IMF Executive Board Completes Fifth Reviews under Extended Credit Facility and Extended Fund Facility for Cameroon and Concludes 2023 Article IV Consultation

IMF News, December 20, 2023

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Published: December 20, 2023

Program actions and financing

The Executive Board completed the Fifth Reviews under the Extended Credit Facility (ECF) and the Extended Fund Facility (EFF) arrangements.
Approved a 12-month extension of the ECF and EFF arrangements (from July 28, 2024, to July 28, 2025).
Approved an augmentation of access by SDR 110.4 million (about US$ 147.6 million) over the extension.
Completion of the Fifth Reviews allows for immediate disbursement of SDR 55.2 million (about US$ 73.8 million).
Total disbursements under the arrangements to date: SDR 427.8 million (around US$ 571.9 million).
Original program size: US$ 689.5 million, three-year blended arrangements approved on July 29, 2021.

Macroeconomic developments and projections

Real GDP growth:
- 2022: 3.6 percent (estimated)
- 2023: 4 percent (expected)
- 2024–2028: projected at 4.2, 4.3, 4.5, 4.6 (and subsequent annual figures provided in Table 1)
Inflation:
- Consumer prices (end of period): 7.3 percent at end-2022; projected 6.2 percent by end-2023.
- Consumer prices (average): 6.2 percent (2022); 7.2 percent (2023); subsequent projections in Table 1.
Fiscal outcomes:
- Overall fiscal deficit (payment order basis) excluding grants: -1.5 (2022), -1.1 (2023), -1.0 (2024), -0.7 (2025), -0.6 (2026), -0.9 (2027).
- Overall fiscal balance (cash basis): -1.6 (2022), -2.4 (2023), -2.3 (2024), -1.4 (2025), -1.2 (2026), -2.0 (2027), -1.9 (2028).
- Non-oil primary balance (payment order basis, percent of non-oil GDP): -3.9 (2022), -2.5 (2023), -1.7 (2024).
- Total revenue (including grants) as percent of GDP: 15.9 (2022), 16.0 (2023), 15.5 (2024), 15.7 (2025), 15.8 (2026).
- Non-oil revenue (percent of non-oil GDP): 12.6 (2022), 13.4 (2023), 14.3 (2024).
Public debt:
- Stock of public debt (percent of GDP): 45.3 (2022), 43.2 (2023), 41.8 (2024), 41.1 (2025), 39.0 (2026), 36.1 (2027), 34.1 (2028), 32.6 (subsequent), 31.4 (later projection as in Table 1).
- External debt (percent of GDP): 30.8 (2022), 30.7 (2023), 29.2 (2024), 29.7 (2025), 28.5 (2026), 27.0 (2027), 26.0 (2028), 25.5, 25.4 (as detailed in Table 1).
External sector:
- Current account balance excluding official grants: -3.7 (2022), -3.3 (2023), -3.1 (2024), -2.9 (2025), -2.7 (2026), -2.8 (2027).
- Trade components and other series are presented in Table 1.

Program performance and conditionality

The ECF-EFF arrangements continue to anchor the authorities’ economic and fiscal program; implementation has been broadly on track.
A waiver was approved for nonobservance of the performance criterion on the non-accumulation of new external payments arrears on grounds the breach was temporary and minor (minor and temporary delays on two debt service payments).
Completion of the sixth review will be conditional on the implementation of critical policy assurances at the Union level, as established in the December 2023 Union‑wide background paper.

Policy priorities and staff recommendations

Fiscal policy and public finance:
- Maintain a fiscal consolidation path consistent with program objectives.
- Create additional room for productive investment and social spending through greater non-oil revenue mobilization, enhanced investment efficiency, improved public financial management, and gradually phasing out fuel subsidies while mitigating impacts on the vulnerable.
- Improve cash management and limit spending through exceptional procedures.
- Strictly limit recourse to direct interventions and exceptional spending procedures; limit non‑concessional borrowing.
Debt management:
- Address high risk of debt distress and debt vulnerabilities.
- Implement timely restructuring of the public oil refining company (SONARA).
Financial sector:
- Reduce banks' exposure to sovereign risk and ensure banks account adequately for sovereign risk in coordination with the Banking Commission of Central Africa (COBAC).
- Strengthen financial sector stability and inclusion.
Structural reforms:
- Accelerate reforms to unlock growth potential, including improving the business climate and removing regulations that hinder competition to enhance market flexibility and formalization.
- Invest in human capital and infrastructure, and strengthen institutions.
Governance and anti-corruption:
- Strengthen governance, transparency, and the anti‑corruption framework, including the AML/CFT framework.
- Publication of the governance diagnostic report noted as an important step.
Climate policy:
- Mainstream climate agenda in national institutional, regulatory, and budget frameworks.
- Advance climate change mitigation and adaptation measures in line with Cameroon’s commitments under the Paris Agreement.

Executive Board assessment and concluding remarks

Directors agreed with the thrust of the staff appraisal, commended authorities for maintaining stability amid external headwinds and internal fragilities, but noted mixed program performance and called for strengthened implementation.
Emphasized the need for deep public financial reforms, gradual phasing-out of fuel subsidies with mitigation measures, strengthened domestic non‑oil revenue mobilization, and enhanced public expenditure efficiency and prioritization.
Urged coordination with COBAC on sovereign exposure and called for timely implementation of SONARA restructuring.
Welcomed authorities’ plans for structural transformation, export diversification, and integration of climate considerations.
Noted support from CEMAC regional institutions is critical; sixth review conditional on Union-level policy assurances.
Next Article IV Consultation expected to be held in accordance with the Executive Board decision on consultation cycles for members with Fund arrangements.

Source: Press Release No. 23/469, IMF Communications Department (December 20, 2023).

References

Credit Facility](https://www.imf.org/en/About/Factsheets/Sheets/2016/08/02/21/04/Extended-Credit-Facility)