Abstract
The staff report examines Cameroon’s Sixth Review Under the Three-Year Arrangement Under the Poverty Reduction and Growth Facility and Request for Waiver of Performance Criterion. The authorities stressed their interest in a successor IMF program to support Cameroon’s medium-term economic objectives. Sound oil revenue management helped contain money growth, and inflation remained generally low. The government significantly lowered its indebtedness to the banking system, which helped to contain money growth despite a large increase in international reserves.
I. Relations with the Fund
(As of November 30, 2008)
I. Membership Status: Joined 07/10/1963; Article VIII
II. General Resources Account:
| SDR million | %Quota | |
| Quota | 185.70 | 100.00 |
| Fund holdings of currency | 184.89 | 99.57 |
| Reserve position in Fund | 0.82 | 0.44 |
| SDR million | %Quota | |
| Quota | 185.70 | 100.00 |
| Fund holdings of currency | 184.89 | 99.57 |
| Reserve position in Fund | 0.82 | 0.44 |
III. SDR Department:
| SDR million | %Allocation | |
| Net cumulative allocation | 24.46 | 100.00 |
| Holdings | 3.00 | 12.26 |
| SDR million | %Allocation | |
| Net cumulative allocation | 24.46 | 100.00 |
| Holdings | 3.00 | 12.26 |
IV. Outstanding Purchases and Loans:
| SDR million | %Quota | |
| PRGF arrangements | 15.90 | 8.56 |
| SDR million | %Quota | |
| PRGF arrangements | 15.90 | 8.56 |
V. Latest Financial Arrangements:
| Type | Date of Arrangement | Expiration date | Amount approved (SDR million) | Amount drawn (SDR million) |
| PRGF | 10/24/2005 | 01/31/2009 | 18.57 | 15.90 |
| PRGF | 12/21/2000 | 12/20/2004 | 111.42 | 79.59 |
| PRGF | 08/20/1997 | 12/20/2000 | 162.12 | 162.12 |
| Type | Date of Arrangement | Expiration date | Amount approved (SDR million) | Amount drawn (SDR million) |
| PRGF | 10/24/2005 | 01/31/2009 | 18.57 | 15.90 |
| PRGF | 12/21/2000 | 12/20/2004 | 111.42 | 79.59 |
| PRGF | 08/20/1997 | 12/20/2000 | 162.12 | 162.12 |
VI. Projected Payments to Fund (SDR million; based on existing use of resources and present holdings of SDRs)
| Forthcoming | |||||
| 2008 | 2009 | 2010 | 2011 | 2012 | |
| Principal | 0.80 | 1.59 | |||
| Charges/interest | 0.04 | 0.31 | 0.30 | 0.30 | 0.30 |
| Total | 0.04 | 0.31 | 0.30 | 1.10 | 1.89 |
| Forthcoming | |||||
| 2008 | 2009 | 2010 | 2011 | 2012 | |
| Principal | 0.80 | 1.59 | |||
| Charges/interest | 0.04 | 0.31 | 0.30 | 0.30 | 0.30 |
| Total | 0.04 | 0.31 | 0.30 | 1.10 | 1.89 |
VII. Implementation of HIPC Initiative:
| Enhanced framework | |
| I. Commitment of HIPC assistance | |
| Decision point date | Oct. 2000 |
| Assistance committed1 | |
| By all creditors (US$ million) | 1,267.00 |
| Of which: Fund assistance (US$ million) | 37.04 |
| (SDR equivalent in millions) | 28.62 |
| Completion point date | Apr. 2006 |
| II. Delivery of Fund assistance (SDR million) | |
| Amount disbursed | 28.62 |
| Interim assistance | 11.25 |
| Completion point | 17.37 |
| Additional disbursement of interest income2 | 5.05 |
| Total disbursements | 33.67 |
| Enhanced framework | |
| I. Commitment of HIPC assistance | |
| Decision point date | Oct. 2000 |
| Assistance committed1 | |
| By all creditors (US$ million) | 1,267.00 |
| Of which: Fund assistance (US$ million) | 37.04 |
| (SDR equivalent in millions) | 28.62 |
| Completion point date | Apr. 2006 |
| II. Delivery of Fund assistance (SDR million) | |
| Amount disbursed | 28.62 |
| Interim assistance | 11.25 |
| Completion point | 17.37 |
| Additional disbursement of interest income2 | 5.05 |
| Total disbursements | 33.67 |
VIII. Implementation of MDRI Assistance:
The MDRI provides 100 percent debt relief to eligible member countries that qualified for the assistance. Grant assistance from the MDRI Trust and HIPC resources provide debt relief to cover the full stock of debt owed to the Fund as of end-2004 that remains outstanding at the time the member qualifies for such debt relief.
