Cameroon plans to raise $761.4 million (CFA467 billion) from international capital markets, according to a decree signed by President Paul Biya. The funds are needed to meet IMF requirements and boost regional foreign exchange reserves.

The decree, which modifies the 2024 Finance Law, states that the money will be sourced from “external banking markets.” This move was not initially part of the 2024 state budget. The funds will be used to clear domestic debt arrears from 2000 to 2019. These arrears include unpaid salaries (CFA303 billion), tax refunds (CFA216 billion), and various commercial debts (CFA122 billion).

The government had adopted a repayment plan over three to seven years, but the IMF pressured for quicker action. Resolving this issue is crucial for Cameroon to receive an additional CFA240 billion in budget support from various donors.

Local capital markets could not provide the necessary liquidity due to high demand from other CEMAC states. Thus, Cameroon will reduce its issuance of Treasury bonds in the regional market by CFA95 billion.

By turning to global capital markets, Cameroon aims to satisfy IMF requirements, secure a three-to-seven-year repayment window, and strengthen foreign exchange reserves with an additional CFA707 billion ($1.15 billion).

The operation may involve a syndication or private deal. For example, Senegal recently raised $500 million at a 7.75% interest rate under similar conditions. Cameroon will need to choose a financial institution to arrange the deal, with options like JP Morgan or Citi.

Once finalized, Cameroon will join other African countries like Benin, Côte d’Ivoire, Kenya, Senegal, and Zambia, which have raised funds in 2024. Investor reactions are uncertain, especially since rating agencies downgraded Cameroon due to technical delays, not actual defaults. Moody’s, for instance, assigned a stable outlook but such ratings often affect international borrowing costs.

Source: Business in Cameroon

Many vendors at the Great Soppo Market, popularly known as “OIC Market”, have been displaced from their business locations by Buea municipality authorities.

An ongoing road construction project is underway at the Bakweri town stretch in Great Soppo, which has led to the closure of the main road which leads to the area.

Currently, vehicles now use the Great Soppo market as a transit road to Bakweri town.

To make the road more accessible and free of any hindrance, some vendors have been displaced and moved to the Bwitingi market, popularly known as the Buea Central Market, which many consider to be unsafe due to frequent attacks by Ambazonia fighters in the area.

One of the sellers expressed her concerns, pointing out that it would be difficult to build a new client base because some of the buyers would have a hard time locating them.

Another trader said that she would experience a massive decline in sales because the Bwitingi market only opens twice per week.

The Great Soppo Market (OIC Market), which is operational throughout the week irrespective of any imposed lockdowns by the separatists groups, is the most visited market in Buea since the start of the ongoing crisis.

While many people are angry that they are being moved to a new location, many do agree that the city needs to develop, adding that Buea is in dire need of such infrastructure projects.

“Our city needs good roads and this road will go a long way in reducing the growing traffic in Buea. We are growing as a city and we need modern infrastructure to make our lives easier,” one of the traders said.

“Our city officials are trying to make our lives better and we all know that our current market location is simply not the best as it creates lots of traffic and this hurts us all. We must accept our pain in the interest of our city and I am sure the road will be a blessing to all Buea residents and tourists,” he added.

By Cecilia M. Manjang

The Economic and Monetary Community of Central Africa (CEMAC) experienced an economic slowdown in 2023, with growth falling to 1.7% from 3.1% in 2022, according to the semi-annual CEMAC Economic Barometer published by the World Bank on Monday, June 17, 2024. Growth is expected to rebound to 2.5% in 2024.

The report revealed that CEMAC’s economic performance lagged behind the West African Economic and Monetary Union (WAEMU) and Sub-Saharan Africa, which recorded growth rates of 3.4% and 2.9%, respectively.

The slowdown in CEMAC was mainly due to a recession in Equatorial Guinea, where growth plummeted to -5.8% in 2023. This decline was caused by reduced hydrocarbon production and domestic demand. Additionally, Gabon’s growth decreased from 3% in 2022 to 2.3% in 2023.

Conversely, Cameroon posted the fastest growth in the region, averaging 3.4% between 2021 and 2023, thanks to a diversified economy and less reliance on hydrocarbons.

Chad demonstrated resilience despite the ongoing conflict in neighboring Sudan. Its GDP growth rate reached 4.1% in 2023, driven by increased oil production and public investments.

The Central African Republic and Congo faced significant fiscal pressures, with high deficits and debt-to-GDP ratios.

The World Bank also highlighted a rise in public debt in the region, reaching 52.8% of GDP in 2023. Public spending increased to 20.1% of GDP from 18.3% in 2022, reducing the budget surplus to 1.1% of GDP.

