account deficit: improved to 3.3 percent of GDP - 2025 projections and conditions: - Real GDP growth projected at 3.1 percent in 2025 - Inflation declined to 3.4 percent in 2025; remains slightly above CEMAC convergence level of 3 percent - Fiscal deficit expected to increase in 2025 due to election-related spending and revenue underperformance - External position expected to worsen due to weak foreign demand and subdued commodity prices - Baseline subject to headwinds: domestic security situation, slow reforms, escalation of geoeconomic tensions - Medium-term outlook (Box 1: Medium Term, 2025–29 assumptions and projections): - Real GDP growth projected to average 3.8 percent in 2025-2029 (revised down by 0.5 percentage point from previous DSA) - Average annual inflation projected to decline to 2.9 percent in 2026 and 2.6 percent in 2027; long-term target approaching 2.5 percent - Fiscal deficit (excluding grants, payment order basis) expected to average 1.7 percent of GDP over 2025–29 (an increase relative to the previous DSA) - Emphasis on mobilizing fiscal revenues, accelerate reforms to improve private-sector conditions, strengthen public debt management, reduce reliance on non-concessional borrowing, and increase export base to mitigate debt sustainability risks - Selected macroeconomic projections (Current vs Previous DSA excerpts): - Real GDP growth: Current 2025 projection 3.1 percent (Previous 4.0 percent) - Inflation (CPI, period average): Current 2026 projection 2.9 percent (Previous 3.0 percent) - Overall fiscal balance (excl grants, percent of GDP): Current 2025 -2.3; 2026 -1.9; 2027 -1.5 - Total revenue (excl grants, percent of GDP): Current 2025 14.5; 2026 12.8; 2027 12.2 - Total expenditure (percent of GDP): Current 2025 16.3; 2026 16.5; 2027 16.5 - Current account balance (incl grants, percent of GDP): Current 2025 -3.9; 2026 -5.2; 2027 -5.4 - Exports of goods and services (percent of GDP): Current 2025 15.3; 2026 12.8; 2027 12.2 - Oil price assumption (US dollars per barrel) and long-term projections presented in the source’s projection tables. *Source: IMF staff compilation from "Debt coverage remains unchanged since the previous DSA (Text Table 1)."* ### Box 1. Cameroon: Medium- and Long-Term Macroeconomic Assumptions (Concluded) ### Box 1. Cameroon: Medium- and Long-Term Macroeconomic Assumptions (Concluded) ### Current Account and Medium-Term Outlook - In 2025 the current account deficit is expected to have increased, at 3.9 percent of GDP. - The deficit is expected to worsen further in the medium term, driven by: - weak foreign demand, - subdued commodity prices, - less favorable terms of trade, - higher imports (government’s import-substitution policy has not yet produced substantial results). - Net foreign direct investment (FDI) inflows are expected to average around 1.8 percent of GDP in the medium term. - Exports of goods and services are projected to decline as a share of GDP over the medium term, reflecting weaker growth in non-oil exports. - Policy priority highlighted: enhancing export diversification in product composition and market destinations and leveraging AfCFTA opportunities. ### Long Term (2030–44) Growth and Fiscal Assumptions - Long-term growth is expected to edge down to 4.2 percent, from 4.6 percent in the previous DSA. - Factors weighing on potential growth: - stabilization of mining production, - investment returning toward lower historical averages, - persistent structural constraints including shallow financial intermediation and public investment efficiency weaknesses, - negative impact from deteriorating human capital investment (per a recent World Bank study). - Fiscal revenue projected to increase, partly due to implementation of the Medium-Term Revenue Strategy (MTRS). - Baseline projection assumes a declining fiscal deficit from 2026 onwards. ### Financing Assumptions and Recent Borrowing - Cameroon’s cumulative public gross financing needs over the 2025-27 period are estimated at around CFAF 8,000 billion (23.5 percent of 2025 GDP), of which around 50 percent is assumed to be financed externally. - For 2025, the DSA reflects: - declining budget support from donors, - very low bilateral lending, - external project financing based on the budget. - After 2025, financing composition shifts gradually toward commercial borrowing with a decreasing grant element and increasing external project financing in outer years. - Authorities intend to replace regional long-term government bond issuance with external financing due to tight regional market conditions. - Recent borrowing operations: - December 2025: external loan at an effective interest rate of around 10.5 percent, alongside an external bank guarantee supporting domestic borrowing. - Early 2026: private placement at an effective interest rate of around 9.5 percent (excluding commitment fees). - Domestic financing interest rate assumptions: range between 6 and 9 percent per year, depending on maturity. - Credit rating