BusinessBusiness, Finances

Cameroon considers three-year IMF program to drive growth

As part of its strategy to put the country on a path to sustained economic recovery and and more inclusive…

As part of its strategy to put the country on a path to sustained economic recovery and and more inclusive growth, Cameroon government authorities are currently considering an IMF three-year economic and financial program

The government authorities, specifically the Secretary General at the Presidency, Ferdinand Ngoh Ngoh, Secretary General at the Prime Minister’s Office Seraphin Fouda, Minister of Finance Alamine Ousmane Mey, Minister of Economy, Planning, and Regional Development Louis Paul Motaze, had met with an IMF team from February 20–March 6, 2017

The International Monetary Fund (IMF) team, led by Corinne Deléchat, had met with the government authorities to discuss an economic program that will take the country through 2019.

According to Delechat, the IMF team had followed the December 23 summit in Yaoundé, where CEMAC heads of state agreed that a resolute and concerted effort to preserve macroeconomic stability in the region was necessary, and resolved to initiate discussions with the IMF and other development partners as part of a path toward the resolution of the region’s economic challenges.

Citing some shocks which have negatively affected Cameroon, like the sharp decline in commodity prices, along with security threats in the Lake Chad basin and recent civil unrest in neighboring Central African Republic, Delechat said the Cameroonian economy has weathered these shocks, with economic growth remaining relatively robust. In light of the difficult context, which is deeply affecting all CEMAC countries, Delechat said decisive fiscal and debt management policies are needed to preserve macroeconomic stability.

The IMF team noted that the 2017 Finance Law already represents an important step in this direction, and encouraged the authorities to continue to expand the non-oil tax base and enhance spending efficiency, in particular by prioritizing investment spending with the highest growth dividends. IMF equally emphasized the need to protect and even increase social spending in favor of the most vulnerable groups, and welcomed the authorities’ plans to scale up their successful social safety nets program. Given the rapid increase in public debt, a particular focus should be given to reducing the pace of new borrowing, particularly on non-concessional terms.

“The team and the government authorities also made good progress in discussing measures to strengthen economic outcomes, enhance the business environment to boost private sector investment and economic diversification, and achieve a more inclusive growth. Discussions are said to continue in the coming days to reach a common understanding on the full set of policies that could form the basis for an economic program supported by the IMF.