Inflation decreased in 2023 due to strict monetary policies by the Bank of Central African States (BEAC), but it remained above the regional target. “To support the exchange rate arrangement and contain inflationary pressures, the BEAC policy rate was maintained at five percent since March 2023 following a cumulative increase by 175 basis points from November 2021 to March 2023,” the report stated.

The World Bank pointed out several development challenges facing CEMAC, including high and stagnant poverty rates, a lack of job opportunities, and rapid population growth. To address these issues, the Bretton Woods institution recommended that member countries strengthen economic governance, improve public sector efficiency, create a favorable environment for the private sector, and enhance human capital through policies aimed at fostering a healthy and skilled workforce.

In the medium term, the World Bank forecasts moderate economic growth for CEMAC, reaching 2.5% in 2024, with a slight increase projected for 2025-2026.

Source: Business in Cameroon

Cameroon’s inflation rate averaged 6.3% between April 2023 and April 2024, according to a report on household consumer prices from the National Institute of Statistics (INS). This rate remains more than double the 3% tolerance threshold within the CEMAC.

However, there was a decrease of over 1% from the 7.4% recorded in 2023. The INS noted that the 2023 rate was the third highest in 29 years, following 32.5% and 9% in 1994 and 1995, respectively, after the CFA franc devaluation.

The INS identified key inflation drivers as an 8.7% increase in food prices and a 15.7% rise in transport costs. “The rise in food prices is mainly due to higher prices of bread and cereals, vegetables, and fish and seafood. The increase in transport costs is primarily due to higher road passenger transport costs, driven by fuel price adjustments at the pump starting February 3, 2024,” the report stated.

Monetary policy had a limited impact on inflation. The rate averaged above 6% from April 2023 to April 2024, despite the Central African States Bank (Beac) intensifying its austerity measures since late 2021. Beac’s measures included suspending liquidity injections into banks, intensifying liquidity withdrawals, issuing Beac bonds to remove liquidity from banking systems, and gradually raising key interest rates.

Beac aims to dry up banks to tighten access to financing for states, individuals, and other economic operators. Central bank analysts believe restricting credit access reduces the proportion of monetary-origin inflation in CEMAC countries. However, Beac officials admitted that only 20% of the current inflation is of monetary origin.

Source: Business in Cameroon

The Bank of Central African States (BEAC) has resumed liquidity injections into banks in the Economic and Monetary Community of Central Africa (Cemac), marking the first such operation since February 2023. The BEAC injected CFA 120 billion, per a statement released on June 11.

As a reminder, the bank has decided to suspend injections as part of its tightening of monetary policy aimed at combating galloping inflation in the Cemac zone. However, before this suspension, the central bank of the Cemac countries had progressively reduced the volume of its weekly liquidity injection operations in banks, from CFA250 billion to just CFA50 billion.

BEAC officials explained that the reduction and suspension of liquidity injections were intended to dry up banks’ cash reserves, restricting access to financing for governments, individuals, and businesses. The central bank hoped this would address the estimated 20% of inflation attributed to monetary factors.

The BEAC did not clarify whether this liquidity injection is a one-time operation or a response to the banks’ increasing need for funds after more than a year of tightened credit conditions. Since late 2021, Cemac banks have faced severe restrictions on accessing central bank refinancing tools, including higher key interest rates and the halt of liquidity injections.

On the contrary, banks have endured significant withdrawals from their reserves through intensified liquidity absorption operations and the recent issuance of BEAC bonds, further draining their liquidity. Despite these measures, inflation remains high in Cemac countries. In Cameroon, for instance, inflation rose by an average of 6.3% from April 2023 to April 2024, according to the National Institute of Statistics. This rate is more than double the 3% threshold tolerated in the Cemac region.

Source: Business in Cameroon

An International Monetary Fund (IMF) team, led by Ms. Cemile Sancak, Mission Chief for Cameroon, visited Yaoundé during April 25-May 8 and held virtual meetings during May 9-31 to discuss progress on reforms and the authorities’ policy priorities in the context of the sixth reviews of the four-year program supported by the Extended Credit Facility (ECF) and the Extended Fund Facility (EFF) arrangements, and the first review of the Resilience and Sustainability Facility (RSF). The ECF/EFF arrangements were approved by the IMF Executive Board for a total amount of SDR 483 million (US$ 689.5 million) in July 2021 (see press release 21/237). An extension of these arrangements of 12 months was approved in December 2023 to allow more time to implement the policies and reforms, and access was augmented by SDR 110.4 million (US$ 147.6 million, see press release 23/469). The 18-month RSF was approved by the Executive Board in January 2024 in the amount of SDR 138 million (US$ 183.4 million, see press release 24/30).