agencies have not revised their assessments following Cameroon’s 2023 downgrade. - Weaknesses in cash management and the use of exceptional budget execution procedures led to accumulation of domestic arrears at end-2024, which persisted into 2025; these arrears are assumed to be cleared over the next six years. ### SONARA (State Oil Refinery) Assumptions - Financing assumption regarding SONARA unchanged from last DSA; details of restructuring plan are yet to be finalized. - Historical actions: - Agreement with main supplier in September 2022 to regularize outstanding arrears; - Restructuring agreement with domestic banks in October 2021; - Agreement with another supplier in December 2023; some smaller suppliers remain to finalize arrangements. - 2025: authorities reviewed a restructuring outline; an external private firm prepared a study and action plan (as part of a previous IMF structural benchmark) but details not finalized. - Staff assumption: zero projected net income for SONARA (instead of mild positive income as per SONARA projection). - Cost of potential reconstruction of refinery operations is not incorporated in the baseline. ### Realism Tool, Classification, and Tailored Stress Tests - The realism tool does not highlight risks to the baseline projections; projected three-year fiscal adjustment considered achievable relative to LICs’ fiscal adjustments under past IMF programs. - Growth projections remain somewhat below levels implied by the fiscal path, possibly not fully capturing other activity drivers (subdued private consumption, weak export prices). - Cameroon’s debt-carrying capacity upgraded to medium: - Composite Indicator (CI) score: 2.76 (based on October 2025 WEO projections and 2024 World Bank CPIA score). - Classification: Medium (consistent across current and previous vintages). - Tailored stress tests include a market financing shock and a commodity price shock (exports of fuel and other commodities >50 percent of total exports). - Standardized stress tests applied; contingent liability stress test based on quantified contingent liabilities. ### External Debt Sustainability Findings - External risk of debt distress assessed to remain high as two indicators breach thresholds under the baseline: - external debt service-to-revenue ratio (breaches threshold for a prolonged period), - external debt service-to-exports ratio (breaches threshold for a prolonged period). - Both indicators are projected to fall below thresholds by end of the projection horizon. - PV of debt-to-exports ratio hovers around its threshold but does not breach it. - PV of debt-to-GDP remains well below its threshold throughout projection horizon in baseline and shock scenarios. - Compared to previous DSA, aforementioned indicators have worsened, reflecting weak export performance and potentially underreported exports in official BoP data. - Most extreme shock scenarios (export shock and commodity price shock) breach thresholds for the two external indicators. - Historical scenario yields dynamics broadly similar to baseline. ### Public Debt Sustainability Findings - Risk associated with public debt distress assessed as low. - PV of public debt-to-GDP ratio remains below its threshold under baseline and shock scenarios throughout projection horizon; ratio declines over time. - PV of debt-to-revenue ratio and debt service-to-revenue ratio projected to decline gradually. - Most extreme shocks for public debt indicators: commodity price shock and combined contingent liabilities. - Under historical scenario, public debt burden indicators show an upward trajectory driven by historically large primary deficits. ### Market Module and Financing Pressures - Market financing tool indicates lower risks from market financing pressures: - Cameroon’s maximum three-year gross financing needs estimated at 8 percent of GDP (benchmark: 14 percent). - EMBI spread for Cameroon: 567 bps as of February 18, 2026 (benchmark: 570 bps); EMBI lower than in previous DSA (previously above 800 bps). - With EMBI below its threshold, the module signals improved market financing pressures. ### Risks, Vulnerabilities, and Specific Numerical Risks - Overall assessment: Cameroon remains at high risk of external debt distress but debt is considered sustainable with low likelihood of inability to meet obligations. - Risks tilted to the downside: - Domestic: potential intensification of social unrest after 2025 presidential election, regional security challenges, contingent liabilities from bank restructuring and SOEs not included in baseline, delays in SONARA restructuring, limited progress on export diversification. - External: escalation of geoeconomic tensions, renewed tightening of global financial conditions or sudden global equity correction, high volatility of global energy prices. - Regional: fiscal expansions in other CEMAC members could pressure regional reserves and tighten liquidity conditions. - Domestic debt dynamics: - Domestic debt-to-GDP does not signal