IMF Executive Board Completes First Review of ECF Arrangement for Cameroon
The Executive Board of the International Monetary Fund (IMF) today completed the first review of the arrangement under the Extended Credit Facility (ECF) Arrangement for Cameroon.
The completion of the review enables the disbursement of SDR 82.8 million (about $117.2 million), bringing total disbursements under the arrangement to SDR 207 million (about $292.9 million).
In completing the first review, 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 on the basis of corrective measures taken by the authorities.
Cameroon’s three-year arrangement for SDR 483 million (about $about $683.5 million, or 175 percent of Cameroon’s quota), was approved on June 26, 2017 (see Press Release No.17/248). It aims at supporting the country’s efforts to restore external and fiscal sustainability and lay the foundations for sustainable, inclusive and private sector-led growth.
Following the Executive Board discussion, Mr. Mitsuhiro Furusawa, Deputy Managing Director and Acting Chair, made the following statement:
“Fiscal and external adjustment in Cameroon and other CEMAC countries, combined with external financing, have led to a gradual buildup in CEMAC reserves. However, the region’s recovery remains fragile, and Cameroon’s continued leadership of the regional effort will be essential to sustainability.
“Cameroon’s performance under the ECF-supported arrangement has been broadly satisfactory. The authorities remain fully committed to fiscal consolidation and the 2018 budget is in line with program objectives. However, meeting the deficit targets may be challenging in the context of weaker-than-envisaged revenue, and spending pressures in 2018 and 2019.
“To meet program objectives, stepped-up efforts to expand the non-oil revenue base and better prioritizing spending will be essential while preserving social spending. To maintain 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 are needed to improve spending efficiency and control fiscal risks.
“The interim 2018–20 growth and employment strategy aims at boosting private sector investment, job creation, and further economic diversification. Reforms aimed at enhancing the delivery of basic social services and protecting the poor, improving the business environment, and maintaining financial stability while expanding access to financial services, should be prioritized.
“Cameroon’s program is supported by the implementation of supportive policies and reforms by the regional institutions, including tighter monetary policy, elimination of statutory advances, sound bank regulation and supervision, and firm controls over the extension of credit to banks.”