July 25, 2024

IMF approves release of $226 million loan money to Cameroon to respond to COVID-19

Cameroon's President Paul Biya has ordered the disbursement of $82
Cameroon's President Paul Biya has ordered the disbursement of $82

The International Monetary Fund (IMF) has approved the release of $226 million loan money to Cameroon to respond to COVID-19, the respiratory disease caused by the novel coronavirus.

The IMF also approved Cameroon’s request for an extension of the Extended Credit Facility (ECF) loan due to expire on June 25, 2020, to September 30, 2020, with a rephasing of access.

An extended credit facility (ECF) allows the borrowing country to take out money over an extended period of time rather than reapplying for a loan each time it needs money.

Mr. Mitsuhiro Furusawa, IMF Deputy Managing Director and Acting Chair, said Cameroon is facing serious challenges from the twin COVID-19 pandemic and terms of trade shocks.

“Weak global demand, depressed commodity prices, and domestic containment measures weigh on the outlook, and are causing significant adverse economic and social effects. The shocks have given rise to substantial fiscal pressures and an urgent balance of payments need,” he said, according to an IMF statement on Monday.

Furusawa added that the IMF emergency financing under the Rapid Credit Facility (RCF) will support the government’s efforts to mitigate the impact of the twin shocks.

“Additional assistance from development partners will be critical to fill the remaining financing need. Strict budgetary controls and transparency will be needed to ensure that the assistance under the RCF meets its intended objectives.”

“Given the sudden and pressing nature of the shocks, accommodative fiscal and monetary policies are warranted to mitigate the human and economic impact of the outbreak. However, the authorities remain committed to their reform agenda under the ECF arrangement. They plan to undertake adjustments to return to the fiscal consolidation path once the crisis abates to safeguard debt sustainability and ensure a strong recovery,” he said.

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