additional sustainability risk; domestic debt-to-GDP remains below median across LICs and is projected to decline. - Domestic debt service rises sharply in near term due to assumed arrears repayments, then declines as refinancing pressures ease. - Net domestic issuance turns negative from 2026, trough around 2030, then stabilizes at modest levels. - Real interest rates revised upward relative to previous DSA. - Large unexplained residuals in historical debt-creating flows point to risks, possibly reflecting expansion of debt perimeter to include domestic arrears and SONARA liabilities. ### Climate Change Impact and Investment Simulation - World Bank Country Climate and Development Report estimates negative impact of climate change on GDP in Cameroon between 4 to 10 percent by 2050. - Additional adaptation and mitigation investments: - adaptation: US$32 billion over a horizon of 10 years, - mitigation: US$26 billion over a horizon of 10 years. - In a Debt, Investment, Growth, and Natural Disaster model simulation, upfront adaptation investment: - reduces GDP losses in the event of climate shock, - allows for faster recovery, - may initially worsen debt burden indicators but improves them in the long term by reducing need for post-disaster investments. ### Policy Recommendations and Priorities - Keep public debt dynamics on a sustainable path; pursue structural fiscal reforms including enhancing revenue mobilization. - Adopt a prudent borrowing policy skewed towards concessional loans and limit reliance on non-concessional borrowing; strengthen management of SENDs. - Redirect resources with targeted spending; use 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 economic diversification to address vulnerable export-related debt indicators. - Improve accuracy of balance of payments data, particularly exports, to better assess liquidity and external debt risks. - Accelerate reforms to improve the domestic business and investment environment to attract more FDI and boost exports. - Strengthen SOE management to reduce contingent liability risks. - Advance climate-related reforms (as in SND-30 and supported under RSF) to address climate-related risks and enhance longer-term debt sustainability. *Source: Box 1. Cameroon: Medium- and Long-Term Macroeconomic Assumptions (Concluded).* ### 29. The authorities concur that Cameroon remains at high risk of debt distress, while ### The authorities concur that Cameroon remains at high risk of debt distress, while ### Authorities' assessment and commitments - The authorities concur that Cameroon remains at high risk of debt distress, while emphasizing that public debt remains sustainable in the medium term, reflecting overall sound fiscal policies. - They highlighted: - recent improvement in the debt-carrying capacity classification; - decline in market spreads as encouraging signals. - The authorities reaffirmed their commitment to preserving public debt sustainability and to honoring debt service obligations in a timely manner. ### Ongoing vulnerabilities and staff observations - Elevated debt service indicators, especially compared to exports, pose ongoing liquidity and fiscal risks, highlighting the need for: - stronger external buffers; - prioritizing concessional financing. - Liquidity pressures are driven by a high concentration of maturing government securities over the next few years, after which financing pressures are expected to ease. - Debt burden indicators expressed as a share of exports might be partly inflated by under-reporting in official export statistics; efforts are underway to improve data quality. ### Key DSA indicators and projections (selected figures from the External and Public Sector DSAs) - External debt (nominal) 2024–2035 (selected years, in percent of GDP): 29.5 (2024); 26.1 (2025); 25.9 (2026); 25.2 (2027); 24.2 (2028); 23.6 (2029); 22.9 (2030); 25.1 (2035). - Of which: public and publicly guaranteed (PPG) external debt (percent of GDP): 28.4 (2024); 25.0 (2025); 24.8 (2026); 24.2 (2027); 23.3 (2028); 22.7 (2029); 22.0 (2030); 24.4 (2035). - Change in external debt (percent of GDP): -0.1 (2024); -3.4 (2025); -0.3 (2026); -0.7 (2027); -1.0 (2028); -0.6 (2029); -0.7 (2030); 0.4 (2035). - Identified net debt-creating flows (percent of GDP): -0.8 (2024); 1.5 (2025); 2.5 (2026); 2.6 (2027); 1.9 (2028); 1.7 (2029); 1.0 (2030); 1.1 (2035). - Non-interest current account deficit (percent of GDP): 2.5 (2024); 3.3 (2025); 4.4 (2026); 4.6 (2027); 3.9 (2028); 3.8 (2029); 3.4 (2030); 3.4 (2035). - Exports (percent of GDP): 16.1 (2024); 14.5 (2025); 12.8 (2026); 12.2 (2027); 12.4 (2028); 12.2 (2029); 12.8 (2030); 11.5 (2035). - PV of PPG external debt-to-GDP ratio (selected years): 24.5 (2025); 23.2 (2026); 22.1 (2027); 21.4 (2028); 20.4 (2029); 19.6 (2030); 18.9 (2031); 20.3 (2035). - PV of PPG external debt-to-exports ratio (selected years): 151.9 (2025); 160.2 (2026); 172.8 (2027); 175.7 (2028); 164.3 (2029); 160.7 (2030); 147.8 (2031); 177.1 (2035). - PPG debt