Cameroon considers two-year IMF aid program to drive growth

Reuters News
Posted: Mar 08, 2017 7:57 AM

By Sylvain Andzongo

YAOUNDE (Reuters) - Cameroon and the International Monetary Fund are considering a two-year aid program for the Central African country to deliver sustained and inclusive economic growth.

Leaders of the Central African bloc (CEMAC) agreed in December to engage with the IMF to find ways to overcome macroeconomic instability caused in part by lower global commodity prices, the IMF said in a statement.

Cameroon, which produces oil, cocoa and coffee and is the largest economy in the region, has weathered the problems better than others and its medium term outlook is positive due to a relatively diversified economy and infrastructure projects.

"The sharp decline in commodity prices, along with security threats in the Lake Chad basin and, until recently, civil unrest in the neighboring Central African Republic, have negatively impacted Cameroon's external and fiscal balances," the IMF said after a two-week mission led by Corinne Delechat.

"While the Cameroonian economy has weathered these shocks thus far, with economic growth remaining relatively robust, public debt has risen rapidly and external and fiscal buffers have declined significantly," it said, adding that talks would continue in the coming days.

The IMF held talks in February on starting an aid program with Gabon, another oil-exporting country in CEMAC.

Cameroon's dollar bond maturing in 2025 jumped 1.7 cents on Wednesday after the statements and the $750 million bond traded at a record high price of 114 cents, according to Tradeweb data.

The IMF statement did not mention national politics but said the government needed to protect and even increase social spending in favor of the most vulnerable groups.

Since October, people in the two western English-speaking regions of Cameroon have joined protests against what they say is their materialization by the French-speaking majority under President Paul Biya, in power since 1982.

At least six protesters have been shot dead and hundreds arrested, prompting criticism from human rights groups and concern from the African Union.

Meanwhile, militant group Boko Haram has staged numerous attacks in Cameroon's Far North region as part of its insurgency to create an Islamist state in northeastern Nigeria.

Cameroon's economy minister Louis Paul Motaze said the 2017-2019 program under discussion would focus on stabilizing national finances and boosting infrastructure projects.

Gross domestic product was $28.4 billion in 2015 and its per capita gross national income stood at $1,320, according to World Bank data.

(Writing by Matthew Mpoke Bigg; Editing by Angus MacSwan)