Cameroon reaches staff-level agreement with the IMF for FCFA45bn disbursement

The International Monetary Fund announced in a May 19 statement it has reached a staff-level agreement with Cameroonian authorities following the fourth review of the 2021-24 Extended Credit Facility and the Extended Fund Facility agreements signed with the country.

If this agreement is validated, Cameroon will receive $73.8 million (about FCFA44.9 billion) from the IMF to carry out development projects.

The new disbursement will bring the IMF active portfolio, as part of these arrangements, to $624.9 million, or about FCFA380.4 billion. The fourth review mission led by Cemile Sancak between May 4 and 17 expressed overall satisfaction with the country’s progress and resilience despite “tight global financial conditions and increased oil price volatility.”

“The overall fiscal deficit declined to 1.1 percent of GDP in 2022 from 3 percent in 2021 while the non-oil primary deficit increased to 4 percent of GDP in 2022 from 3.9 percent in 2021. Non-oil revenue performance improved substantially in 2022, due to both tax and non-tax revenues,” the IMF statement read.

Cameroon still, however, struggles to meet certain quantitative performance criteria, such as the limits set on the net accumulation of external arrears, which have shown “temporary and minor breaches”. The Fund reported that the Cameroonian authorities are preparing a revised budget for 2023 to integrate, for example, the adjusted pump fuel prices and reduce fuel subsidies. This, according to the IMF, will allow the overall fiscal deficit to be reduced “further” to 1% of GDP and the non-oil primary fiscal deficit to 2.4% of GDP in 2023.

“Medium-term prospects remain favorable provided reforms continue, and the external environment is supportive. Economic growth is expected to increase modestly to 4 percent while inflation is expected to moderate from 7.3 percent year-on-year at end-2022 to 5.9 percent at end-2023,” the Fund said.

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