For more information, see Cameroon and the IMF

The following item is a Letter of Intent of the government of Cameroon, which describes the policies that Cameroon intends to implement in the context of its request for financial support from the IMF. The document, which is the property of Cameroon, is being made available on the IMF website by agreement with the member as a service to users of the IMF website.

Yaoundé, December 6, 2000

Mr. Horst Köhler
Managing Director
International Monetary Fund
700 19th Street, N.W.
Washington, D.C. 20431

Dear Mr. Köhler:

1.  The government of Cameroon has implemented a medium-term economic and financial program (July 1, 1997–June 30, 2000), which was supported under a three-year Poverty Reduction and Growth Facility (PRGF) arrangement as approved by the IMF Executive Board on August 20, 1997. To consolidate the progress made since 1997, the government has decided to accelerate and widen its reform efforts, and has therefore adopted a new economic reform program for the period October 1, 2000–September 30, 2003.

2.  The attached memorandum outlines the policies and reforms that the government of Cameroon intends to adopt during the next three years. The main goal of the medium-term policies and reforms is to achieve a sustainable reduction in poverty through high economic growth, improved efficiency of public expenditure, well-targeted poverty reduction measures, and strengthened governance. In support of these objectives and policies, the government of Cameroon requests a three-year arrangement supported under the PRGF in an amount equivalent to SDR111.42 million (60 percent of quota).

3.  The government is preparing a poverty reduction strategy paper (PRSP) that will involve close consultation with the civil society, the private sector, NGOs and other development partners. Under this process, the medium-term policies will be further developed, building on the interim PRSP, which was sent to the Fund and the World Bank.

4.  A first review under the three-year arrangement will be completed by end-June 2001, focusing mainly on budgetary non-oil revenue performance and customs reform, oil revenue, and progress in strengthening public expenditure management and governance, as well as on the nonbank financial sector.

5.  The government believes that the policies described in the attached memorandum on economic and financial policies will allow it to achieve the objectives of its economic program for 2000/01–2001/02, but it stands ready to take any additional measures that may be appropriate for this purpose, in consultation with the Fund. The government will provide the Fund with such information as the Fund requests in connection with the implementation of the program. In addition, after the period of the arrangement and while Cameroon has outstanding obligations to the Fund under the arrangement, the government of Cameroon will consult with the Fund, at the initiative of the government or at the request of the Managing Director of the Fund, on it economic and financial policies.

Sincerely yours,

Peter Mafany Musonge
Prime Minister
Head of Government

Memorandum on Economic and Financial Policies for 2000/01–2001/02


Memorandum of Economic and Financial Policies

I.  Introduction

1.  Since 1996, the government of Cameroon has been implementing macroeconomic and structural reforms aimed at restoring internal and external viability, bringing the economy onto a sustainable growth path, and reducing poverty. Cameroon’s reform efforts regained momentum with the adoption by the government, in August 1997, of a medium-term economic and financial program (July 1, 1997-June 30, 2000), which was supported by the IMF under a three-year Poverty Reduction and Growth Facility (PRGF) arrangement. The government’s adjustment effort has also been supported by the World Bank, and other multilateral and bilateral donors and creditors.

2.  Implementation of the medium-term economic and financial program was satisfactory, enabling Cameroon to reach the decision point under the Heavily Indebted Poor Countries (HIPC) Initiative in October 2000. Overall, a critical mass of reforms was implemented with determination, allowing for considerable progress in terms of both restoring macroeconomic stability and enabling the promotion of higher rates of economic growth. Real GDP growth averaged 4½ percent per year during the program period; CPI-inflation has declined to less than 1 percent; and the external current account deficit (excluding official transfers) halved from 3 percent of GDP in 1997/98 to 1½ in 1999/2000, aided by an improvement in the terms of trade. The public finances situation has improved markedly as a result of the strengthening in oil and non-oil revenue mobilization and restrained expenditure policy. In the circumstances, the government ceased accumulating internal arrears, and relations with official external creditors were normalized. Other achievements under the medium term program included the acceleration of the privatization program, the rehabilitation of the domestic banking system, and an improvement in the foreign reserves position.

3.  Despite the progress made, Cameroon’s economic and financial situation remains vulnerable, and available data reveals that poverty continues to affect slightly more than 50 percent of the population. Although annual real GDP growth averaged about 5 percent during the last five fiscal years, income growth performance in Cameroon is still fragile and not inclusive, and access to basic social services is limited. The country’s economic and social development is still hampered by the heavy burden of the external debt, the remaining structural rigidities, high production costs, and weak governance.

4.  Against this backdrop, the Cameroonian government is determined to consolidate in the coming years the progress made by reinforcing its fiscal adjustment effort, deepening and completing its structural reform agenda, and tackling more forcefully governance and corruption, so as to achieve a higher level of sustainable economic growth, diversify the economy, reduce significantly poverty, and attain a durable financial viability. To this end, it has prepared an interim Poverty Reduction Strategy Paper (I-PRSP), based on an all-inclusive participatory process, with the assistance of the IMF, the World Bank and other donors, that outlines the government’s macroeconomic framework and matrix of policies for 2000/01–2003/04 (October 1, 2000–September 30, 2003). In support of its medium-term program, the government of Cameroon requests a new three-year arrangement under the Poverty Reduction and Growth Facility, as well as assistance from the World Bank and the other multilateral and bilateral donors.

II.  Medium-Term Policy Framework and Objectives

5.  As spelled out in the interim PRSP, the primary development goal of the government is to achieve a sustainable improvement in living standards and a significant reduction in poverty rates. Accordingly, the authorities intend to: (a) promote high rates of economic growth; (b) implement ambitious social policies, including well-targeted poverty reduction measures; (c) improve the efficiency of public expenditure; and (d) strengthen governance. In this context, the overriding goal of the authorities is to achieve the international goal of reducing poverty in half by 2015.

6.  The Cameroonian government’s macroeconomic objectives for the coming three years are to: (i) increase real GDP growth rate from an average of 5 percent per annum in recent years to 6 percent by 2002/03, thus allowing for an increase in per capita GDP of about 2-3 percent; (ii) contain consumer price inflation at 2 percent; and (iii) limit the external current account deficit (excluding official transfers) at about 3-32 percent of GDP. Successful implementation of the policy framework should enable a reduction in the rate of poverty, from approximately 50 percent in 1999/2000 to some 42 percent by 2003/04.

7.  To achieve the objectives specified above, the government is committed to pursue sound economic and financial policies, consolidate and deepen structural reforms, improve governance, and reduce corruption so as to ensure that public resources are effectively used, in particular in the priority areas of education, health, infrastructure, and social services. Cameroon’s growth strategy will aim at correcting structural weaknesses, stimulating economic activity and job creation, and strengthening and diversifying the production and export base by: (i) improving productivity and competitiveness through the broadening and completion of the privatization agenda and the reduction in the costs of doing business; (ii) creating a legal and regulatory environment that will help promote private sector development; (iii) furthering regional integration; and (iv) improving governance and transparency, and fighting corruption. In this context, gross domestic investment would rise from 16½ percent of GDP in 1999/2000 to about 19 percent by 2003/04, while domestic savings are expected to average 19 percent of GDP during the period.