At the conclusion of the discussions, Ms. Sancak issued the following statement:

“The IMF and the Cameroonian authorities have reached staff-level agreement on the sixth reviews of the ECF/EFF arrangements, and the first review of the RSF arrangement. The agreement is subject to approval by the IMF Executive Board, with Board consideration expected in late June. Completion of the reviews would enable disbursement under the ECF/EFF arrangements of SDR 55.2 million (US$ 73.0 million), and disbursement under the RSF arrangement of SDR 34.5 million (US$ 45.6 million).

“Preliminary data indicate that Cameroon’s post-COVID-19 recovery continued last year, with overall growth of 3.3 percent. This is lower than the 3.6 percent realized in 2022 and the previous growth forecast of 4 percent in 2023 due to a combination of external and internal factors, including supply chain and energy disruptions and a contraction in domestic oil production. Inflation subsided from 7.3 percent at the end 2022 to 5.9 percent at end 2023.

“Headline fiscal developments were broadly in line with program objectives. The non-oil primary deficit improved to 2.6 percent of GDP in 2023 (from 3.9 percent in 2022). The consolidation effort was supported by a strong non-oil revenue and the government’s efforts to reduce costly fuel subsidies. However, effective public financial management remains a persistent challenge, with substantial extra-budgetary expenditure in 2023. This translated in overruns on current spending, and the non-oil primary deficit target under the program was missed by a small margin. The current spending overrun also constrained resources for priority, pro-growth investment, underlining the need to redouble efforts to strengthen budget integrity and execution. The authorities intend to introduce a revised 2024 budget to limit expenditures executed through treasury advances and adopt a plan to clear domestic arrears, among others. There was a minor breach of the ceiling on the accumulation of new external payment arrears. 

“Prospects remain favorable provided continued reform and a supportive external environment. Economic growth is now expected to increase to around 4 percent in 2024. The decline in inflation will be gradual given the impact of the second pump price increase early in 2024, and it will reach 5.5 percent by year end. The authorities are preparing a revised budget for 2024 and have expressed their continued commitment to maintaining macroeconomic stability and to further reducing the non-oil primary fiscal deficit to 2 percent of GDP in 2024.

“The authorities are making good progress on their structural reform agenda. Meeting the ambitious objectives of the national development strategy for 2020-30 (SND30) will require stepping up these efforts, especially those that would create fiscal space for infrastructure investment while maintaining debt sustainability. Reforms to support a deep structural transformation of the economy also need to be accelerated, including to improve the business climate for the private sector. The mission encouraged the authorities’ efforts to strengthen the performance and financial management of public enterprises, complete technical studies related to the restructuring of SONARA, and strengthen the anti-corruption framework.

“The authorities recognize the need to strengthen Cameroon’s resilience to climate change. Under the RSF, the government has intensified its efforts to improve the climate policy framework. Work is well advanced on the initial reform measures that entail adoption of an order establishing the institutional framework for the coordination of the climate agenda, and publication of a project selection procedure manual that integrates criteria relating to climate change. Work is ongoing on a series of important reform measures, including a national climate plan, a national strategy for disaster risk financing, climate-related public investment management, and in the governance and sustainability of the forestry sector.

“The IMF team met with the Prime Minister, Joseph Dion Ngute, the Minister and Secretary General of the Presidency, Ferdinand Ngoh Ngoh, the Minister of Finance, Louis Paul Motaze, the National Director of the BEAC, Emmanuel Nkoa Ayissi, and other senior officials. The mission also met with representatives of development partners, the diplomatic community, the private sector, and civil society. The team wishes to thank the Cameroonian authorities for their excellent cooperation.”

Reported by the IMF Communications Department

Customs officers at Douala International Airport, in Cameroon’s bustling economic hub, seized a consignment of 24 kg of cocaine from Sao Paulo, Brazil, on May 30, 2024. The announcement came from the communications department of the General Directorate of Customs under the Ministry of Finance. The intercepted shipment is reported to be worth $2 million or over one billion CFA francs, as per the same source

The drugs were concealed in eight packages weighing a total of 166 kg. Upon inspection of these packages, “customs officers found shoes and handbags with wooden handles, inside which 24.5 kg of cocaine were carefully concealed,” it was reported. The suspect, approximately 60 years old, along with the evidence, was handed over to the Public Prosecutor near the Douala-Bonanjo High Court.

