## IMF Staff Concludes Visit to Cameroon

_IMF News, August 30, 2017_

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## Bibliographic details
- Published: August 30, 2017

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### Mission background and ECF program
- Press Release No. 17/335; mission dates: August 22–29, 2017.
- IMF staff team led by Corinne Deléchat visited Yaoundé to review recent economic developments and discuss the 2018 budget and medium-term budget framework.
- On June 26, 2017, the IMF Executive Board approved a three-year arrangement under the Extended Credit Facility (ECF) with Cameroon for SDR 483 million (about US$666 million) or 175 percent of Cameroon’s IMF quota.
- The Executive Board’s decision enabled a disbursement of SDR124.2 million (about US$171.3 million) in early July. The remaining amount will be phased over the duration of the program, subject to semi-annual reviews.
- The mission noted that the program will support the authorities’ reform plan to rebuild fiscal and external buffers and lay the foundations for sustainable, private sector-led growth, and contribute to restoring and preserving external stability for the Central African Economic and Monetary Union (CEMAC).

### Recent economic developments and outlook
- Economic growth for 2016 revised downward to 4.5 percent (from 4.7 percent) due to lower oil sector activity.
- Growth in 2017 is projected by staff to continue to decelerate to slightly under the initial projection of 4 percent, mainly owing to the continued decline in oil production and delays in the start of operations of the new natural gas field.
- Non-oil growth was supported by strong industrial production owing to improved energy supply and by a good performance of the primary sector, though other indicators such as private sector credit and tax revenue indicate weaker activity.
- Inflation remains low at 0.6 percent as of end-June (year-on-year).
- Trade balance continues to improve due to higher cocoa, timber and aluminum exports while imports have fallen somewhat.
- Economic outlook for 2018: growth should improve to about 4.2 percent, due to the entry into production of the new offshore natural gas platform.
- Medium-term growth projection: should gradually increase further to 5-5½ percent as key infrastructure projects are completed, including hydroelectrical power plants, the deep-sea port and roads.
- Construction related to the 2019 African Nations Cup (ACN) expected to contribute positively to activity, albeit temporarily.

### Risks to the outlook
- External and domestic downside risks explicitly identified:
  - the possibility of a new round of lower commodity prices notably oil, cocoa and coffee;
  - a resurgence of security challenges;
  - further delays in the coming on stream of large infrastructure projects.

### Program performance, fiscal outlook, and budget preparations
- Pending confirmation during the first program review in October, performance under the ECF-supported program has remained in line with the end-June quantitative targets.
- Government has implemented key structural measures under the program, including:
  - the regular publication of the petroleum products price structure;
  - enhanced cooperation between customs and tax administrations.
- Budget implementation risks for H2 2017:
  - could be impacted by an additional decline in oil production and revenue, and associated lower trade taxes;
  - non-oil revenue could be under pressure from weaker activity.
- Given tight banking system liquidity, timely disbursement of planned external budget support will be key to ensure adequate budget financing.
- Staff assessment: the program’s fiscal targets for the second half of 2017 remain within reach, provided:
  - cautious budget execution continues;
  - additional tax collection efforts;
  - identification of contingency measures in case revenue shortfalls materialize.
- Preparation of the 2018 budget progressing well and in accordance with the budget calendar.
  - Authorities have revised their projections of revenue downward to take into account the lower contribution of the oil sector.
  - The mission urged authorities to revise spending plans accordingly and endeavor to increase nonoil tax revenue by widening the tax base.

### Mission engagements and next steps
- The team will return to Yaoundé in October to conduct discussions for the first review of the Extended Credit Facility for Cameroon.
- The team met with:
  - 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;
  - and other senior officials and representatives of the diplomatic community, development partners and private sector.
- The mission expressed thanks to the Cameroonian authorities for their hospitality, cooperation, and constructive and frank dialogue.

*IMF Staff Concludes Visit to Cameroon — Press Release No. 17/335, August 30, 2017.*

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## References

- [Republic of Congo and the IMF](http://www.imf.org/external/country/COG/index.htm)
- [Republic of Equatorial Guinea and the IMF](http://www.imf.org/external/country/GNQ/index.htm)
- [Cameroon and the IMF](http://www.imf.org/external/country/CMR/index.htm)
- [Central African Republic and the IMF](http://www.imf.org/external/country/CAF/index.htm)
- [Chad and the IMF](http://www.imf.org/external/country/TCD/index.htm)
- [Gabon and the IMF](http://www.imf.org/external/country/GAB/index.htm)
- [Press Releases](https://www.imf.org/en/news/searchnews)
- [PRESS CENTER](http://presscenter.imf.org/)
- [Press Release 17/248](http://www.imf.org/en/News/Articles/2017/06/26/pr17248-imf-executive-board-approves-arrangement-under-the-extended-credit-facility-for-cameroon)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2017/08/30/pr-17335-imf-staff-concludes-visit-to-cameroon_