After a staff-level agreement was reached in May, the IMFs executive board has now concluded the fourth review of Cameroons current extended credit facility (ECF) and extended fund facility (EFF) arrangements
This will allow the Central African nation to draw US$73.6mn in disbursements from the fund. While this disbursement is relatively small, it comes with the guidance and ongoing support of the IMF, which will be a net benefit to the country.
Following the review process, the IMF concluded that its medium-term outlook for the Cameroonian economy remains positive, assuming that reforms resume and the external environment becomes more supportive of the country's main economic activities. The fund anticipates the agro-industry, forestry, and services sectors, as well as liquified natural gas (LNG) production, to be key drivers of economic activity in the coming years. Moreover, increased LNG production is expected to partially offset the gradual decline in the country's oil production.
In terms of policy reform, discussions between the IMF and Cameroonian authorities centred around macro-critical measures to manage economic shocks, while boosting growth and resilience. Considerations on this front pertained to (i) continued fiscal consolidation, without compromising growth, (ii) steadily phasing out fuel subsidies and negating the adverse impact on the most vulnerable citizens, (iii) enhancing non-oil revenue mobilisation, (iv) corrective action to resolve historical budget management issues that weigh on fiscal performance, (v) improving the quality of spending and increasing expenditure efficiency, (vi) reinforcing governance, transparency, and anti-corruption efforts, and (vii) realising Cameroon's growth potential while increasing resilience through financial sector reforms and climate action.
Uncertainties regarding policy reform and financial management in Cameroon persist. That said, the IMF believes that risks are mitigated by the country's track record with implementing macroeconomic programmes, its close engagement with donors, and its comprehensive capacity development (CD) programme. Authorities also promised to resume several long-delayed large infrastructure projects. In this light, the fund's continued involvement in the country is key to ensuring that local officials follow through on commitments made during programme negotiations with the IMF.