| I. | MDRI-eligible debt (SDR million)1 | 173.26 | ||
| Financed by: MDRI Trust | 149.17 | |||
| Remaining HIPC Resources | 24.09 | |||
| II. Debt Relief by Facility (SDR million) | ||||
| Delivery Date April 2006 |
Eligible Debt | |||
| GRA N/A |
PRGF 173.26 |
Total 173.26 |
||
The MDRI provides 100 percent debt relief to eligible member countries that qualified for the assistance. Grant assistance from the MDRI Trust and HIPC resources provide debt relief to cover the full stock of debt owed to the Fund as of end-2004 that remains outstanding at the time the member qualifies for such debt relief.
| I. | MDRI-eligible debt (SDR million)1 | 173.26 | ||
| Financed by: MDRI Trust | 149.17 | |||
| Remaining HIPC Resources | 24.09 | |||
| II. Debt Relief by Facility (SDR million) | ||||
| Delivery Date April 2006 |
Eligible Debt | |||
| GRA N/A |
PRGF 173.26 |
Total 173.26 |
||
The MDRI provides 100 percent debt relief to eligible member countries that qualified for the assistance. Grant assistance from the MDRI Trust and HIPC resources provide debt relief to cover the full stock of debt owed to the Fund as of end-2004 that remains outstanding at the time the member qualifies for such debt relief.
IX. Safeguards Assessments:
The Bank of the Central African States (BEAC) is the regional central bank of the Central African States. The most recent safeguards assessment of the BEAC was completed on August 30, 2004. The assessment found that the Bank has implemented a number of measures to strengthen its safeguards framework since the 2001 safeguards assessment, and recommended further enhancements in the areas of external and internal audits, and financial reporting. Latest monitoring results indicate the existence of certain vulnerabilities including in the system of internal controls. These and other aspects of the BEAC safeguards framework will be reviewed in the context of the 2008 update safeguards assessment of BEAC that is underway.
X. Exchange Arrangements:
Cameroon participates in a currency union with five other members of the CEMAC and has no separate legal tender. Cameroon’s currency, the CFA franc, is pegged to the euro at the fixed rate of CFAF 655.957 per euro. Local currency equivalent: CFAF 748.35 = SDR 1, as of December 11, 2008. Effective January 1, 2007, the exchange arrangement of the CEMAC countries has been reclassified to the category of conventional pegged arrangement from the category of exchange arrangement with no separate legal tender. The new classification is based on the behavior of the common currency, whereas the previous classification was based on the lack of a separate legal tender. The new classification thus reflects only a definitional change, and is not based on a judgment that there has been a substantive change in the exchange regime or other policies of the currency union or its members.
Cameroon maintains an exchange system free of restrictions on the making of payments and transfers for current international transactions, except for restrictions maintained for security reasons that have been notified to the Fund pursuant to Executive Board decision 144-152/51.
XI. Article IV Consultation:
The last Article IV consultation with Cameroon was concluded by the Executive Board on June 18, 2007.
XII. FSAP Participation and ROSCs:
The Financial System Stability Assessment (FSSA) report of May 24, 2000 is based on the findings of the joint IMF-World Bank mission that visited Cameroon during February 29-March 14, 2000. The findings of the Financial Sector Assessment Program (FSAP) mission were presented to the authorities on March 13-14, 2000 in the context of the 2000 Article IV consultation. An updated assessment was carried out by a joint IMF-World Bank FSAP mission in June 2007.
The Report on the Observance of Standards and Codes (ROSC) on fiscal transparency and transparency of monetary and financial policies was issued on June 16, 2000.
The data module of the ROSC was issued on August 24, 2001 (CR/01/150).
