The executive board of the International Monetary Fund (IMF) on Thursday approved three-year arrangements under the Extended Credit Facility (ECF) and the Extended Fund Facility (EFF) for Cameroon for about $ 689.5 million to support the country’s economic and financial reform program.
Cameroon’s ECF/EFF-supported program aims to support the governmnent efforts to achieve a rapid post-COVID-19 recovery, restore the country’s fiscal and external sustainability and unlock inclusive and private sector-driven growth, said the IMF.
The Fund added that urgently addressing financial and fiscal risks associated with SOEs remains a high priority and efforts to strengthen public debt management and limit non-concessional borrowing remain critical.
It said steadfast commitment to strengthen transparency and good governance and reduce corruption risks will be crucial.
The approval of the ECF/EFF enables immediate disbursement of about US$ 177.2 million, usable for budget support.
This follows Fund emergency support to Cameroon under the Rapid Credit Facility (RCF) totaling about $ 382 million.
Cameroon currently faces significant development challenges heightened by the pandemic. An upsurge in COVID-19 cases since January 2021, has raised concerns about growth prospects and the external and fiscal positions. Additionally, security risks in parts of the country persist. The pandemic could reverse improvements in poverty reduction and development outcomes and jeopardize the implementation of reforms.
While economic activity decelerated markedly in 2020, the slowdown was less than anticipated, reflecting strong performance in the agricultural and construction sectors. The current account deficit narrowed to 3.7 percent of GDP, owing to both lower imports and higher than expected non-oil exports. Inflation remained below 3.0 percent. In addition, the authorities’ proactive management of the COVID-19 pandemic helped contain the fiscal deficit to 3.6 percent of GDP.