8.  Public finances will be further strengthened through enhanced non-oil revenue mobilization and continued timely transfers of oil revenue to the budget, as well as improved public expenditure management. In particular, the government will intensify its efforts to reinforce the customs and tax administrations, reduce tax fraud, and broaden the tax base. On that basis, it is expected that non-oil revenue will increase by about 2 percentage points of GDP to 15 percent of GDP in 2003/04. Expenditure policy will aim at reinforcing absorption capacity, elaborating and implementing goal-oriented budget frameworks, and improving the efficiency of public expenditure. In this context, public spending will be contained at around 18½ percent of GDP during the program period, while budgetary allocations to the health, education, and other priority sectors are increased. Salary and wage policy will remain prudent, while taking into account the need to ensure that public servants are adequately remunerated. At the same time, efficiency in public investment will be increased through improvements in the identification and selection, monitoring, and execution of investment projects. A medium-term expenditure framework (MTEF) will be prepared, with the assistance from the World Bank and in concert with the Fund and other development partners, with a view to further strengthen expenditure policy and to better target poverty reduction efforts.

9.  In the financial sector, the government will pursue its ongoing reforms and follow up on the recommendations of the Financial Sector Assessment Program, with a view to consolidating sectoral stability and improving regulations and control of microfinance institutions. Financial deepening will be pursued through the launching of a transitory financial market. The government will continue to ensure that the monetary policy conducted at the regional level is consistent with the objectives of reduced inflation and strengthened zone-wide net foreign assets position. Additionally, the technical studies required for the reform of the social security system will be completed during the program period.

10.  At the regional level, the government will encourage further liberalization of the trade system. In particular, it will seek, in concert with the other members of the Communauté Économique et Monétaire de l’Afrique Centrale (CEMAC), to reduce the common external tariff to a maximum level of 20 percent, and to decrease the number of tariff bands from 5 to 4. The government will also support the ongoing efforts to adopt a single bank licensing system and a common investment charter throughout the CEMAC zone.

11.  The positive effects of these macroeconomic and structural policies on growth and poverty will be reinforced by specific policies and measures aimed at ensuring that the benefits of growth will reach all segments of society, particularly the poor and disadvantaged. Detailed objectives and policies for poverty reduction, including a matrix of actions, are reflected in the interim PRSP, with an emphasis on the areas of education, health, water and sanitation, infrastructure and rural development, delivery of quality social services, and improved governance. These policies and measures will be further developed in the full PRSP. The government will continue to increase budgetary resources to the priority sectors, while ensuring an effective and efficient use of debt relief under the HIPC Initiative.

III.  Program For 2000/01–2001/02

12.  Consistent with the medium-term framework, the primary macroeconomic objectives for the first year of the program supported by the PRGF arrangement, which covers the period October 1, 2000-September 30, 2001, are to: (i) contain CPI inflation at 2 percent; and (ii) limit the external current account deficit (excluding official transfers) at about 3–32 percent of GDP in 2000/01 and 2001/02. Real GDP growth is projected to reach 5.4 percent and 5.7 percent in 2000/01 and 2001/02, respectively. To attain these objectives, the government will implement the measures outlined below in the fiscal, monetary, structural reform, social policies and governance areas.

A.  Macroeconomic Policies

Fiscal policy

13.  Fiscal consolidation remains a cornerstone of the government program, with a view to achieving financial viability by enhancing non-oil revenue mobilization, improving the quality and efficiency of public expenditure, and strengthening expenditure control. The fiscal framework for 2000/01 reflects the favorable environment resulting from the current higher oil prices. The average oil price for Cameroon for 2000/01 is projected at US$28.3 a barrel, and oil revenue is now expected to amount to 7.2 percent of GDP, raising total revenue to 20.8 percent of GDP. As a result, the primary surplus is targeted at 7.6 percent of GDP and the overall fiscal balance, on a commitment basis and excluding (including) grants, at a surplus of 2.1 (2.5) percent of GDP. Part of the additional oil revenue will be used to accelerate the clearance of domestic arrears audited and validated by an independent and internationally reputed firm, and the remainder will be used to reduce net bank credit to the government.

14.  Despite the oil windfall, the government remains committed to continue to strengthen its capacity with respect to the mobilization of non-oil revenue. This will be achieved primarily through the strengthening and modernization of the domestic tax administration, including the broadening of the tax base, the strengthening of the value added tax (VAT), and the reform of forestry taxation policy.

15.  In the area of domestic taxation, the government will emphasize consolidation of the gains achieved under the previous PRGF program. In this context, the authorities, with the technical assistance of the IMF, French Co-operation and the European Union, intend to modernize the tax directorate management tools while broadening the tax base, universally enforcing tax provisions and obligations, rationalizing controls, simplifying procedures, and improving assistance to taxpayers. In particular, they will increase the allocation of staff and budgetary resources available to the Tax Department, and adopt a new code on tax procedures.

16.  In the forestry area, the government will ensure the implementation of the sectoral fiscal reforms introduced by the budget law of July 2000, emphasizing in particular: (i) securitization of fiscal and environmental liabilities for all valid exploration licenses; (ii) implementation of a system of adjudication for export quotas of unprocessed logs; (iii) implementation of a timber tax at the factory entrance (entrée usine) tax; (iv) phasing out the system of export processing enterprises (points francs); and (v) the institution of an intercommunity equalization fund financed by a portion of the annual forestry royalties. With respect to the securitization system, originally elaborated under CAS III and implemented since April 1999 with the support of the World Bank, the authorities will: (i) strengthen the monitoring of the geographical origin and the traffic of logs; and (ii) render operational the monitoring system for fiscal and environmental infractions, including the pursuit of contentious cases to the fullest extent stipulated by law. The government will also consolidate the improvements attained with respect to the system for awarding licenses, originally introduced during fiscal year 1999/00, and implement the standards regulating the delimitation, classification and planning of concessions, as well as communal forest lands. Finally, with a view to guaranteeing the sustainability of these reforms and ensuring that the institutional framework is in line with sectoral objectives, the government intends to complete the restructuring of l’Office National de Developpement des Forêts (ONADEF) and the other structures of the Ministry of Environment and Forestry (MINEF) relating to the forestry sector and environmental conservation.

