Extended Credit Facility : Cameroon Makes Strides

#Economie www.cameroon-tribune.cm

The IMF Executive Board could consider the fifth review in mid-December 2019, whose completion would enable a sixth disbursement of circa FCFA 45.5 Billion.

Cameroon is said to be performing positively as it implements the International Monetary Fund (IMF)’s Extended Credit Facility (ECF) arrangement. The evaluation was made following an IMF staff mission to Yaounde, October 28-November 8, 2019, led by Amadou Sy, Chief of IMF Mission. During the working visit, the IMF team discussed the fifth review of the programme with several Cameroonian officials.

At the end of the visit, Friday November 8, 2019, Amadou Sy told reporters that Cameroon has met all performance and quantitative criteria set by both parties, though some delays have been registered in the structural reforms sector.

According to the IMF team, growth in 2019 is estimated at 3.9 per cent, from 4.1 per cent in 2018, and slightly lower than envisaged as the rebound of the oil and gas sector compensated for the subdued performance of the non-oil sector. The authorities are adjusting the 2019 fiscal projections to consider lower than projected non-oil fiscal revenue, while keeping the overall deficit anchored at 2.3 per cent of GDP.

Amadou Sy said:

“While the oil and gas sector is expected to grow by 6.0 per cent after three years of deceleration, security challenges and the suspension of SONARA’s production since June 2019 is weighing on short-term growth prospects. Non-oil activity is estimated to soften at 3.8 per cent in 2019 from 4.4 per cent in 2018. Inflation remains low but is trending up from 1.1 per cent in 2018 to 2.3 per cent in September 2019, mainly owing to higher food prices and with strong regional variations.” 

Following the review, officials are considering expanding the non-oil revenue base, including by reducing tax exemptions, raising VAT efficiency, and improving tax and customs administration. They are committed to addressing risks from contingent liabilities, including from SONARA and other state-owned enterprises, and safeguarding debt sustainability including by continuing to increase the share of concessional loans in new borrowing.

The IMF team reached an agreement with Cameroon authorities that could support approval of the fifth review. The IMF Executive Board could consider this review in mid-December 2019, whose completion would enable a sixth disbursement of SDR 55.2 million (about FCFA 45.5 Billion).