IMF Staff Completes Review Mission to Cameroon

IMF News, November 8, 2019

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The IMF team reached staff-level agreement with the authorities on the fifth review of the implementation of Extended Credit Facility (ECF) arrangement.
The IMF Executive Board could consider the fifth review in mid-December 2019.
Completion of the fifth review would enable a sixth disbursement of SDR 55.2 million (about US$ 76.5 million).
The IMF team was led by Mr. Amadou Sy and visited Yaoundé during October 28—November 8, 2019.

Growth in 2019 is estimated at 3.9 percent, slightly lower than envisaged.
Overall economic growth is estimated to reach 3.9 percent in 2019, from 4.1 percent in 2018.
The oil and gas sector is expected to grow by 6.0 percent after three years of deceleration.
Non-oil activity is estimated to soften at 3.8 percent in 2019 from 4.4 percent in 2018.
Inflation is trending up from 1.1 percent in 2018 to 2.3 percent in September 2019, (y/y), mainly owing to higher food prices and with strong regional variations.
Security challenges and the suspension of SONARA’s production since June 2019 are weighing on short-term growth prospects.
The rebound of the oil and gas sector compensated for the subdued performance of the non-oil sector.

The authorities are adjusting the 2019 fiscal projections to consider lower than projected non-oil fiscal revenue, while keeping the overall deficit anchored at 2.3 percent of GDP.
Fiscal performance in 2019 faces increased headwinds due to:
- security challenges,
- the delayed implementation of new tax measures,
- and SONARA’s financial difficulties.
The authorities are considering expanding the non-oil revenue base, including by:
- reducing tax exemptions,
- raising VAT efficiency,
- and improving tax and customs administration.
The authorities are committed to addressing risks from contingent liabilities, including from SONARA and other state-owned enterprises, and safeguarding debt sustainability including by continuing to increase the share of concessional loans in new borrowing.
Structural reforms are moving ahead, albeit with slow progress.

The medium-term outlook remains positive, with non-oil growth expected to gradually rise thanks to:
- the completion of the investments in infrastructure and energy projects,
- and a gradual resolution of the security crisis.
Fiscal consolidation over 2020-21, together with enhanced foreign exchange repatriation, will support a continued rebuilding of BEAC reserves.
Structural reforms to increase public investment efficiency, strengthen public enterprises and support private sector development will support the growth outlook going forward.

The team met with:
- Prime Minister Joseph Dion Ngute,
- Minister of State Secretary General at the Presidency Ferdinand Ngoh Ngoh,
- Minister of Finance Louis Paul Motaze,
- Minister of Economy, Planning, and Regional Development Alamine Ousmane Mey,
- BEAC National Director Eugene Blaise Nsom,
- and other senior officials.
The mission also met representatives of the diplomatic and donor communities as well of the private sector.
“The team wishes to thank the Cameroonian authorities for their hospitality, cooperation, and the constructive dialogue.”

IMF Communications Department — Press Release No. 19/406, November 8, 2019