17.  In the customs area, the government has been engaged in an ambitious reform program, including the implementation, since August 2000, of a single processing window, which has already registered satisfactory results. Additionally, the government will carry out other priority measures to improve the administration of customs and increase revenue, based on the recommendations of the IMF technical assistance mission of June 2000. In particular, it will ensure that physical and documentary controls for the release of goods are completed within 24 hours for imports and 6 hours for exports. With a view to reducing both costs and time delays at the port of Douala, the customs administration will adopt measures to facilitate progress towards the objective of reducing the time required for the processing of containerized merchandise to 7 days for imports and 2 days for exports. In addition, the Cameroonian authorities will reinforce the control and monitoring of special status traffic (transit, bonded warehouse (entrepôts), and temporary admission), and they will create a special unit at customs headquarters to monitor and control exemptions.

18.  Customs administration will generalize the use of the unique taxpayer identification number (TIN). With the assistance of the IMF, the government will take all the immediate steps necessary to secure the current computer system in order to limit access to authorized personnel only and to assure that all the preparation work for the introduction of a new system, PAGODE II, is done. A rigorous internal audit and inspection scheme will be set up, and a code of conduct will be adopted and effectively implemented. The procedures for close collaboration with the pre-shipment inspection company will be extended to ensure an effective monitoring of the transit trade. The other steps to be taken to boost tax yield, as well as measures to restructure and modernize the customs administration, are indicated in Annex I. The government will reinforce the control mechanism for both processed and unprocessed logs at both the Cameroon-Congo and the Cameroon-RCA borders, with the administrative assistance of the respective countries. In the context of securing forestry receipts, a synergy will be sought between the Directorates of Forestry, Tax and Customs, as well as with the railway company (CAMRAIL), with a view to ensuring coherence in the geographical origin of timber products and the applicable fiscal regime. Other measures to be implemented to ensure the restructuring and modernization of customs administration are listed in Annex I.

19.  On the expenditure side, the government will maintain the preference accorded to the priority sectors of education, health, rural development and basic infrastructure, with an emphasis on the allocation and efficient use of resources for the campaign against VIH/AIDS. Total expenditure, however, will be contained at 18.7 percent of GDP in 2000/01, due to prevailing weaknesses in the area of expenditure management. The share of education and health will be increased from an estimated outturn of 3.0 percent of GDP in 1990/00 to 3.5 percent in 2000/01, and further to 4.0 percent in 2001/02. The government will establish a medium-term budget framework within the social ministries (education and health, in particular), building on the detailed strategies previously developed with the assistance of the World Bank. These strategies include quantifiable targets, in the context of a three-year medium-term expenditure framework, that will be fully reflected in the budget starting in 2001/02.

20.  Regarding public expenditure management, the government will continue to implement the action plan adopted in December 1998 following the recommendations of IMF, the European Union, and other development partners. It will strengthen the institutional capacities of spending departments with respect to the programming, monitoring, and execution of operations, as well as the effectiveness and quality of expenditure. The government will prepare comprehensive quarterly reports on the financial and physical operations of the priority ministries, and it will carry out an annual financial and physical audit of the ministries of Education, Health, Public Works and Agriculture. It will also take steps to: (i) improve the monitoring of delegated credits; (ii) produce, on a monthly basis, high-quality treasury balances and budget execution tables; and (iii) improve the reliability of these instruments by making fully operational the electronic transfer of information between the main software applications used in the financial administrations. Regarding domestic arrears, the government has audited and validated the stock of official government arrears, and it will carry out the comprehensive multiyear settlement plan it has adopted (including cash payments of CFAF 213 billion in 2000/01 and securitization of the remainder). In this context, the government will continue its efforts to improve the budget preparation process and reinforce the operational capabilities of the spending agencies. Other measures in this area are listed in Annex I.

21.  The government will also pursue the reform of the procurement system. To this end, the government will: (i) render operational, by end-March 2001, the interim system which was elaborated in June 2000 on the basis of the modified procurement code; (ii) complete the selection of independent observers, through an international tender, and set up the operational procedures to carry out ex post independent audits; and (iii) draw up an action plan to carry out a more comprehensive reform of the procurement system on the basis of the recommendations of the World Bank’s Country Procurement Assessment Review in October 2000. The other measures to be implemented are listed in Annex I.

22.  To facilitate civil service reform, the government has completed a comprehensive physical and legal census of all civil servants. On the basis of the results from this census, the authorities intend to update the salary master file and implement the measures necessary to ensure this file remains current, rationalize personnel management, and assess appropriate staffing and salary levels. 

Monetary prospects and financial sector reform

23.  The monetary program for 2000/01 aims at further strengthening Cameroon’s contribution to the net foreign assets position of the BEAC, while providing room for an adequate increase in credit to the private sector. The continued improvement in the public finance situation will help reduce net bank credit to the government by CFAF 156 billion (2.5 percent of GDP); credit to the private sector is expected to increase by about 15 percent; and, with income velocity of money unchanged, money demand should expand by 10 percent. In conducting monetary policy, the authorities will ensure that the regional central bank will continue to rely exclusively on indirect instruments, strengthen the functioning of interbank and money markets, and maintain appropriate interest rate differentials between its intervention rates and the French money market rate.

24.  In the financial sector, the government will continue to support actions aimed at strengthening the intervention capabilities of the Central African Banking Commission (COBAC) and enhancing its independence. As the rehabilitation of the banking system is almost completed, the government will focus on strengthening the regulatory framework and prudential supervision of the nonbank financial sector, in particular the microfinance institutions. Efforts to register savings and loan cooperatives (COOPEC) for licensing purposes and COBAC approval will continue, and non-conforming cooperatives will be closed. The government will accelerate and complete the reform of the social security system by June 2002, on the basis of ongoing studies and in compliance with the sectoral strategy. In the insurance sector, the government will complete the restructuring/privatization of Société Camerounaise d’Assurances (SOCAR) by December 2000. All the liquidation operations managed by the Société de Recouvrement des Créances du Camerooun (SRC), with the exception of the BMBC, will be completed by end-December 2000, and the SRC itself will be restructured with its activities focused on asset recovery starting in July 2001. The government will adopt, by end-March 2001, a rehabilitation plan for the state-owned Postal Savings Bank and the Crédit Foncier du Cameroun, both of which are beset by a weak financial position. Additionally, the government will undertake a strategic audit of Société Nationale d’Investissement (SNI) with a view to redefining its area of activity by end-March 2001. Finally, the government will implement the appropriate recommendations resulting from the Financial Stability Assessment Program (FSAP), including the modernization of the payment system and the improvement of the judicial system, so as to strengthen the financial sector, ensure its viability and resilience, and improve financial intermediation.

External sector policies and debt management

25.  A key objective of Cameroon’s external policy remains to enhance external competitiveness and promote non-oil exports in order to achieve external viability and strengthen growth prospects. The current external account deficit (excluding official transfers) is expected to reach 3 percent of GDP in 2000/01, mainly on account of an expected pickup of imports related to the Chad-Cameroon pipeline project and to a slight increase in private and public sector consumption. The government is aware that the pursuit of prudent fiscal and credit policies, as well as the implementation of the envisaged efficiency-enhancing structural reforms, will be key to achieving the projected gradual strengthening of Cameroon’s external position.

