Cameroon has postponed its $333.2 million international bond issuance until 2024, as revealed by Fitch Ratings in its latest creditworthiness analysis. This decision aligns with a proactive debt management strategy, responding to negative assessments by rating agencies and the commitments made by the International Monetary Fund (IMF).
Fitch Ratings’ recent analysis on Cameroon’s solvency suggests that the Central African country has deferred its plan to issue $333.2 million (FCFA200 billion) in international bonds (Eurobonds) to 2024. The information indicates a cautious approach in managing both international and domestic debt.
While no official comments have been made by government officials or those involved in the bond structuring, reports of this delay emerge following Moody’s rating agency expressing concerns. Moody’s shifted Cameroon’s issuer rating from speculative but stable (B2) to just five points away from default (Caa1). While Fitch Ratings did not downgrade the country’s rating, it adjusted its outlook.
Amid a global landscape where the monetary policies of countries, especially those in sub-Saharan Africa, face challenges due to external shocks, Cameroon faced criticism in 2022 for delayed payments of 18 days on various loans. The government struggled to explain that these delays were linked to technical challenges in consolidating the CEMAC’s foreign exchange reserves by its Central Bank.
However, since the beginning of 2023, Cameroon has met its international commitments, reporting no payment delays. Macroeconomic indicators on external debt show positive trends. Fitch Ratings anticipates a moderate budget deficit of 1.3% of GDP in 2023 and 1.4% in 2024, with gross fiscal financing needs averaging 4.8% of GDP between 2024 and 2025, and the Eurobond amortization constituting only 0.1% of GDP per year.
On a positive note, the International Monetary Fund (IMF) holds a more optimistic view. The institution anticipates a decrease in the overall deficit from 1.1% in 2022 to 0.7% in 2023, with the public debt stock expected to drop from 45% of GDP at the end of 2022 to under 42% by the end of 2023. The IMF has disbursed $72.7 million under an ongoing program with Cameroon and could release an additional $145.4 million by July 2025, subject to normal developments.
With the prospect of mobilizing up to $218 million in international resources, Cameroonian authorities might be taking the time to reassess their strategy. Like many African countries, Cameroon faces challenges in public finance governance related to various domestic factors, but the international environment is the most penalizing. Any lapse is severely penalized, while efforts are not adequately rewarded.
Despite COVID-19, the need to finance sustainable development goals, inflation imported from the U.S. monetary management, the war in Ukraine, and speculation on global trade, Africa is expected to continue adhering to economic governance orthodoxy—a feat achieved by only a few nations. A meeting held in June 2023 with French President Emmanuel Macron aimed to bring about change, yet progress is slow, and the issue of a more equitable international financial architecture seems to be fading into obscurity.