Press Release: Statement at the Conclusion of the IMF Mission to Cameroon
March 15, 2007Press Release No. 07/51
The following statement was issued on March 15, 2007 by Mr. Dhaneshwar Ghura, International Monetary Fund (IMF) mission chief to Cameroon:
"An IMF mission team visited Yaoundé and Douala during March 1-15, 2007 to hold discussions on the 2007 Article IV consultation and third review under the Poverty Reduction and Growth Facility (PRGF) arrangement with the IMF. The mission met with Prime Minister Ephraim Inoni; State Minister at the Presidency Laurent Esso; Finance Minister Polycarpe Abah Abah; and senior government and central bank officials. Meetings were also held with representatives of civil society, labor unions, donors, the business and banking communities, and the media.
"Discussions focused on how to accelerate pro-poor growth. There was broad agreement that achieving this objective would require focus in two key areas. First, preserving fiscal sustainability while raising priority spending; this would necessitate raising nonoil revenues and pursuing sound debt management. Second, creating an environment conducive to private sector development. The business environment would be enhanced by improvements in infrastructure, as well as policies aimed at fighting corruption, strengthening the tax system, bolstering the judiciary, liberalizing trade, and deepening financial intermediation.
"Regarding recent economic developments and prospects, growth picked up somewhat in 2006 to reach 3.9 percent, following a rebound in construction activities, oil output, and forestry production. Higher oil prices and production have improved the external current account in 2006. Inflation rose to 5 percent in 2006 due to increased fuel prices. Economic prospects for 2007 are encouraging, with real economic growth projected at 4.1 percent accompanied by a deceleration of inflation.
"The overall fiscal position improved as revenues increased owing to higher world oil prices, and the government took steps to mobilize nonoil revenues and control spending. Nonetheless, lower-than-budgeted capital spending raised concerns on progress in reaching the growth and poverty reduction objectives. In this context, the authorities noted that resources freed up through debt relief under the enhanced Heavily Indebted Poor Country Initiative and Multilateral Debt Relief Initiative will continue to be used in line with Cameroon's Poverty Reduction Strategy Paper priorities.
"Progress was made in implementing the PRGF-supported program in the second half of 2006. Most fiscal and financial targets were met. Nonetheless, the mission stressed that the resurgence of extra budgetary spending in 2006 is a source of concern and presents a step back on recent improvement on the transparency of budgetary procedures. Measures related to nonoil revenue mobilization and strengthening of expenditure monitoring were implemented. The government continued publishing data on budget execution and the oil sector. The publication of the first Extractive Industry Transparency Initiative report covering 2001-04 constituted a key step in enhancing transparency. Public enterprise reform is proceeding with assistance from the World Bank and International Finance Corporation. The mission urged the authorities to complete the privatization of key public enterprises in the airline, telecommunications, and water sectors, and to accelerate the implementation of the anticorruption measures."