26.  The authorities intend to complete the normalization of their relations with external creditors within this fiscal year. Of particular importance will be the finalization of the debt- and debt-service reduction operation with the London Club. To this end, following the completion of the joint report of the financial and legal advisors, the government intends to start negotiations in early 2001, after the sixth Paris Club rescheduling, with closure of the operation expected by the end of the fiscal year. With the assistance of its development partners, the government is committed to ensuring that the terms of any agreement with these creditors are comparable with those expected from the Paris Club under the enhanced HIPC Initiative.

B.  Structural and Sectoral Policies

27.  The government is determined to accelerate and broaden the scope of structural reforms in the agro-industry, public utilities, transport, and petroleum sectors, with a view to stimulating private sector investment, enhancing the competitiveness and efficiency of the economy, and boosting potential output growth. With the assistance of the World Bank, it expects to complete, within the next 12 months, the ongoing reforms and privatization in the agro-industrial and public utilities sectors. The successful bidders for the telecommunications company (CAMTEL) were selected in November 2000, while those for the electricity company (SONEL) will be selected by February 2001. The government will step up the reforms in the transport sector, aimed notably at improving the competitiveness of the economy, including the restructuring of the Port of Douala and the privatization of its activities in the industrial and commercial areas, in accordance with the calendar established with a World Bank technical assistance mission. The privatization of Cameroon Airlines will be relaunched. The authorities will strengthen the operations of the Road Fund and improve the programming of road maintenance work by carefully preparing the maintenance of unpaved rural roads and urban roads. They will also prepare a strategy of disengagement for the hotel sector and reinforce capacity at the agencies charged with regulating liberalized economic sectors.

28.  With a view to diversifying the economic base and increasing the value-added of domestic production, the authorities intend to define, with the assistance of their development partners, ambitious growth-oriented sectoral strategies taking into consideration Cameroon’s comparative advantage in the areas of agriculture, industry, mining and tourism. Accordingly, technical audits will be undertaken, and incentive systems favorable to private investment will be implemented. Additionally, the government will define a more active policy with respect to the promotion and diffusion of new information technologies, with a particular emphasis on enhancing economic productivity.

29.  In the petroleum sector, the government has implemented the key recommendations of the first two audits regarding computerization and harmonization of the accounts of the national oil company (SNH) with international accounting standards. With a view to enhance transparency in this sector, the government will continue to conduct annual financial audits of SNH, with the audit for 1999/2000 to be completed by end-February 2001 by an internationally reputed auditing firm. Similarly, the organizational and operational audit of SNH will be completed by end–December 2000, and on the basis of the recommendations, the authorities will prepare a strategy to refocus the activities of SNH by end-March 2001. In addition, an overall strategy defining the respective roles of both the public and the private sector in the petroleum sector will be prepared, with assistance from the World Bank, on the basis of the recommendations from the technical study on the institutional and regulatory framework. As a first step, the distribution segment of the market will be liberalized, and the publicly-held shares in, as well as management of, the petroleum storage facility (SCDP) will be transferred to the private sector by end-September 2001.

C.  Use of HIPC Relief and Social and Poverty Reduction Policies

30.  Regarding the use of HIPC resources, the government will focus on eight key sectors: education; health; sexually transmitted diseases, including VIH/AIDS; social affairs; rural development; provision of safe drinking water; sanitation and waste collection; and governance. In each of these areas, the government has developed detailed programs and projects in consultation with civil society and donors. In order to ensure an efficient use of these additional resources and their adequate monitoring, the government has worked out a “ring-fencing” mechanism, including a special Treasury account at the central bank, a monitoring committee with membership from the donor community and civil society, and regular independent audits (see Annex III). For 2000/01, total HIPC assistance is projected at CFAF 37 billion, of which CFAF 20 billion in grants, and the government is introducing a supplementary budget with CFAF 16 billion in current and CFAF 21 billion in capital expenditure. Table 1 in Annex III details the planned expenditures for the period 2000/01 to 2002/03.

31.  The main focus of the government’s social policies is to ensure that strengthened economic performance translates into tangible results in terms of poverty reduction, job creation, and genuine improvement in the economic welfare of the population as a whole. The core elements of the fight against poverty include the education and health sectors, quality social services delivery, urban sanitation, rural road infrastructure, and safe drinking water. The detailed spending plans prepared for the 2000/01 budget allow for a significant increase in outlays in real terms for the priority sectors, in line with the medium-term targets and taking into account the projected resources freed up by the HIPC debt relief. The full PRSP, which will be prepared in participatory manner, will be completed by end-November, 2001.

D.  Governance

32.  The government is determined to enhance transparency and accountability in its operations and to fight corruption. As spelled out in the recently adopted National Governance Program, which is annexed to the I-PRSP, the main objectives are to: (a) achieve greater transparency in the management of public affairs; (b) make managers more accountable; and (c) improve service delivery at the institutional level, with particular attention to bringing services closer to beneficiaries. Within these broad objectives, the government will place emphasis in the following areas: (i) improvement of the expenditure system including comprehensive reform of the procurement system; (ii) judicial reform to enhance the credibility of the Judiciary by strengthening its independence and internal control, including rendering operational, in a harmonious manner, the jurisdictional institutions called for in the Constitution; (iii) deconcentration of service delivery in key areas, including health, education, and basic infrastructure; (iv) establishing an anti-corruption coalition, which will include representatives from civil society, the private sector, the NGOs and other partners; (v) improvement of access to citizen information on public affairs; and (vi) implementation of community-level pilot projects.

33.  The program for 2000/01 will focus on public expenditure management, the procurement system, transparency in oil sector operations, and the privatization of public enterprises. Specific actions will include audits of SNH, physical and financial audits of the government procurement system, audits of the utilization of the HIPC resources, and audits of the Road Fund and the four key ministries (Education, Health, Public Works and Agriculture). In the forestry area, the audits will cover the operations of the Special Fund for forestry development. Transparency in this sector will be reinforced by the publication of the reports of the independent observer in the commission awarding timber concessions, annual reports on capacity building in the forestry monitoring area, independent evaluations of concession exploration plans, and annual evaluations of transactions affecting common forestry lands. In the justice area, the government will adopt a plan of action, before end–December 2001, for the implementation of the jurisdictional structures called for in the Constitution (including the Chambre de Comptes), and it will carry out a technical study of the justice system by August 2001. To enhance transparency in public sector management, the government will publish by modern means of communication, including a web site, the quarterly management reports on the priority ministries, as well as the results of the studies, service beneficiary assessments, audits and strategies indicated in the priority action plan. Additionally, the authorities will implement, before end-September 2001, the regulations of Decree 2000/287 (dated October 12, 2000) governing private sector activities and situations of potential conflict of interest for public servants. Finally, the government will strengthen enforcement of personal tax law, and in particular, it will ensure that all high level officials, including elected and appointed members of public administration and Parliament, declare their income to the Tax Department and meet their tax obligations on a timely basis, in accordance with the law.

