IMF Executive Board Approves US$666.2 Million Arrangement Under the Extended Credit Facility for Cameroon
IMF News, June 26, 2017
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- Published: June 26, 2017
Executive Board decision and financing
- Approved a three-year arrangement under the Extended Credit Facility (ECF) for SDR 483 million (about US$666.2 million, or 175 percent of Cameroon’s quota).
- Immediate disbursement: SDR 124.2 million (about US$171.3 million) made available to Cameroon upon approval.
- Remaining amount to be phased in over the duration of the program, subject to semi-annual program reviews.
Program objectives and IMF assessment
- Program aims to restore external and fiscal sustainability and lay foundations for sustainable, private sector-led growth.
- Emphasis on addressing Cameroon’s large balance of payments need and contributing to rebuilding regional reserves.
- IMF Deputy Managing Director and Acting Chair Mitsuhiro Furusawa highlighted:
- Cameroon hit by twin oil price and security shocks since 2014, causing a sharp drop in pooled international reserves.
- Resulting challenges: decelerating growth, declining fiscal and external buffers, and rapidly-rising public debt.
- Authorities’ leadership in coordinating regional response to maintain CEMAC monetary arrangement integrity.
- Program success contingent on implementation of supportive policies and reforms by regional institutions.
Core policy pillars of the ECF-supported program
- Frontloaded fiscal consolidation to strengthen fiscal and external buffers, while protecting social spending and social safety nets.
- Structural fiscal reforms to:
- Expand the non-oil revenue base.
- Improve efficiency of public investment and the quality of the budgetary system.
- Mitigate fiscal risks from contingent liabilities.
- Reforms to accelerate private sector-led economic diversification and bolster financial sector resilience, including measures to maintain financial stability and boost financial inclusion.
Fiscal and public financial management measures
- Better prioritization of public investment, focusing on infrastructure projects essential for diversification.
- Rationalization of government spending on goods and services while supporting expansion of essential social expenditure and safety nets.
- Strengthen budget credibility and transparency through publication of regular reports on budget execution.
- Strengthen treasury management, strictly limit and eventually eliminate resort to exceptional procedures.
- Improve efficiency in planning, executing, and monitoring public investment projects.
- Public debt management to reduce pace of debt accumulation, tilt new borrowing toward more concessional financing, and closely monitor contingent liabilities.
Recent economic developments (summary)
- Cameroon, largest economy in CEMAC, hit since 2014 by slump in oil prices and increased security threats.
- Consequences: decline in oil revenue, increased security and humanitarian spending, continued infrastructure programs, widening fiscal and current account deficits, rapid accumulation of external debt.
- Growth: weakened to 4.7 percent in 2016, from 5.8 percent in 2015 and 5.9 percent in 2014.
- Inflation: 0.3 percent at end 2016; 0.4 percent in March 2017; expected to stay below CEMAC convergence criterion of 3 percent in the medium-term.
- Fiscal deficit: rose to 6.5 percent in 2016, from 2 percent of GDP in 2015, largely driven by surge in capital spending and decline in revenues.
Key economic indicators and projections (selected figures from Cameroon: Selected Economic Indicators, 2015-20)
- GDP at constant prices:
- 2015: 5.8
- 2016: 4.7
- 2017 (Proj.): 4.0
- 2018 (Proj.): 4.6
- 2019 (Proj.): 5.0
- 2020 (Proj.): 5.1
- Oil GDP at constant prices:
- 2015: 28.1
- 2016: -4.5
- 2017 (Proj.): -2.4
- 2018 (Proj.): -0.1
- 2019 (Proj.): -3.4
- 2020 (Proj.): -3.8
- Non-oil GDP at constant prices:
- 2015: 4.9
- 2016: 4.3
- 2017 (Proj.): 4.8
- 2018 (Proj.): 5.3
- 2019 (Proj.): 5.5
- 2020 (Proj.): 5.1
- Consumer prices (average):
- 2015: 2.7
- 2016: 0.7
- 2017 (Proj.): 1.1
- 2018 (Proj.): 1.4
- 2019 (Proj.): 2.0
- 2020 (Proj.): (not listed)
- Broad money (M2):
- 2015: 9.1
- 2016: 5.6
- 2017 (Proj.): 3.3
- 2018 (Proj.): 5.7
- 2019 (Proj.): 6.4
- 2020 (Proj.): 7.5
- Domestic credit to the private sector:
- 2015: 12.8
- 2016: 9.3
- 2017 (Proj.): 10.8
- 2018 (Proj.): 11.2
- Central government operations (percent of GDP):
- Total revenue and grants:
- 2015: 17.9
- 2016: 16.3
- 2017 (Proj.): 16.7
- 2018 (Proj.): 17.3
- 2019 (Proj.): 17.6
- 2020 (Proj.): 17.7
- Total expenditure:
- 2015: 19.9
- 2016: 22.8
- 2017 (Proj.): 20.1
- 2018 (Proj.): 19.8
- 2019 (Proj.): 19.6
- 2020 (Proj.): 19.3
- Overall fiscal balance (payment order basis):
- 2015: -2.0
- 2016: -6.5
- 2017 (Proj.): -2.5
- 2018 (Proj.): -1.9
- 2019 (Proj.): -1.6
- External sector:
- Current account balance, including grants:
- 2015: -4.1
- 2016: -3.6
- 2017 (Proj.): -3.0
- 2018 (Proj.): -2.7
- 2019 (Proj.): -2.2
- Public debt:
- Stock of public debt:
- 2015: 33.0
- 2016: 34.1
- 2017 (Proj.): 36.1
- 2018 (Proj.): 35.1
- Of which: external debt:
- 2015: 22.7
- 2016: 26.6
- 2017 (Proj.): 29.2
- 2018 (Proj.): 31.1
- 2019 (Proj.): 31.2
- Memorandum items (Nominal GDP, CFAF billions):
- 2015: 16,807
- 2016: 17,386
- 2017 (Proj.): 18,242
- 2018 (Proj.): 19,273
- 2019 (Proj.): 20,498
- 2020 (Proj.): 21,925
- Oil and Non-Oil nominal GDP (CFAF billions):
- Oil:
- 2015: 876
- 2016: 700
- 2017 (Proj.): 917
- 2018 (Proj.): 913
- 2019 (Proj.): 867
- 2020 (Proj.): 831
- Non-Oil:
- 2015: 15,931
- 2016: 16,686
- 2017 (Proj.): 17,325
- 2018 (Proj.): 18,360
- 2019 (Proj.): 19,630
- 2020 (Proj.): 21,094
Background and memorandum notes
- Cameroon became a member of the IMF on July 10, 1963, and has an IMF quota of SDR 276 million.
- Projections for oil export prices reflect movements in the Average Petroleum Spot Price (APSP) of three types of crude oil (Dated Brent, West Texas Intermediate, and the Dubai Fateh), with no discount.
- Projections are taken from an update to the 2015 Debt Sustainability Analysis (DSA), which excludes the stock of debt on which France provided debt relief under the "Contrat de désendettement et de développement" (C2D).
- Crude oil volumes are augmented as of 2018 with natural gas exports of 60 million standard cubic feet per year.
Press Release No. 17/248, June 26, 2017.