Press Release No. Press Release 04/272

The following statement was issued earlier today in Yaoundé by an International Monetary Fund (IMF) staff mission:

A staff team from the International Monetary Fund, led by Ms. Doris Ross, visited Cameroon during December 3 -18, 2004. The team met with Prime Minister Inoni, Minister of State at the Presidency Atangana Mebara, Minister of Economy and Finance Abah Abah, and other senior officials of the government, members of the private sector, and donors to exchange views on recent economic developments and prospects for the Cameroonian economy, and discuss the ongoing cooperation between the IMF and Cameroon.

The IMF team welcomed the continued solid growth of Cameroon's economy amid low inflation. Despite this, Cameroon's fiscal position deteriorated significantly in 2003-04, putting at risk the macroeconomic stability that has been achieved in recent years. In particular, budget execution and the financial position of public enterprises weakened, which has led to the accumulation of domestic arrears. Furthermore, progress in structural and financial sector reforms has been mixed during this period. In the discussion, the team stressed the importance of strengthening budgetary and financial management performance in the public sector in the immediate period ahead. The team noted that the government's proposed 2005 budget is a first and important step to improve the use of public resources, foster economic activity, and increase the wellbeing of the population.

The authorities and the IMF team agreed that discussions should continue early next year on an economic program, whose sustained implementation could pave the way to a new arrangement under the IMF's Poverty Reduction and Growth Facility (PRGF). The successful implementation of a program supported by a new PRGF arrangement would enable Cameroon to reach its completion point under the Heavily Indebted Poor Countries Initiative, completing the debt reduction Cameroon has already obtained since the decision point in 2000.

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