IV.  Prior Actions

34.  The following measures have been agreed to constitute prior actions for the approval of the new arrangement under the PRGF:

  1. Issuance, to the successful bidder of the fixed telecommunications company (CAMTEL), of an invitation to negotiate; and
  2. Finalization of the priority spending plans to be financed by HIPC resources.

V.  Program Monitoring, Targets, And Reviews

35.  To monitor policy implementation under the program, a number of quantitative benchmarks are proposed for end-December 2000 and a number of quantitative performance criteria and benchmarks are proposed for end-March 2001, while indicative targets are proposed for end-June 2001 and end-September 2001. The proposed benchmarks will comprise the following: (i) a ceiling on the increase in net claims of the banking system on the central government; (ii) a floor on the primary balance; (iii) a floor on the non- accumulation of public sector external payment arrears; (iv) a ceiling on new medium- and long-term nonconcessional external loans contracted or guaranteed by the government; (v) a ceiling on new external loans with a maturity of less than one year; (vi) a floor on the total revenue of the central government; (vii) a floor on the non-oil revenue of the central government; and (viii) a floor on the reduction of domestic arrears. The limits established in items (i)–(v) will serve as performance criteria. In addition, the reform measures indicated in Table 2 will serve as performance criteria and structural benchmarks for the first six months of the annual program.

36.  In view of the uncertainties about external debt relief, privatization proceeds, oil prices, and exchange rate fluctuations, the program contains a built-in contingency mechanism for the adjust­ment of the quantitative benchmarks and performance criteria; the modalities of these mechanisms are outlined in the attached technical memorandum. The program for October 1, 2000-September 30, 2001 will provide for two reviews with the Fund staff on the basis of performance with respect to the quantitative and structural performance criteria and benchmarks for end-March 2001 and end-September 2001. The review will focus mainly on budgetary non-oil revenue performance and the customs reform, oil revenue, and progress in strengthening public expenditure management and governance, as well as on improvements in the nonbank financial sector.

37.  As in the past, program implementation will be examined in cabinet meetings chaired by the Prime Minister, the Head of Government. An Interministerial Supervisory Committee, chaired by the Minister of Economy and Finance and comprising the key economic and social sector ministers, will continue to coordinate program implementation with the assistance of the Technical Monitoring Committee for Economic Programs. The committee will, on a timely basis, provide Fund staff with all the data necessary to effectively monitor the program. To this end, the government will continue to improve data quality, coverage, and timeliness, and public dissemination of key economic indicators, in the context of the framework of the General Data Dissemination System (GDDS).

Table 1.  Cameroon:  Quantitative Performance Criteria and Benchmarks During the First -Year Program
Under the Poverty Reduction and Growth Facility, October 1, 2000-September 30, 2001

(In billions of CFA francs; cumulative from July 1, 2000, unless otherwise indicated)

  June 301
  Sep. 30
  Dec. 31
  Mar. 31
  June 303
  Sep. 303

Ceiling on the increase in net claims of the banking system on the central government 2 4 6 8   -75   49   -16   -147   -156   -142
Floor on the primary budget balance 2 7 8   417   74   220   338   478   572
Floor on the non-accumulation of external payments arrears of the central government 2 9   0   50   0   -50   0   0
Ceiling on new medium- and long-term nonconcessional external debt contracted or guaranteed by the central government 2 10   0   0   0   0   0   0
Ceiling on the net disbursement of external debt contracted or guaranteed by the central government with a maturity of less than one year 2 10 11   0   0   0   0   0   0
Floor on total revenue of the central government 5 12 13   1,093   285   636   965   1,316   1,612
    Of which: non-oil revenue12 13   768   196   406   622   860   1,075
Floor on reduction of domestic arrears   -98   -18   -80   -172   -213   -213
    Of which: cash payments     -18   -37   -64   -78   -78
Memorandum items:
  Assumed external debt relief   294   12   116   243   781   853
  External program financing 14   83   0   55   81   128   128
  Privatization proceeds   75   0   0   102   102   102
  Stock of net credit to the central government   371   419   355   224   215   229

Sources: Cameroonian authorities; Bank of Central African States (BEAC);  and staff estimates.
1 Cumulative since end-June 1999.

2 These targets will constitute performance criteria for end-March 2001.

3 Indicative targets; definitive targets as well as performance criteria for end-September, 2001 will be set at the time of the first review.

4 This target will be adjusted (a) upward for a shortfall in program financing, privatization proceeds, and external debt relief up to an amount equivalent to 50 percent of the shortfall (for a total cumulative shortfall of CFAF 35 billion); (b) downward by the full amount of any excess of the programmed levels in program financing, external debt relief, and privatization proceeds; and (c) downward by the full amount of any shortfall in the reduction of domestic arrears, on a net basis, in comparison with the program. See technical memorandum in Annex II.

5 This target will be adjusted for the full amount of higher/lower-than-programmed oil revenue. See technical memorandum in Annex II.

6 The flows have been constructed on the basis of estimated end-June 2000 data; they will be adjusted on the basis of the actual outturn.

7 Defined as government revenue (excluding privatization proceeds) minus noninterest expenditure (excluding foreign-financed investment and restructuring expenditure).

8 The targets will be adjusted upward/downward for 50 percent of the windfall/shortfall in oil revenue. For a windfall/shortfall beyond a threshold of CFAF 35 billion, the authorities will consult with Fund staff to formulate policies to adjust performance criteria. See technical memorandum in Annex II.

9 Excluding reschedulable external arrears. The targets will be adjusted for deviations from projected program financing. To be monitored on a continuous basis.

10 In millions of U.S. dollars. Nonconcessional debt (including leases) are defined as debt with a grant element of less than 35 percent, using discount rates based on the commercial interest reference rates (CIRRs). Exception will be made during 2000/01 for the contraction of a nonconcessional IBRD loan in an amount of US$ 65 million contracted by the government of Cameroon in the context of the Chad-Cameroon pipeline construction.

