IMF Completes Reviews of Cameroon Credit and Fund Facilities

• The IMF Executive Board completed the First Review under the Resilience and Sustainability Facility (RSF) arrangement and the Sixth Reviews under the Extended Credit Facility (ECF) and the Extended Fund Facility (EFF) arrangements. Completion of the reviews allows for an immediate disbursement of US$ 72.7 million under the ECF-EFF, and US$ 45.4 million under the RSF.
• Cameroon's recovery continued despite a difficult domestic and external environment. Overall economic growth in 2023 is estimated at 3.3 percent and is expected to pick up to 3.9 percent in 2024. Inflation moderated to 5.9 percent at end-2023. A continued decline to 5.5 percent is expected by end-2024.
• The authorities continue to make progress on Cameroon's economic reform agenda. Going forward, the authorities should accelerate the reform agenda in public financial management, foster structural transformation, and advance climate change adaptation and mitigation efforts.

Washington, DC: The Executive Board of the International Monetary Fund (IMF) completed today the sixth reviews under Cameroon's Extended Credit Facility (ECF) and the Extended Fund Facility (EFF) arrangements. The completion of the ECF-EFF reviews allows for an immediate disbursement of SDR 55.2 million (about US$ 72.7 million), bringing total disbursements under the arrangements to SDR 483 million (US$ 644.6 million). The Executive Board also completed the first review under the Resilience and Sustainability Facility (RSF) arrangement. Completion of this review makes available SDR 34.5 million (US$ 45.4 million).

The Executive Board approved waivers of nonobservance of two performance criteria on the floor on the non-oil primary fiscal balance at end-December 2023 and the continuous zero ceiling on the accumulation of new external payment arrears on the ground that the nonobservance was minor and temporary. In addition, the Executive Board approved a waiver of applicability for four end-June 2024 performance criteria, for which data are not yet available and there is no evidence that they were not observed.

Cameroon's three-year ECF-EFF arrangements were originally approved by the IMF Executive Board for a total amount of SDR 483 million (US$ 689.5 million, or 175 percent of quota) in July 2021. An extension of these arrangements of 12 months was approved in December 2023 to allow more time to implement the policies and reforms, and access was augmented by SDR 110.4 million (US$ 145.4 million, or 40 percent of quota). The 18-month RSF was approved by the Executive Board in January 2024 in the amount of SDR 138 million (US$ 181.7 million, or 50 percent of quota).

Cameroon's ECF-EFF-supported program continues to provide a strong anchor for the authorities' economic program, notably efforts to achieve post-COVID-19 recovery, restore the country's fiscal and external sustainability and unlock inclusive and private sector-driven growth. The RSF supports Cameroon's efforts to adapt to and mitigate the impact of climate change, reinforce the growing engagement of development partners and other stakeholders in climate-resilient development and catalyze additional climate financing.

Preliminary data indicate that Cameroon's post-COVID-19 recovery continued last year, with overall economic growth estimated at 3.3 percent, slightly below expectations due to external and domestic factors, including supply chain and energy disruptions and a contraction of oil production. Growth is expected to pick up to 3.9 percent in 2024 and remain above 4 percent in the medium term as domestic demand strengthens and the external environment stabilizes. Inflation moderated to 5.9 percent at end-2023. A continued decline to 5.5 percent is expected by end-2024.

At the conclusion of the Executive Board's discussion, Mr. Kenji Okamura, Deputy Managing Director and Acting Chair, made the following statement:

"Cameroon's economic growth continues despite the challenging domestic and external environment. Moreover, while the balance of risks remains tilted to the downside, the country's medium-term outlook is favorable. Although performance under the Fund-supported program has been mixed, the ECF-EFF arrangements are supporting the authorities' efforts to maintain macroeconomic stability and implement priority reforms to promote inclusive growth. Moreover, the authorities are committed to implementing corrective measures to improve program performance and accelerate reforms.

"To preserve macroeconomic stability, it is important to maintain a fiscal path in line with program objectives. This implies strengthening domestic non-oil revenue mobilization and public financial management. Limiting spending done through exceptional procedures is essential to achieve budget discipline and integrity.

"Cameroon's financial soundness indicators have generally improved, but vulnerabilities remain. The commitment by the authorities to advance bank recapitalization in compliance with the COBAC regulations and Basel capital adequacy framework is welcome.

"To improve the business environment and support private sector-led inclusive growth, it is critical to implement governance reforms, address corruption vulnerabilities, and strengthen the AML/CFT regime.

"The authorities have made commendable progress under the RSF, which is helping Cameroon integrate climate considerations into its institutional and regulatory frameworks and enhance its capacity to adapt and mitigate the effects of climate change. It is essential to maintain the reform momentum to further strengthen the institutional framework for climate policies, build resilience to climate shocks, and catalyze new investments from donors and the private sector."