IMF Staff Initiates Discussion with Cameroon on an Economic Program Supported by the Fund

IMF News, March 7, 2017

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Canonical URL: IMF Staff Initiates Discussion with Cameroon on an Economic Program Supported by the Fund

Press Release No. 17/76
Mission dates: An IMF team, led by Ms. Corinne Deléchat, visited Yaoundé from February 20–March 6, 2017.
Purpose: To hold discussions toward a three-year economic and financial program for Cameroon (through 2019).
Statement status: End-of-Mission press release conveying preliminary findings of IMF staff; views are those of IMF staff and do not necessarily represent the views of the IMF’s Executive Board.

The medium-term economic outlook remains positive, as Cameroon enjoys a relatively diversified economy.
Key infrastructure projects coming on stream: Lom Pangar hydroelectric dam, the deep sea port of Kribi, and the Kribi gas plant.
Negative shocks affecting Cameroon:
- Sharp decline in commodity prices.
- Security threats in the Lake Chad basin.
- Civil unrest in the neighboring Central African Republic (until recently).
Consequences of shocks:
- External and fiscal balances negatively impacted.
- Public debt has risen rapidly.
- External and fiscal buffers have declined significantly.
Contextual note: The team follows the December 23 summit in Yaoundé, where CEMAC heads of state agreed on the need for a resolute and concerted effort to preserve macroeconomic stability in the region, and to initiate discussions with the IMF and other development partners.

Fiscal and debt management:
- Decisive fiscal and debt management policies are needed to preserve macroeconomic stability.
- Given the rapid increase in public debt, focus on reducing the pace of new borrowing, particularly on non-concessional terms.
Revenue and spending:
- Continue implementation of policies to increase non-oil domestic revenue.
- Rationalize spending while preserving pro-growth and pro-poor expenditures.
- Prioritize investment spending with the highest growth dividends.
- The 2017 Finance Law is noted as an important step in this direction.
Social protection:
- Protect and even increase social spending in favor of the most vulnerable groups.
- Staff welcomed the authorities’ plans to scale up their successful social safety nets program.
Structural reforms:
- Ambitious structural measures are critical to boost private sector investment and support inclusive growth.
- Enhance the business environment to boost private sector investment and economic diversification.
Spending efficiency:
- Enhance spending efficiency, in particular by prioritizing investment spending with the highest growth dividends.

The IMF team and Cameroonian authorities discussed an economic program through 2019 that would lay out a path to sustained economic recovery and higher and more inclusive growth.
Discussions will continue to reach an understanding on the full set of policies that could form the basis for an IMF-supported economic program.
The team and the authorities have made good progress in discussing measures to strengthen economic outcomes, enhance the business environment, and achieve more inclusive growth.

Minister Secretary General at the Presidency Ferdinand Ngoh Ngoh
Minister Secretary General at the Prime Minister’s Office Seraphin Fouda
Minister of Finance Alamine Ousmane Mey
Minister of Economy, Planning, and Territorial Development Louis Paul Motaze
Governor of the Bank of Central African States (BEAC), Mahamat Abbas Tolli
Other senior officials and representatives of the diplomatic community, development partners and private sector

IMF Press Release No. 17/76 — March 7, 2017