11 Excluding normal, import-related credit. To be monitored on a continuous basis.

12 These benchmarks will not constitute performance criteria.

13 Excluding privatization proceeeds.

14 Including IMF disbursements.

Table 2. Cameroon—Structural Performance Criteria and Benchmarks

Performance Criteria
•   Recruitment of independent observers, on the basis of an international bidding process, in order to render operational the interim system for public procurement.
End March 2001
•   Render operational the security system for the computer network at Customs (PAGODE) in order to restrict access to authorized personnel only.
End March 2001
•   Complete financial audit for SNH for the year 1999/2000 by an internationally reputed auditing firm.
End February 2001
•   Complete the second phase of the organizational and operational audit of SNH, adopt the recommendations and formulate a reform stragey.
End March 2001
•   Complete the physical and legal census of public servants, update the salary file and implement a computer interface to ensure that this file remains current.
End February 2001
•   Recruit independent auditors for the procurement system and for the physical audit of the use of HIPC resources, by an international bidding process.
End March 2001
•   Prepare exhaustive quarterly reports on the financial and physical execution of the budget for the social ministries, namely Education, Health, Public Works and Agriculture, within 45 days of the end of each quarter.
From December 2000
•   Adopt a rehabilitation plan for the state-owned Postal Savings Bank.
End March 2001

Section 1. Measures to Reinforce Customs Administration
Simplify control procedures with the objective of suppressing all physical checks (customs, police and others) beyond the gates of seaport and airport areas.
Ensure that 80 percent of customs operations at the single processing window (Société Générale de Surveillance and customs) are completed with a maximum delay of 48 hours for imports and 6 hours for exports.
December 2000
Generalize the use of the taxpayer identification number (TIN) at customs.
December 2000
Use a project management software package in the office of the Permanent Secretariat of the Customs Administration Reform Committee (CRAD) to assist in tracking responsibilities, and in managing and monitoring the implementation of the program, as well as in ensuring that implementation deadlines are met by the designated officials.
December 2000
Finalize and adopt an action plan to safeguard and restrict physical access to the current computer system.
December 2000
Create a special unit at customs headquarters to monitor and control exemptions.
January 2001
Safeguard and restrict physical access to current computer system.
March 2001
Adopt and effectively implement a code of conduct based on the  Arusha Declaration.
March 2001
Introduce a system based on risk analysis to select declarations for control purposes with a view to: (i) deliver the release notice for 80 percent of import declarations without further examination of cargo, and (ii) subject 20 percent of declarations to documentary and physical control.
April 2001
Use appropriate computer applications to track the origin of electronic transactions recorded by customs officials and customs brokers.
April 2001
Restructure the Customs division in Littoral into two sectors and put in place the collection office.
April 2001
Make available the human and physical resources, with an emphasis on training, recruitment of computer operators, and the implementation of a multiyear capital equipment program, necessary to effectively fight corruption.
April 2001
Complete the necessary preparations for the introduction of a new computer system with an emphasis on the adoption, adaptation and implementation of a software package.
June 2001
Put in place, with the assistance of Société Générale de Surveillance, an information system for the exchange of information between countries with a view to improving monitoring of transit operations.
June 2001
Adopt a new statute for customs agents and attribute it (including additional compensation) to agents individually subscribing to the code of conduct.
June 2001
Section 2. Measures to Improve Public Expenditure Management
Strengthen institutional arrangements for co-management in the health sector, in collaboration with the World Bank.
December 2000
Strengthen institutional arrangements for co-management in the education sector, in collaboration with the World Bank.
From December 2000
Launch the bidding process for the audit of the key ministries of Education, Health, Public Works and Agriculture and HIPC-financed expenditures.
December 2000
Effectively close the budgetary operations and finalize the Treasury balances (after reconciliation and taking into account all budgetary and accounting charges) for all operations relating to the 1999/2000 fiscal year.
December 2000
Revise the presentation of the budget execution tables (tableau de bord) basing it on exhaustive and accurate Treasury balances.
December 2000
Commit and delegate 45 percent of domestically financed investment credits.
December 2000
Launch audits of internal control institutions.
December 2000
Implement the interface for DEPMI/IBIS/PATRIOT/ORDRES and render operational the DEPMI and SISGEP (or equivalent) in Douala and Yaoundé.
December 2000
Complete the medium term sectoral strategies for health and education taking into account the results of the study on institutional arrangements and on costs and financing.
January 2001
Organize budget conferences with a view to moving towards a budget preparation process guided by sectoral objectives.
January 2001
Implement a dedicated mechanism for the monitoring of foreign-financed investments.
March 2001
Validate the budgetary classification system, both functional and administrative.
March 2001
Commit and delegate 80 percent of domestically financed investment credits.
March 2001
Complete the implementation of DEPMI and SISGEP (or equivalent) in each of the key provincial posts.
March 2001
Prepare the draft regulations on financial regulations.
June 2001
On the basis of the Country Financial Accountability Assessment (CFAA), improve the budget reform strategy, in collaboration with the World Bank, IMF, and other development partners.
June 2001
Prepare a procedural manual for public expenditure execution.
June 2001
Section 3. Measures for Improving the Public Procurement System
Finalize and adopt an action plan on the basis of the analytical report on the public procurement system prepared with the assistance of the World Bank.
December 2000
Disseminate the directives for the application of the current regulatory framework.
February 2001
Create the Regulatory Agency.
February 2001
Design and introduce a standard model of quotations for orders (“lettre de commande”).
February 2001
Include and disseminate, in the budget preparation circular, the obligation of project managers (“maîtres d’ouvrage”) to design, and maintain updated, the procurement plan for investment programs.
February 2001
Organize a workshop by the Public Works Procurement Department (“Direction Générale des Grands Travaux du Cameroun – DGTC”) on procurement programming.
February 2001
Organize the training program aimed at clarifying the use of evaluation criteria for tenders and qualification criteria for tenderers.
February 2001
Design and disseminate a letter by the Prime Minister to project managers demanding the nomination of alternates to the Presidents of Ministerial Commissions in the event of the President’s absence, in accordance with the provisions of Article 19 of Decree 95/102.
February 2001
Establish a tenderer’s guide dealing with the tax obligations arising from public tenders.
February 2001
Effectively implement the transitional system (independent observers and audits).
March 2001
Complete Decree 95/024 which establishes the modalities for settlement of duties and taxes on public tenders in order to define which duties and taxes are a liability of the government.
March 2001
Implement a filing and archive system at DGTC.
April 2001
Organize workshops for observers in order to ensure consistency among them
April 2001
Sector 4. Governance
Petroleum sector (SNH)
Complete the harmonization of the information system linking the petroleum companies and SNH.
Complete the harmonization of the accounting system in compliance with international accounting standards including strengthening the accounting department.

December 2000

March 2001
Forestry Sector
Implement the recommendations from the institutional review conducted under CAS III.
Publish the report of the independent observer at the commission awarding concessions.

March 2001
March 2001
Elaborate and adopt the Terms of Reference for the budget tracking exercises and beneficiary surveys in the education and health sectors.
Conduct a comprehensive review of the budgetary system and the institutional framework with technical assistance from the World Bank (CFAA – Country Financial Accountability Assessment).
Conduct systematic audits of the procurement system for 2000/01 in accordance with established thresholds.

December 2000

April 2001

From April 2001
Create and render operational a governance observatory in the Ministry of National Education (MINEDUC).
Disseminate, including via a website, the strategies and all the results and recommendations from surveys, studies and audits.
Evaluate effectiveness of the program to disseminate the results and recommendations of surveys, studies, audits and strategies.

