IMF Executive Board Completes First Review of Extended Credit Facility Arrangement for Cameroon and Approves US$ 117.2 Million Disbursement
IMF News, December 20, 2017
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- Published: December 20, 2017
Review outcome and disbursement
- Executive Board completed the first review of the arrangement under the Extended Credit Facility (ECF) for Cameroon (Press Release No. 17/512).
- The completion of the review enables the disbursement of SDR 82.8 million (about US$ 117.2 million).
- Total disbursements under the arrangement now amount to SDR 207 million (about US$ 292.9 million).
Program size, objective, and approval
- Cameroon’s three-year arrangement size: SDR 483 million (about US$ about US$683.5 million, or 175 percent of Cameroon’s quota).
- Arrangement approval date: June 26, 2017 (see Press Release No.17/248).
- Program aims: support efforts to restore external and fiscal sustainability and lay foundations for sustainable, inclusive and private sector-led growth.
Waiver and conditionality
- The Executive Board approved the authorities’ request for waiving the non-observance of the continuous performance criteria on the ceiling on new non-concessional external debt contracted or guaranteed by the government.
- Waiver granted on the basis of corrective measures taken by the authorities.
Assessment of performance and risks (statement by Mr. Mitsuhiro Furusawa, Deputy Managing Director and Acting Chair)
- Overall assessment: “Cameroon’s performance under the ECF-supported arrangement has been broadly satisfactory.”
- Fiscal stance: Authorities remain fully committed to fiscal consolidation; the 2018 budget is in line with program objectives.
- Risks to targets: Meeting deficit targets may be challenging given weaker-than-envisaged revenue and spending pressures in 2018 and 2019.
- Regional context: Fiscal and external adjustment in Cameroon and other CEMAC countries, combined with external financing, have led to a gradual buildup in CEMAC reserves; the region’s recovery remains fragile.
- Leadership note: “Cameroon’s continued leadership of the regional effort will be essential to sustainability.”
Policy recommendations and priorities
- Revenue and spending:
- Stepped-up efforts to expand the non-oil revenue base.
- Better prioritizing spending while preserving social spending.
- Borrowing and debt sustainability:
- New non-concessional borrowing should be strictly limited and reserved for projects with a high social or growth impact.
- Stepped up efforts to enhance public financial and debt management to improve spending efficiency and control fiscal risks.
- Growth and structural reform:
- Implement the interim 2018–20 growth and employment strategy to boost private sector investment, job creation, and economic diversification.
- Prioritize reforms to enhance delivery of basic social services and protect the poor, improve the business environment, and maintain financial stability while expanding access to financial services.
Role of regional institutions and supportive policies
- Program support depends on implementation of supportive policies and reforms by regional institutions, including:
- Tighter monetary policy.
- Elimination of statutory advances.
- Sound bank regulation and supervision.
- Firm controls over the extension of credit to banks.
IMF Press Release No. 17/512 — December 20, 2017