This is one of the largest drug seizures in recent years at Douala International Airport. It is also the second significant cocaine seizure at this airport since the beginning of 2024. Indeed, 15 kg of cocaine had already been seized at the same airport on February 27, 2024, on a Turkish Airlines flight. Valued at approximately CFA600 million, the shipment was concealed in boxes and bottles of cosmetic products.

Since 2016, there has been a notable rise in drug seizures and the interception of other illicit goods at Douala and Yaoundé-Nsimalen airports, which are the primary airports in Cameroon. This increase is attributed to the establishment of anti-trafficking airport units (CAAT) in select airports across the country.

According to the regulations establishing them, CAATs are responsible for “collecting and sharing information in real-time between connected airports, as part of the fight against illicit trafficking; conducting more efficient checks on people, baggage, cargo, and postal items in transit, upon arrival and departure, in the fight against illicit trafficking; and conducting risk analysis.”

Source: Business in Cameroon

Africa’s economy has shown resilience overall despite global conditions but growth needs to be in double digits to truly tackle poverty on the continent, the African Development Bank (AfDB) said on Thursday.

The pan-African economic institution also emphasised the need to create more jobs and further industrialise, during a presentation on Africa’s economic outlook at the bank’s annual meetings in Nairobi.

“African economies are operating like everybody else within a very, very challenging global context,” AfDB president Akinwumi Adesina said.

He noted high inflation and the war in Ukraine as well as the difficulties — and costs — faced by African nations seeking to raise money on global capital markets.

“Despite all of these headwinds… African economies have done pretty well,” Adesina said.

The bank is forecasting overall African economic growth at 4.3 percent next year from an estimated 3.7 percent in 2024 and 3.1 percent last year.

And it says 10 out of the 20 fastest growing economies in the world are in Africa.

But Adesina warned: “We need to be very clear as well, that just having real GDP growth at that level is not enough to be able to get our hundreds of millions of people out of poverty.

“We believe that African economies ought to be growing at double digits for probably the next decade or so to be able to have the kind of transformation that we need as a continent.”

In 2023, more than 460 million of the 1.2 million people in sub-Saharan Africa were considered extremely poor by the World Bank.

The AfDB estimates that between 10 and 20 million young Africans join the job market each year, while only three million new jobs are available.

“We have to make sure that our growth is also delivering value for the youth and for the women,” Adesina said.

“We don’t eat GDP. Doesn’t matter how (good) that GDP is. We have to make sure that it’s creating jobs, quality jobs.”

Source: AFP

Cameroon’s imports of mechanical and electrical machines and equipment reached CFA656 billion in 2023, up CFA136 billion (26%) from the CFA520 billion spent in 2022. The figures were reported by the National Institute of Statistics (INS).

The INS report on Cameroon’s foreign trade highlights that imports of these goods accounted for 13.2% of total import expenditures in 2023. This rise underscores Cameroon’s commitment to bolstering its technological and industrial capacities.

Let’s however note that the report does not specify the reasons behind the surge in equipment imports or the countries of origin for these machines and devices.

Source: Business in Cameroon

In 2023, only 12.7% of Cameroon’s export earnings (CFA2,988.6 billion) came from African trading partners. According to figures released by the National Stats Agency (INS), this share of export earnings is equivalent to what Cameroon captured solely from its exports to France, its second-largest customer in 2023, behind the Netherlands.

As far as imports are concerned, trade between Cameroon and African countries presents an even bleaker picture. “Imports from African countries (in 2023) fell by 2.2 percentage points on the previous year, representing 9.5% of total import expenditure (CFA4,993 billion). Within this sub-group, Côte d’Ivoire leads with a share of 1.5%, followed by Morocco and South Africa. This low proportion of trade between African countries highlights the opportunity offered by the African Continental Free Trade Area (AfCFTA) to strengthen and promote intra-African economic ties”, said the INS. However, INS data revealed a lack of adoption by many African states of this preferential trade regime, which came into force on January 1, 2021, opening the doors to a vast market of around 1.3 billion consumers on the continent.

In October 2022, Cameroon cautiously ventured to boost intra-African trade by making its first exports under the AfCFTA. On October 19, 2022, Cameroonian customs issued AfCFTA certificates to agri-food companies Cameroon Tea Estate and Ndawara Tea Estate for the export of 38.6 kg of Cameroonian tea to Ghana. These companies, headed by billionaire Baba Danpullo, have followed the example of Gic Afatex.

Since October 6, 2022, this SME has become the first Cameroonian company to export goods (dried safou and pineapple, ginger) to Ghana under the AfCFTA preferential tariff. The first import under this preferential regime took place on July 2, 2023, involving a cargo of resin imported from Tunisia by Inoda Industries Sarl, which specializes in the production of paint and coating materials.

Source: Business in Cameroon