December 2000

From January 2001

From June 2001
Render operational the anti-corruption coalition.
Extend and render operational 10 anticorruption units in government agencies.
Evaluate effectiveness of the MINEDUC Observatory on the basis of an independent study.

April 2001
August 2001
September 2001
Justice system
Adopt, in agreement with the IMF and the World Bank, the Terms of Reference (TORs) for the technical study of the justice system.
Conduct a technical study of the justice system on the basis of the defined TORs.
Adopt action plans for establishing jurisdictional bodies called for in the Constitution.

December 2000

August 2001
December 2001
Participation and transparency
Encourage participatory monitoring and joint evaluation of the strategy and the National Governance Plan (NGP) in association with civil society and NGOs.
Select pilot grassroots pilot projects on the basis of a participatory approach.
Conduct study of rules and procedures regarding information system for keeping citizens informed on public affairs.

March 2001

June 2001
August 2001


Cameroon: Technical memorandum of understanding on definitions and Modalities of the Built-In Contingency Mechanism for the Adjustment of Quantitative Performance Criteria and Benchmarks Under the First Annual Prgf Arrangement

I.  Introduction

1.  This memorandum sets out the understandings between the Cameroonian authorities and staff of the International Monetary Fund regarding the definitions of the quantitative performance criteria and benchmarks for the program supported by PRGF arrangement, the built-in contingency mechanism, as well as the related reporting requirements.


External debt

2.  The size and rate of growth of external indebtedness is an important factor in the design of a program for a country, especially one benefiting from HIPC assistance like Cameroon. External debt will be understood to mean a current, i.e. not a contingent, liability created under a contractual arrangement by the government of Cameroon, or guaranteed by the government of Cameroon, with a non resident party through the provision of value in the form of assets (including currency) or services, and which requires the obligor to make one or more payments in the form of assets (including currency) or services, at some future point(s) in time; these payments will discharge the principal and/or interest liabilities incurred under the contract. Debt can take a number of forms, the primary ones being:

    (i) loans: advances of money to the obligor by the lender on the basis of an undertaking that the obligor will repay the funds in the future (including deposits, bonds, debentures, commercial loans and buyers’ credits) and temporary exchanges of assets that are equivalent to fully collaterized loans under which the obligor is required to repay the funds, and usually pay interest, by repurchasing the collateral from the buyer in the future (such as repurchase agreements and official swap arrangements);

    (ii) suppliers’ credits: contracts where the supplier permits the obligor to defer payments until some time after the date on which the goods are delivered or services are provided; and

    (iii) leases: arrangements under which property is provided which the lessee has the right to use for one or more specified period(s) of time that are usually shorter than the total expected service life of the property, while the lessor retains the title to the property. For the purpose of this memorandum, the debt is the present value (at the inception of the lease) of all lease payments expected to be made during the period of the agreement excluding those payments that cover the operation, repair or maintenance of the property.

3.  Under this definition of debt, arrears, penalties, and judicially awarded damages arising from failure to make payment  under a contractual obligation that constitutes debt are debt. Failure to make payment on an obligation that is not considered debt under this definition (e.g., payment on delivery) will not give rise to debt.

Concessionality of external debt

4.  Debt is considered concessional if it has a grant element equivalent to 35 percent or more using the available currency-specific commercial interest reference rate (CIRR) and following the methodology set out in staff paper SM/96/86 and approved by the IMF Executive Board on April 15, 1996.

Cash relief from external debt rescheduling

5.  For the purpose of the program, the only debt relief which will be subject to the contingency mechanism described below is one that leads to an effective reduction in programmed debt service. This excludes debt relief given on debt which has been in drawn-out rescheduling/restructuring negotiations with non Paris Club creditors and for which no debt service has been paid in the past year, for example, debts to be considered under the debt and debt service reduction operation with commercial creditors, and for which no provision in debt service has been explicitly made in the fiscal program (except for up-front costs).

Domestic arrears

6.  Domestic arrears include non-structured domestic debt contracted by the government. Nonstructured debt is defined to be a liability for which there has been neither a formal agreement, nor a cash payment, nor securitization. Specifically, this debt includes salary arrears; commercial debt; rental/lease arrears; debt on account of indemnities and expropriations; fees and tax refunds or reimbursements, and debt on account of social adjustment programs arising from the restructuring of public enterprises. The government intends to settle 37 percent of these liabilities in the form of cash payment and to securitize the remainder.

Net claims of the banking system on the government

7.  Net claims of the banking system on the government comprise the stock of all outstanding claims on the government (loans, advances, and all other government debt instruments such as long term government securities) by the banking system less all deposits held by the government with the banking system.

Primary balance of the budget

8.  The primary budget balance is calculated as total government revenue (oil and non oil), excluding foreign grants and privatization proceeds (counted as financing), less noninterest expenditure, excluding foreign-financed investment and restructuring expenditure.

Privatization receipts

9.  For the purpose of this memorandum, privatization receipts will be understood to mean all monies received by the government through the sale or concessioning of a public company, organization or facility to a private company(ies) (including fully foreign government-owned ones), organization(s), or individual(s). To the extent possible, receipts should be presented on gross basis; if costs are incurred in the sale or concessioning, they should be recorded separately as expenditure.

III.  Modalities of the Built-In Contingency Mechanism for the Adjustment of Quantitative Performance Criteria and Benchmarks

10.  In view of uncertainties about program financing, privatization proceeds, and oil prices, the program contains built-in contingency mechanisms for the adjustment of the quantitative criteria and benchmarks relating to the ceilings on the increase in the net claims of the banking system on the central government (performance criterion).

Deviations from Programmed Oil Revenue

11.  The programmed oil revenue for the period October 2000 to September 2001 is based on an oil price assumption of US$30.3, US$28.3, US$26.5, and US$25.2 per barrel (for Cameroon) for the first through fourth quarter, and on an annual volume estimate of 39.5 million barrels. Based on these assumptions, the oil revenue contribution to the government’s budget is estimated at CFAF 141 billion, CFAF 113 billion, CFAF 113 billion, and CFAF 82 billion in the four quarters, respectively.

12.  In case of a lower-than-programmed oil revenue (owing to events outside the government=s control), the government will compensate 50 percent of the shortfall by expenditure savings and/or additional revenue from other sources. For the remaining 50 percent of the shortfall, the above-mentioned quantitative performance criteria and benchmarks will be adjusted upward. For a shortfall beyond a threshold of CFAF 35 billion per quarter, the authorities will consult Fund staff to formulate corrective policies to adjust performance criteria, subject to Fund approval.

13.  The entire amount of the oil revenues above those programmed will be placed in a treasury account at the Bank of Central African States (BEAC). A maximum of 50 percent of the windfall will be used to (a) increase high-priority infrastructure investment and social expenditures, and (b) reduce domestic arrears. The remainder of the windfall revenue will be sterilized by lowering the ceilings on the above-mentioned quantitative performance criteria and benchmarks.

