Press Release: Statement by the IMF Mission for Cameroon

September 15, 2006

Press Release No. 06/199

The following statement was issued by Mr. Dhaneshwar Ghura, the IMF mission chief for Cameroon, in Yaoundé on September 11, 2006:

"An IMF mission visited Yaoundé during August 28-September 11, 2006 to conduct the second review of Cameroon's economic and financial program supported by the IMF under the country's Poverty Reduction and Growth Facility (PRGF) arrangement. The mission met with Prime Minister Ephraim Inoni; State Minister at the Presidency Jean Marie Atangana Mebara; Finance Minister Polycarpe Abah Abah; and the National Director of the regional central bank (BEAC) Sadou Hayatou, and other senior government officials. The staff also met with representatives of the donor community, private sector, and labor unions. The mission would like to thank the authorities for the high quality of the dialogue and for their close cooperation during its stay in Yaoundé.

"The review covered implementation of economic policies and structural reforms during the first half of 2006. The key measures programmed for the period focused on consolidating the fiscal position further through revenue-enhancing measures and improved expenditure management, advancing public enterprises reforms, and strengthening transparency and governance.

"Budget execution was broadly as planned and quantitative budgetary and financial targets of the program were met. Public finance management continued. In order to improve transparency, the government published information on budget execution and the oil sector. However, in the area of public enterprise reform, performance has been mixed. The measures envisaged under the program related to the telecommunication company (CAMTEL), the water company (SNEC), and the national postal agency (CAMPOST) encountered delays. The privatization process for the national airline company (CAMAIR), during which the winner of the bids was selected at end-June 2006, is still to be finalized. The authorities confirmed their determination to implement the envisaged measures in a timely manner in order to meet their commitments in the context of the second review as soon as possible."

"Cameroon's medium-term prospects are expected to improve subject to continued implementation of sound policies and progress in structural reforms. In 2006-07, growth in the non-oil economy is expected to reach 3.5 percent, mainly due to the expected increase in investment and poverty-reducing expenditure, financed by the substantial debt relief from the Enhanced HIPC (Highly Indebted Poor Countries) Initiative, the Multilateral Debt Relief Initiative, and the debt relief provided by a key bilateral donor. Oil output is also expected to increase in 2007. Inflationary pressures emerged in mid-2006 owing mainly to the upward adjustment of fuel prices and are expected to taper off in 2007."

"The mission reached understandings with the authorities on the 2007 budget including the wage policy and the investment budget, as well as the medium-term economic growth and budgetary projections. The mission also reached understandings on structural measures in the areas on public finance management, civil service reform, governance and transparency, and public enterprise reform."


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