The IMF announced on June 3 that it reached an agreement with Cameroon. This deal is part of the first review for the Facility for Resilience and Sustainability (FRS) and the sixth review for the Extended Credit Facility (ECF) and the Extended Fund Facility (EFF) programs. Pending approval by the IMF Board of Directors later in June 2024, the agreement will result in $118.6 million being sent to Cameroon’s treasury, equal to CFA71.5 billion. Out of this amount, CFA44 billion will go towards supporting Cameroon’s budget under the ECF and EFF.
Despite the IMF’s overall satisfaction with the program’s implementation in Cameroon, it raised concerns about the “integrity and execution of the budget” for 2023. The IMF noted that “headline fiscal developments were broadly in line with program objectives. The non-oil primary deficit improved to 2.6% of GDP in 2023 (from 3.9% in 2022). The consolidation effort was supported by a strong non-oil revenue and the government’s efforts to reduce costly fuel subsidies. However, effective public financial management remains a persistent challenge, with substantial extra-budgetary expenditure in 2023. This translated in overruns on current spending, and the non-oil primary deficit target under the program was missed by a small margin”.
This means that during 2023, the Cameroonian government executed expenditures that were not initially planned in its finance act, leading to a surpassing of the initial budget allocation for state current expenditures. According to the IMF, this situation “also constrained resources for priority, pro-growth investment,” which slightly declined to 3.3% compared to 3.6% in 2022.
In response, the IMF advised the Cameroonian government to intensify efforts to improve budget integrity and execution in 2024. Accordingly, Cameroonian authorities are currently preparing a supplementary finance act for 2024, which will, among other measures, limit certain expenditures executed through cash advances. Essentially, the government is gearing up, likely during the June session of the National Assembly, to amend the state budget for the seventh consecutive year.
Since 2018, the government has adjusted the state budget during the fiscal year to adapt to recent economic developments driven by both national and international factors.
The adjusted finance act for 2024 was particularly anticipated because in February 2024, the government made decisions impacting the state budget that were not included in the finance act passed by Parliament in November 2023. These decisions include raising the prices of certain petroleum products from February 3, 2024, aiming to reduce the subsidy allocated for pump fuel.