Deviations from Programmed External Assistance, Privatization, Proceeds, and Reductions in Domestic and External Arrears

14.  The above-mentioned quantitative performance criteria and benchmarks will be adjusted (a) upward for a shortfall in exceptional external financing (i.e., program financing and external debt relief) up to an amount equivalent to 50 percent of the shortfall (for a total cumulative shortfall of CFAF 35 billion); (b) downward for the full amount of any excess in external assistance (i.e., program financing and external debt relief); (c) upward/downward by half the amount of the shortfall/excess in privatization receipts; and (d) downward by the full amount of any shortfall in the reductions of domestic and external payments arrears in comparison to the program.

Program exchange rate

15.  Amounts denominated in SDRs, will be converted to US dollars at the fixed exchange rate of US$1.324 per SDR, and converted into CFA francs in accordance with the exchange rates agreed with the authorities. IMF liabilities, which are included in the definition of net claims on the government by the banking system, will be valued at this exchange rate. Any deviations in the exchange rate will lead to a full adjustment in the valuation of the stock of IMF liabilities at the central bank, and a similar adjustment in the ceiling on net claims of banking system on the government.

Reporting Requirements

16.  The Cameroonian authorities will send to the Fund the following data within the time limits set out in Table 1. Except as otherwise indicated, data transmission will take the form previously agreed between the authorities and the Fund. The authorities will supply the Fund with any additional information that the Fund requests in connection with monitoring performance under the program on a timely basis.

Table 1. Cameroon: Data Reporting Requirements
Category of data Table/Report Frequency Deadline
Financial and monetary data Central bank balance sheet, consolidated commercial bank balance sheet, monetary survey Monthly 25th of the month for the previous month
Interest rates Irregular One week after new changes announced
HIPC BEAC Account Transactions Monthly 25th of the month for the previous month
Fiscal data Tableau de bord, including details on revenues, expenditures, financing and domestic debt payments (including settlement of arrears)

Monthly 25th of the month for the previous month
Treasury balances Monthly 25th of the month for the previous month
Treasury Flash reports Monthly 10th of the month for the previous month
Domestic Debt Settlement Plan Execution Report Monthly 25th of the month for the previous month
Investment Budget Execution Report Quarterly One month after end of quarter
Expenditure reports by selected ministries Quarterly One month after end of quarter
SNH operations including export volumes, exchange rates, prices and values, transferable balance and summary accounts Monthly 25th of the month for the previous month
HIPC spending plans and budget execution Quarterly One month after end of quarter
Real sector data Consumer price index, Yaounde

National consumer price index

10th of month for previous month’s data

10th of month for previous quarter’s data
Index of industrial production Quarterly One month after end of quarter
National accounts Annual Summary estimates: six months after the end of year
Balance of payments data Imports by use and exports by major product, trade balance  Monthly 25th of the month for the previous month’s data
 Price and volume indices of imports and of exports Quarterly One month after end of quarter
 Consolidated estimates of the balance of payments Annual Summary estimates: six months after the end of year
External debt Debt service due before and after debt relief Quarterly basis At beginning of fiscal year; updates as needed
 Cash debt service paid Monthly 25th of the month for the previous month’s data
 Debt service reconciliation table (“Access table”) Quarterly 25th of the month for the previous quarter’s data
 Stock of outstanding debt and arrears Quarterly 25th of the month for the previous quarter’s data
 Drawings on new loans Quarterly 25th of the month for the previous quarter’s data
External grants Disbursements Monthly 25th of the month for the previous month’s data


Cameroon: Composition of the Committee to Monitor HIPC Resources and the Priority Spending to be Financed by HIPC Resources

1.  The authorities, in order to reinforce the mechanism for the monitoring and evaluation of the enhanced HIPC resources, have put in place a broad-based monitoring committee. The consultative and monitoring committee has been created by decree, and its members are drawn from the government, civil society and donor community. The committee is chaired by the Minister of the Economy and Finance, while the vice-chairman is drawn from civil society (that is, not from the government). In all, the committee has 19 members as follows:

  • 2 ministers, in charge of Economy and Finance (Chair), and Public Investment
  • 5 other ministers in charge of the following areas: education, health, public work, urban administration, and agriculture
  • 5 representatives from the donor or international community, specifically: 3 bilateral creditors and 2 multilateral creditors, including the resident coordinator of the UN system in Cameroon
  • 3 representatives from the religious community
  • 1 representative from the private sector (with representation rotating amongst the key private sector organizations)
  • 1 representative of the microfinance sector (with representation rotating amongst the key macrofinance sector institutions)
  • 2 representatives from NGOs or associations

2.  Representatives of the Fund, the World Bank, and the African Development Bank will attend the committee’s meetings as observers.

3.  The main functions of the committee include: (i) a review of dossiers of eligible expenditures aimed at poverty alleviation and good governance to be presented by various sectoral ministries, international donors and other civil society organizations; (ii) ex-post analysis of operations financed by HIPC resources, including by means of audits; (iii) preparation of recommendations aimed at improving budgetary management and efficiency of expenditures in the fight against poverty and the promotion of good governance; and (iv) dissemination, to the public at large, of information relative to the execution of these expenditures.

4.  The attached table details the priority spending to be financed by HIPC resources for the period 2000/01 to 2002/03.

Table 1.  Cameroon: Fiscal Impact of the HIPC Initiative
(In billions of CFA francs)

  2000/01 2001/02 2002/03

Total HIPC assistance 36.6 86.6 89.9
  Multilateral grants 20.2 31.4 36.0
  IMF 2.1 0.3 1.6
  World Bank group 14.9 18.7 20.8
  AfDB group 3.3 12.5 11.3
  Others 0.0 0.0 2.3
  HIPC bilateral debt relief 16.4 55.2 53.9
  Interest 42.4 51.3 50.1
  Principal -26.0 3.9 3.9
Debt service before debt relief 535.9 471.3 478.9
  Interest 219.8 181.1 166.6
  Principal 316.0 290.2 312.3
Net payments 1/ 519.5 416.1 425.0
  Interest 177.5 129.8 116.5
  Principal 342.0 286.3 308.5
Total HIPC spending 36.6 86.6 89.9
Current expenditure 15.7 28.6 29.0
  Education 3.7 10.5 11.3
  Health 6.6 9.4 9.4
  Social affairs 0.8 0.5 0.5
  Rural development 2.1 4.5 4.5
  Governance 2.5 3.7 3.3
Capital expenditure 20.9 58.0 60.9
  Education 3.8 11.4 11.3
  Health 0.1 0.0 0.0
  Social affairs 0.8 1.5 1.3
  Rural development 0.6 1.1 0.9
  Infrastructure 15.1 43.1 46.2
  Governance 0.4 1.0 1.2

1/ Excluding multilateral grants.