## IMF Staff and the Cameroonian Authorities have Reached Staff-Level Agreement on the Third Review of the Extended Credit Facility and Extended Fund Facility for Cameroon _IMF News, January 30, 2023_ ## Source details **Canonical URL:** [IMF Staff and the Cameroonian Authorities have Reached Staff-Level Agreement on the Third Review of the Extended Credit Facility and Extended Fund Facility for Cameroon](https://www.imf.org/en/news/articles/2023/01/30/pr2324-cameroon-imf-staff-cameroonian-authorities-reached-sla-third-review-ecf-eff) ## Other formats - [Markdown version](/en/news/articles/2023/01/30/pr2324-cameroon-imf-staff-cameroonian-authorities-reached-sla-third-review-ecf-eff/index.md) - [Structured JSON version](/en/news/articles/2023/01/30/pr2324-cameroon-imf-staff-cameroonian-authorities-reached-sla-third-review-ecf-eff/index.json) - [Bundle manifest](/en/news/articles/2023/01/30/pr2324-cameroon-imf-staff-cameroonian-authorities-reached-sla-third-review-ecf-eff/bundle-manifest.json) ## Bibliographic details - Published: January 30, 2023 --- ### Staff-level agreement and financing - IMF staff and Cameroonian authorities reached staff-level agreement on economic policies to conclude the third review of the program under the ECF and EFF arrangements. - Cameroon will have access to SDR 55.2 million (about US$74.6 million) in financing once the review is formally completed by the IMF Executive Board in early March 2023. - The staff report will be prepared based on the mission’s preliminary findings and, subject to management approval, will be presented to the IMF's Executive Board for discussion and decision. ### Macroeconomic outlook and recent performance - Growth is estimated at 3.4 percent in 2022 and is projected to reach 4.3 percent in 2023. - Following an increase of 3.6 percent in 2021, real GDP growth is expected to remain stable at 3.4 percent in 2022. - Headline inflation is expected to reach 6 percent at end-2022, mainly driven by food prices due to higher import costs as well as domestic supply pressures. - Inflation is projected to remain at about 6 percent at end-2023. - The overall fiscal deficit is expected to decline to 1.7 percent of GDP in 2022. - The public debt-to-GDP ratio is estimated at 46.3 percent at end-2022. - The authorities aim to further reduce the non-oil primary fiscal deficit to 2.2 percent of GDP and contain public debt at 43 percent of GDP in 2023. ### Fiscal policy, revenues, and fuel subsidies - The performance of non-oil tax revenue is expected to offset the increase in current spending mainly from higher fuel subsidies. - Fuel subsidies are estimated to reach CFAF 800 billion (2.9 percent of GDP) in 2022. - The authorities recognized the need to reduce costly fuel subsidies to create fiscal space for productive investment and social spending. - The statement highlights that fuel subsidies represent: - six times the budget allocated to agriculture, - four times that to health, - over three times that to energy and water. - Fuel subsidy reform should be accompanied by measures to mitigate the impact on the most vulnerable, including cash transfers. - The authorities agreed on the need to further mobilize domestic non-oil revenues through widening the tax base. ### Structural reforms, public investment, and governance - The authorities committed to accelerating structural reforms to unlock Cameroon’s growth potential and create fiscal space for priority spending, especially infrastructure to support the SND30 objectives. - Priorities include: - sharply accelerating the pace of structural reforms, - improving the business climate for private sector-led inclusive and resilient growth, - reviewing tax policy to mobilize domestic non-oil revenues and broaden the tax base, - strengthening public financial management to ensure disciplined budget execution and complete major infrastructure projects, especially in the transport and energy sectors, - continuing progress in the financial management of public enterprises and the rehabilitation of SONARA. - The mission welcomed important steps to strengthen transparency and governance, especially the Supreme Court’s Audit Bench. ### Risks, external environment, and reserves - The recovery is subject to greater risks with spillovers from Russia’s war in Ukraine, including inflationary pressures, supply chain disruptions, and a tightening of global financial conditions. - Prolonged shortages and high prices of fertilizers have raised food security challenges. - The mission welcomed authorities’ efforts to ensure adequate supplies of fertilizer for the harvest, supported by the World Bank and African Development Bank. - The mission noted the authorities’ commitment to policies consistent with the stability of the CEMAC region’s monetary arrangement, including rebuilding foreign reserves at the Bank of Central African States (BEAC). - Authorities are working to strengthen compliance with foreign exchange regulations notably regarding the repatriation of export earnings, while not impeding legitimate payments overseas. ### Mission, consultations, and next steps - An IMF team, led by Cemile Sancak, IMF Mission Chief for Cameroon, visited Yaoundé from January 5-18 and held virtual meetings from January 19-27. - The mission met with the Prime Minister, Joseph Dion Ngute; the Minister of State and Secretary General of the Presidency, Ferdinand Ngoh Ngoh; the Minister of Finance, Louis Paul Motaze; the Minister of the Economy, Planning, and Regional Development, Alamine Ousmane Mey; the National Director of the BEAC, Emmanuel Nkoa Ayissi; other senior officials; and representatives of development partners, the diplomatic community, the private sector, civil society, and unions. - The mission thanked the Cameroonian authorities for their cooperation and the frank and constructive dialogue. - Conclusion of the third review by the IMF Executive Board scheduled in early March 2023 would enable the disbursement of SDR 55.2 million (about US$74.6 million). *IMF Communications Department — Press Release No. PR23/24, January 30, 2023.* --- ## References - [Cameroon and the IMF](http://www.imf.org/external/country/CMR/index.htm) - [Press Releases](https://www.imf.org/en/news/searchnews) - [PRESS CENTER](http://presscenter.imf.org/) - [https://www.imf.org/en/home](https://www.imf.org/en/home) _Source: https://www.imf.org/en/news/articles/2023/01/30/pr2324-cameroon-imf-staff-cameroonian-authorities-reached-sla-third-review-ecf-eff_