XIII. Technical Assistance:
Since September 2005: presence of an FAD resident expert for fiscal administration (shared with other countries in the region).
June 2008: MCM mission (jointly with World Bank) on debt management strategy.
May 2008: FAD mission on the implementation of the new organic budget law
April 2008: FAD mission on tax administration.
October 2006: FAD mission on poverty and social impact assessment of the current petroleum price mechanism.
October 2006: FAD mission (jointly with World Bank) to assess preparation of the new organic budget law, and review expenditure classification system.
March 2006: STA mission on balance of payments statistics compilation.
July 2005: FAD mission on tax policy.
May 2005: FAD mission on tax and customs administration.
December 2004: STA mission on the compilation of national accounts and follow-up by FAD expert on public expenditure management.
October 2003: STA mission on the compilation of national accounts.
September 2003: FAD mission on non-oil revenue mobilization and follow-up by FAD expert on public expenditure management.
June 2003: FAD mission on public expenditure management.
March 2003: FAD mission on public expenditure management.
November 2002: FAD mission on public expenditure management.
May 2002: FAD mission on public expenditure management.
April 2002: FAD mission follow-up on the personal income tax system.
March 2002: FAD mission on the implementation of the action plan for government revenue and expenditure.
October–November 2001: FAD mission on tax and customs administration.
September 2001: FAD missions on the audit of the treasury and poverty tracking.
June 2000: FAD mission on the modernization of customs.
April 2000: STA mission on General Data Dissemination System (GDDS/ROSC).
November 1999: FAD mission on modernization of the tax department.
June–July 1999: FAD technical assistance mission on customs.
May–June 1999: FAD follow-up mission on value-added tax (VAT) and tax administration.
January–March 1999: Placement of an FAD advisor for the introduction of the VAT.
November 1998: Placement of an FAD resident advisor on public expenditure management.
October–November 1998: STA mission on metadata project.
September 1998: Placement of FAD advisor for the VAT.
July 1998: FAD mission on preparation of a VAT.
February 1998: FAD technical assistance mission on review of public expenditure management.
November 1997: FAD technical assistance mission on preparation for the introduction of the VAT.
January–February 1997: AFR/PDR mission, in collaboration with experts from the World Bank and the French government, on external debt statistics.
May 1996: AFR mission, in collaboration with a team from the French Treasury and the Banque de France, on the system of fiscal reporting and monitoring.
February 1996: FAD mission on direct taxation and agricultural sector taxation.
May–June 1995: STA mission on balance of payments statistics.
XIV. Resident Representatives:
The post of IMF Resident Representative has been maintained in Yaoundé continuously since 1989. The current Resident Representative, Ms. Kabedi-Mbuyi, has been in her post since July 2005.
II. Bank-Fund Joint Managerial Action Plan, 2008-09
| Products | Mission timing | Expected delivery |
|---|---|---|
| A. Mutual information on relevant work programs | ||
| The Fund work program | ||
| Strategy: Fund’s policy advice and technical assistance will focus on helping Cameroon preserve fiscal sustainability and economic stability, while expanding priority spending to accelerate growth and poverty reduction. | ||
| TA on implementation of the organic budget law | Two missions: August and December 2008 | Aide-memoire at the end of the mission |
| TA on tax administration | Two missions: August and December 2008 | Aide-memoire at the end of the mission |
| TA in customs administration | Mission in February 2009 | Aide-memoire at the end of the mission |
| TA in strengthening treasury management | Mission in November 2008 | Aide-memoire at the end of the mission |
| Sixth PRGF Review | September 2008 | Board discussion in December 2008 |
| 2009 Article IV consultation | March 2009 | Board discussion in June 2009 |
| The World Bank program | ||
| Strategy: The new Country Assistance Strategy will aim at improving governance and accelerating growth and productive employment. To complement fiscal consolidation and improved public financial management, the Bank will support the government in removing bottlenecks to growth and development, including improving business climate, increasing energy supply, and addressing constraints to agriculture development. | ||
| Support to PRSP preparation | Field-based support | Activity completion report by March 2009 |
