Cameroon: IMF Executive Board Concludes Third Reviews of Extended Credit Facility and Extended Fund Facility Arrangements for Cameroon and Approves US$73 Million Disbursement
IMF News, March 8, 2023
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- Published: March 8, 2023
Key outcomes and program actions
- The Executive Board completed the Third Reviews of the Extended Credit Facility (ECF) and the Extended Fund Facility (EFF) arrangements.
- Disbursement approved: SDR 55.2 million (about US$73 million).
- Total disbursements under the arrangements to date: SDR 317.4 million (around US$420 million).
- The ECF/EFF arrangements were approved on July 29, 2021 for SDR 483 million (about US$689.5 million, or 175 percent of quota).
Recent macroeconomic performance and near-term outlook
- Growth estimated at 3.4 percent in 2022, supported by higher oil prices and non-oil production.
- Headline inflation estimated at 6 percent at end-2022.
- Overall fiscal deficit improved from 3 percent of GDP in 2021 to around 1.8 percent in 2022, reflecting higher oil revenues.
- Non-oil primary deficit deteriorated from 3.9 percent of GDP in 2021 to 4.5 percent in 2022, mainly due to increased fuel subsidies.
- Real GDP growth projected at 4.3 percent in 2023 and should average 4.5 percent in the medium term.
Program performance, waivers, and data issues
- Two performance criteria at end-December 2022 were missed; Executive Board approved waivers:
- Missed floor on the non-oil primary balance at end-December 2022 (higher oil prices and currency depreciation led to higher spending on the fuel subsidy).
- Missed continuous zero ceiling on the accumulation of new external payments arrears (delayed debt service payments due to end-year cash management issues, which have already been cleared).
- Waivers approved due to corrective actions taken by the authorities, and the temporary nature of the non-observance.
- A waiver of applicability was approved for three end-December 2022 performance criteria for which data are not yet available and there is no evidence they were not observed.
Policy messages and authorities’ commitments (Deputy Managing Director Antoinette Sayeh)
- Cameroon proved resilient to the COVID-19 pandemic; recovery has continued but faces increased challenges in an uncertain global environment.
- Need for resolute reform implementation to sustain macroeconomic stability and growth.
- Authorities committed to:
- Sustaining fiscal consolidation to help achieve macroeconomic stability while building foundations for inclusive and resilient growth.
- Reducing fuel subsidies, accompanied by measures to mitigate social impact.
- Mobilizing additional domestic non-oil revenue.
- Improving public financial management.
- Resolving and preventing external and domestic arrears and seeking concessional financing.
- Structural reform priorities to unlock growth potential:
- Effective and resolute implementation of reforms in the National Development Strategy.
- Enhance investment efficiency.
- Strengthen financial inclusion.
- Improve the business climate.
- Strengthen transparency, governance, and the anti-corruption framework.
- Ensure financial sector stability.
- Emphasis that mitigation measures to protect the vulnerable will be critical.
Selected economic and financial indicators (as presented)
- GDP at constant prices (annual percentage change, unless otherwise indicated): 3.6 3.8 3.4 4.6 4.3 4.4 4.5 4.7
- Oil GDP at constant prices: -3.2 4.2 -5.1 -3.0 0.7 1.1 0.3
- Non-Oil GDP at constant prices: 4.8
- GDP deflator: 3.3 2.4 3.0 2.0
- Nominal GDP (at market prices, CFAF billions): 25,158 27,389 27,210 29,325 29,749 32,393 34,866 37,226 39,777
- Oil (CFAF billions): 801 1,187 1,073 1,090 907 862 814 777 747
- Non-Oil (CFAF billions): 24,357 26,201 26,137 28,235 28,841 31,531 34,052 36,449 39,030
- Consumer prices (average): 2.3 5.3 2.8 5.9
- Consumer prices (eop): 3.5 4.1 6.0 2.9 5.7 3.7 2.1
- Broad money (M2): 17.2 15.6 11.4 10.1 8.1 9.9 8.0 7.1 8.2
- Net foreign assets 1/: 5.1 7.7 4.0 1.0 1.8
- Net domestic assets 1/: 12.9 10.5 6.1 7.0 5.4
- Domestic credit to the private sector: 9.7 9.1 13.6 12.4 8.8 7.4 6.9 6.7
- Gross national savings (percent of GDP): 14.0 16.3 15.9 17.3 16.6 17.9 19.0 20.4
- Gross domestic investment (percent of GDP): 18.4 17.4 20.0 18.8 19.6 20.6 21.6 22.8
- Public investment (percent of GDP): 5.2 5.0 6.3
- Private investment (percent of GDP): 13.4 13.2 12.2 14.6 13.8 14.1 14.8 15.2 16.0
- Total revenue (including grants, percent of GDP): 15.4 16.1 15.5 15.3
- Oil revenue (percent of GDP): 1.9 2.7 2.2 1.7 1.6
- Non-oil revenue (percent of GDP): 11.8 12.0 12.8 13.1 13.7
- Overall fiscal balance (payment order basis, excluding grants, percent of GDP): -2.5 -2.4 -0.5 -1.1 -0.9 -0.8 -1.2
- Overall fiscal balance (payment order basis, including grants, percent of GDP): -1.9 -1.8 -0.2 -0.6 -0.3 -0.7
- Overall fiscal balance (cash basis, percent of GDP): -2.7 -2.8 -1.0 -1.6 -1.4 -2.3 -1.3
- Non-oil primary balance (payment order basis, percent of GDP): -3.9 -4.0 -4.5 -2.2 -1.7
- Trade balance (percent of GDP): 0.4
- Oil exports (percent of GDP): 4.9 7.5
- Non-oil exports (percent of GDP): 8.3 9.4 8.9 8.7 7.6 7.8
- Imports (percent of GDP): 14.4 17.6 15.7 14.7 13.9 13.5
- Current account balance (excluding official grants, percent of GDP): -4.2 -2.6
- Current account balance (including official grants, percent of GDP): -2.1
- Terms of trade: -7.1 -8.4
- Stock of public debt (percent of GDP): 46.8 44.0 46.4 40.8 42.8 40.4 38.5 37.5 37.2
- Of which: external debt (percent of GDP): 31.7 31.2 32.7 30.3 30.5 29.7 29.1 29.2 29.4
Source: IMF press release, March 8, 2023.