service-to-exports ratio (percent): 17.8 (2024); 18.1 (2025); 20.4 (2026); 23.8 (2027); 22.5 (2028); 23.4 (2029); 21.1 (2030); 14.0 (2035). - PPG debt service-to-revenue ratio (percent): 18.7 (2024); 18.6 (2025); 17.8 (2026); 19.3 (2027); 18.2 (2028); 18.2 (2029); 16.9 (2030); 9.7 (2035). - Gross external financing need (Billion of U.S. dollars): 2.2 (2024); 2.7 (2025); 3.4 (2026); 3.9 (2027); 3.6 (2028); 3.8 (2029); 3.6 (2030); 3.6 (2035). - Real GDP growth (percent): 3.5 (2024); 3.1 (2025); 3.3 (2026); 3.8 (2027); 4.2 (2028); 4.3 (2029); 4.4 (2030); 4.1 (2035). - Government revenues (excluding grants, percent of GDP): 15.4 (2024); 14.1 (2025); 14.7 (2026); 15.0 (2027); 15.4 (2028); 15.7 (2029); 16.0 (2030); 16.6 (2035). - Public sector debt (percent of GDP): 43.4 (2024); 40.3 (2025); 39.6 (2026); 38.9 (2027); 37.4 (2028); 35.9 (2029); 34.1 (2030); 31.6 (2035). - Change in public sector debt (percent of GDP): -0.1 (2024); -3.1 (2025); -0.7 (2026); -0.8 (2027); -1.5 (2028); -1.5 (2029); -1.8 (2030); -0.4 (2035). - Identified debt-creating flows for public debt (percent of GDP): -1.1 (2024); -0.6 (2025); -0.6 (2026); -0.7 (2027); -1.1 (2028); -1.2 (2029); -1.5 (2030); -0.3 (2035). - Primary deficit (percent of GDP): 0.2 (2024); 0.9 (2025); 0.1 (2026); 0.0 (2027); -0.2 (2028); -0.2 (2029); -0.2 (2030); 0.6 (2035). - PV of public debt-to-GDP ratio (selected years): 40.3 (2025); 37.7 (2026); 37.0 (2027); 36.1 (2028); 34.5 (2029); 32.8 (2030); 31.0 (2031); 27.5 (2035). - PV of public debt-to-revenue and grants ratio (selected years): 257.5 (2025); 263.3 (2026); 247.8 (2027); 238.5 (2028); 223.7 (2029); 209.1 (2030); 193.5 (2031); 165.8 (2035). - Debt service-to-revenue and grants ratio (percent): 37.3 (2024); 33.0 (2025); 55.6 (2026); 54.2 (2027); 55.3 (2028); 53.9 (2029); 53.3 (2030); 31.8 (2035). - Gross financing need (percent of GDP): 6.1 (2024); 5.6 (2025); 8.4 (2026); 8.2 (2027); 8.4 (2028); 8.3 (2029); 8.3 (2030); 5.9 (2035). ### Stress tests and risk scenarios (high-level) - Multiple stress tests indicate vulnerabilities concentrated in: - commodity price shocks (commodity price stress uses IMF research department outlook); - export shocks (most extreme shocks often driven by exports); - combined contingent liabilities and market-financing risks. - Stress-test outcomes show breaches of some export- and commodity-price-related thresholds for PV of debt-to-exports and debt-service-to-exports ratios under tailored scenarios. ### Policy implications and recommendations reflected in the text - Maintain prudent fiscal policies to preserve medium-term public debt sustainability. - Rebuild external buffers to reduce liquidity risk. - Prioritize concessional financing to lower debt-service burdens. - Manage concentrated maturities of government securities to smooth near-term liquidity pressures. - Improve export data quality to ensure debt burden indicators accurately reflect external capacity. - Advance structural reforms to strengthen growth and resilience to external shocks. *Prepared from the IMF Staff Report informational annex and Debt Sustainability Analysis tables and figures as provided in the source content.* ### Introduction ### Introduction ### Recent Economic Developments and Outlook - Economic activity continued to expand in 2024 and early 2025 despite a challenging domestic and external environment. - Staff estimate real GDP growth to have slightly slowed to about 3.1 percent in 2025, from 3.5 percent in 2024. - The authorities estimate growth of about 3.7 percent in 2025, supported by resilience in the oil sector and continued activity in key non-oil sectors. - Inflation declined to about 3.4 percent by end-2025. - The fiscal position weakened in 2025, with the non-oil primary deficit estimated at about 2.6 percent of GDP, reflecting revenue underperformance and expenditure pressures, including election-related costs and ongoing security outlays. - The current account deficit is estimated to have widened to around 3.9 percent of GDP, reflecting lower oil export receipts. - Cameroon’s contribution to regional reserves at BEAC remained broadly stable despite some intra-year volatility. - Looking ahead, the authorities anticipate growth to strengthen gradually toward about 4.9 percent by 2028, consistent with SND30, and expect inflation to decline further toward the regional convergence criterion. - Elevated risks include tighter global financial conditions, volatility in global energy markets (notably in light of recent developments in the Middle East), developments in regional reserves within CEMAC, and continued security challenges. ### Fiscal Policy Reforms - The 2026 budget targets an overall deficit broadly consistent with the CEMAC fiscal convergence reference value of 1.5 percent of GDP, while prioritizing infrastructure investment and growth-supporting expenditures. - Public debt remains relatively moderate at about 43 percent of GDP, but Cameroon continues to face high risk of debt distress driven by liquidity