| Governance and anticorruption | September 2008 | Strategic Governance Note |
| Country Assistance Strategy | September 2008 | Board presentation by June 2009 |
| Fiscal policies for growth and development (jointly with the AfDB) | Two missions: July and December 2008 | Report in March 2009 |
| Private sector development (lending, TA) | Two missions: dates to be decided | Aide-memoire and Board presentation by June 2009 |
| Agriculture sector development (lending, TA) | Two missions: dates to be decided | Aide-memoire and Board presentation by June 2009 |
| Electricity sector development (Partial Risk Guarantee, TA) | Two missions: dates to be decided | Aide-memoire and Board presentation by June 2009 |
| Transparency and accountability capacity building: TA and policy dialogue | Two missions: dates to be decided | Aide-memoire |
| Supervision and policy dialogue: education, health, environment, forest reforms, community development programs, transport, financial sector, water supply and urban development, infrastructure. | Two missions for each sector/theme | Aide-memoire |
| B. Requests for work program inputs | ||
| Fund request to Bank | ||
| Periodic update on progress | ||
| Bank request to Fund | ||
| Periodic macro update | ||
| C. Agreement on joint products and missions | ||
| DSA update | March 2009 | Board discussion in June 2009 |
| JSAN | March 2009 | Board discussion in June 2009 |
| Products | Mission timing | Expected delivery |
|---|---|---|
| A. Mutual information on relevant work programs | ||
| The Fund work program | ||
| Strategy: Fund’s policy advice and technical assistance will focus on helping Cameroon preserve fiscal sustainability and economic stability, while expanding priority spending to accelerate growth and poverty reduction. | ||
| TA on implementation of the organic budget law | Two missions: August and December 2008 | Aide-memoire at the end of the mission |
| TA on tax administration | Two missions: August and December 2008 | Aide-memoire at the end of the mission |
| TA in customs administration | Mission in February 2009 | Aide-memoire at the end of the mission |
| TA in strengthening treasury management | Mission in November 2008 | Aide-memoire at the end of the mission |
| Sixth PRGF Review | September 2008 | Board discussion in December 2008 |
| 2009 Article IV consultation | March 2009 | Board discussion in June 2009 |
| The World Bank program | ||
| Strategy: The new Country Assistance Strategy will aim at improving governance and accelerating growth and productive employment. To complement fiscal consolidation and improved public financial management, the Bank will support the government in removing bottlenecks to growth and development, including improving business climate, increasing energy supply, and addressing constraints to agriculture development. | ||
| Support to PRSP preparation | Field-based support | Activity completion report by March 2009 |
| Governance and anticorruption | September 2008 | Strategic Governance Note |
| Country Assistance Strategy | September 2008 | Board presentation by June 2009 |
| Fiscal policies for growth and development (jointly with the AfDB) | Two missions: July and December 2008 | Report in March 2009 |
| Private sector development (lending, TA) | Two missions: dates to be decided | Aide-memoire and Board presentation by June 2009 |
| Agriculture sector development (lending, TA) | Two missions: dates to be decided | Aide-memoire and Board presentation by June 2009 |
| Electricity sector development (Partial Risk Guarantee, TA) | Two missions: dates to be decided | Aide-memoire and Board presentation by June 2009 |
| Transparency and accountability capacity building: TA and policy dialogue | Two missions: dates to be decided | Aide-memoire |
| Supervision and policy dialogue: education, health, environment, forest reforms, community development programs, transport, financial sector, water supply and urban development, infrastructure. | Two missions for each sector/theme | Aide-memoire |
| B. Requests for work program inputs | ||
| Fund request to Bank | ||
| Periodic update on progress | ||
| Bank request to Fund | ||
| Periodic macro update | ||
| C. Agreement on joint products and missions | ||
| DSA update | March 2009 | Board discussion in June 2009 |
| JSAN | March 2009 | Board discussion in June 2009 |
III. Table of Common Indicators Required for Surveillance
(As of December 10, 2008)
Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.
Both market-based and officially determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.
Foreign, domestic bank, and domestic nonbank financing.
The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.
Including currency and maturity composition.
Goods only, data on trade in services are not available.
