Cameroon’s National Sinking Fund CAA reported the availability of around FCFA3,980.1 billion of unused foreign loans in the national coffers as of the end of September 2024. This volume is 5.2% higher than last year’s contracted but undisbursed debt (SENDs).
According to the CAA, SENDs represent financial resources that Cameroon has borrowed from international financial partners, including other governments and multilateral institutions, but has not yet drawn on. “This creates several financial and strategic challenges for managing public funds,” CAA noted.
The debt agency cited several reasons behind the growing SENDs, including extended project timelines, strict conditions imposed by lenders, and economic factors like pandemics or energy crises that disrupt disbursement schedules. Experts also pointed to issues such as insufficient project planning before signing loan agreements and delays in government providing counterpart funds for certain projects.
To address the buildup of SENDs, Cameroon implemented a new disbursement process for foreign loans in late 2019. However, as of November 2024, this measure has not significantly reduced the amount of unused loans. SENDs at the end of September 2024 exceeded the levels recorded in May 2017, when the figure stood at FCFA3,929.9 billion.
Despite these challenges, the CAA highlighted some benefits of SENDs. “SENDs are both a challenge and an opportunity to reassess funded projects, with the option to renegotiate loan terms if needed. Managing these funds plays a key role in budget planning and financial management,” the agency said. Rather than being solely a financial burden, SENDs can be necessary for large-scale projects, as there is often a gap between when funds are committed and when they are released.
However, despite this balanced view, Cameroon’s President Paul Biya has pushed for more efficient handling of these idle funds. Since his 2023 budget preparation directive, he has urged government to reduce the volume of unused loans. President Biya has also called for the cancellation of loan agreements for projects that face indefinite delays in their start or execution.
https://www.businessincameroon.com/