pressures and elevated debt service obligations rather than excessive debt levels. - Authorities have taken steps to ease liquidity tensions, including recent domestic market-based financing operations, and prefer concessional financing from development partners. - The 2026 Finance Law introduces measures to strengthen expenditure discipline—tighter conditions for expenditure commitment and payment, and reinforced documentation requirements—to help prevent accumulation of new arrears. - Authorities are considering additional options to strengthen arrears management over the medium term. - Strengthening domestic revenue mobilization is central to easing financing pressures and rebuilding fiscal buffers: - Progress in modernizing tax and customs administration is being built upon. - Reforms to broaden the tax base include efforts to rationalize tax expenditures and better target exemptions. - Digitalization (electronic filing and invoicing systems) is a key pillar to enhance compliance and improve revenue collection. - Selected measures include adjustments to excise taxation and reinforced customs controls. - Public financial management (PFM) and fiscal risk oversight reforms are advancing under Cameroon’s PFM Strategic Reform Plan: - Improvements to commitment controls and procurement processes are expected to reduce arrears risk and improve budget execution. - Implementation of the Treasury Single Account is advancing with a revised reform schedule agreed with regional partners. - Authorities are transferring National Hydrocarbons Corporation (SNH) revenues fully to the central budget and halting direct interventions to reduce extrabudgetary operations and strengthen fiscal transparency. - Addressing fiscal risks from state-owned enterprises (SOEs) and improving oversight and financial reporting is recognized as important. - Continued improvements in public investment management and project preparation, including addressing the backlog of committed but undisbursed investment projects, are essential to translate increased investment spending into stronger and more sustainable growth. ### Financial Sector Stability - The financial sector remains broadly stable, but structural challenges limit financial intermediation and constrain private sector credit access. - Vulnerabilities tied to the sovereign-bank nexus are acknowledged: banks hold a significant share of government securities and non-performing loans remain elevated. - In collaboration with regional supervisory authorities (COBAC and BEAC), efforts are underway to: - Strengthen prudential oversight. - Address non-performing loans and broader banking sector vulnerabilities. - Reinforce financial sector resilience, including establishing the region’s first credit reference bureau to enhance credit information sharing and borrower discipline. - The State’s recent involvement in several banks is presented as temporary restructuring and stabilization measures with the objective of restoring viability and ultimately reducing public ownership over time. - Reforms to deepen financial markets, including developing the secondary market for government securities, are expected to support improved financial intermediation and credit allocation. - AML/CFT frameworks are being strengthened by addressing remaining FATF gaps, improving implementation of targeted financial sanctions, enhancing oversight of non-financial sectors and non-profit organizations, and operationalizing the asset declaration law, with the aim of supporting Cameroon’s exit from the FATF grey list. ### Growth, Governance, and Other Structural Reforms - Unlocking Cameroon’s growth potential requires sustained progress on structural bottlenecks; authorities prioritize: - Improving infrastructure. - Strengthening the business environment. - Enhancing public investment efficiency, including execution of capital spending and project selection and prioritization. - Advancing governance reforms—improving transparency in public sector operations and reinforcing accountability in the extractive sector in line with the EITI framework—is important to strengthen investor confidence. - Policies to strengthen domestic production and economic diversification are being pursued, consistent with SND30, to support private sector development and foster more resilient and inclusive growth. ### Conclusion - The Cameroonian authorities remain firmly committed to preserving macroeconomic stability while advancing reforms to support stronger and more inclusive growth. - They value the Fund’s continued engagement and policy dialogue and look forward to maintaining close collaboration as they pursue their reform agenda in line with national development objectives and regional commitments within CEMAC. *Statement by Mr. N'Sonde, Executive Director for Cameroon and Mr. Carvalho da Silveira, Advisor to Executive Director — March 25, 2026* --- _Source: https://www.imf.org/-/media/files/publications/cr/2026/english/1cmrea2026001-source-pdf.pdf_