Monthly (M), Quarterly (Q), Annually (A), and Not Available (NA).
| Date of latest observation | Date received | Frequency of Data7 | Frequency of Reporting7 | Frequency of publication7 | |
|---|---|---|---|---|---|
| Exchange Rates | Oct. 2008 | Nov. 2008 | M | M | M |
| International Reserve Assets and Reserve Liabilities of the Monetary Authorities1 | Sept. 2008 | Dec. 2008 | M | M | M |
| Reserve/Base Money | Oct. 2008 | Dec. 2008 | M | M | M |
| Broad Money | Oct. 2008 | Dec. 2008 | M | M | M |
| Central Bank Balance Sheet | Oct. 2008 | Dec. 2008 | M | M | M |
| Consolidated Balance Sheet of the Banking System | Oct. 2008 | Dec. 2008 | M | M | M |
| Interest Rates2 | Sept. 2008 | Dec. 2008 | M | M | M |
| Consumer Price Index | Sept. 2008 | Dec. 2008 | Q | Q | Q |
| Revenue, Expenditure, Balance and Composition of Financing3–General Government4 | NA | NA | NA | NA | NA |
| Revenue, Expenditure, Balance and Composition of Financing3–Central Government | Sept. 2008 | Dec. 2008 | M | M | Partial data published monthly. |
| Stocks of Central Government and Central Government-Guaranteed Debt5 | Sept. 2008 | Dec. 2008 | M | M | M |
| External Current Account Balance | 2007 | Feb. 2008 | A | A | NA |
| Exports and Imports of Goods and Services6 | June 2008 | Sept. 2008 | M | M | NA |
| GDP/GNP | Dec. 2007 | Feb. 2008 | A | A | NA |
| Gross External Debt | Dec. 2007 | Feb. 2008 | A | A | A |
| International Investment Position | NA | NA | NA | NA | NA |
Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.
Both market-based and officially determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.
Foreign, domestic bank, and domestic nonbank financing.
The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.
Including currency and maturity composition.
Goods only, data on trade in services are not available.
Monthly (M), Quarterly (Q), Annually (A), and Not Available (NA).
| Date of latest observation | Date received | Frequency of Data7 | Frequency of Reporting7 | Frequency of publication7 | |
|---|---|---|---|---|---|
| Exchange Rates | Oct. 2008 | Nov. 2008 | M | M | M |
| International Reserve Assets and Reserve Liabilities of the Monetary Authorities1 | Sept. 2008 | Dec. 2008 | M | M | M |
| Reserve/Base Money | Oct. 2008 | Dec. 2008 | M | M | M |
| Broad Money | Oct. 2008 | Dec. 2008 | M | M | M |
| Central Bank Balance Sheet | Oct. 2008 | Dec. 2008 | M | M | M |
| Consolidated Balance Sheet of the Banking System | Oct. 2008 | Dec. 2008 | M | M | M |
| Interest Rates2 | Sept. 2008 | Dec. 2008 | M | M | M |
| Consumer Price Index | Sept. 2008 | Dec. 2008 | Q | Q | Q |
| Revenue, Expenditure, Balance and Composition of Financing3–General Government4 | NA | NA | NA | NA | NA |
| Revenue, Expenditure, Balance and Composition of Financing3–Central Government | Sept. 2008 | Dec. 2008 | M | M | Partial data published monthly. |
| Stocks of Central Government and Central Government-Guaranteed Debt5 | Sept. 2008 | Dec. 2008 | M | M | M |
| External Current Account Balance | 2007 | Feb. 2008 | A | A | NA |
| Exports and Imports of Goods and Services6 | June 2008 | Sept. 2008 | M | M | NA |
| GDP/GNP | Dec. 2007 | Feb. 2008 | A | A | NA |
| Gross External Debt | Dec. 2007 | Feb. 2008 | A | A | A |
| International Investment Position | NA | NA | NA | NA | NA |
Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.
Both market-based and officially determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.
Foreign, domestic bank, and domestic nonbank financing.
The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.
Including currency and maturity composition.
Goods only, data on trade in services are not available.
Monthly (M), Quarterly (Q), Annually (A), and Not Available (NA).
Assistance committed under the original framework is expressed in net present value (NPV) terms at the completion point, and assistance committed under the enhanced framework is expressed in NPV terms at the decision point. Hence these two amounts can not be added.
Under the enhanced framework, an additional disbursement is made at the completion point corresponding to interest income earned on the amount committed at the decision point but not disbursed during the interim period.