Front Matter Page
IMF Country Report No. 19/247
CAMEROON
FOURTH REVIEW UNDER THE EXTENDED CREDIT FACILITY ARRANGEMENT AND REQUESTS FOR WAIVERS OF NONOBSERVANCE OF PERFORMANCE CRITERIA AND MODIFICATION OF PERFORMANCE CRITERIA—PRESS RELEASE; STAFF REPORT; AND STATEMENT BY THE EXECUTIVE DIRECTOR FOR CAMEROON
July 2019
In the context of the Fourth Review under the Extended Credit Facility Arrangement, the following documents have been released and are included in this package:
A Press Release including a statement by the Chair of the Executive Board.
The Staff Report prepared by a staff team of the IMF for the Executive Board’s consideration on July 17, 2019, following discussions that ended on May 3, 2019, with the officials of Cameroon on economic developments and policies underpinning the IMF arrangement under the Extended Credit Facility. Based on information available at the time of these discussions, the staff report was completed on June 17, 2019.
A Supplement updating information on recent developments.
A Statement by the Executive Director for Cameroon.
The documents listed below have been or will be separately released:
Letter of Intent sent to the IMF by the authorities of Cameroon*
Memorandum of Economic and Financial Policies by the authorities of Cameroon*
Technical Memorandum of Understanding*
*Also included in Staff Report
The IMF’s transparency policy allows for the deletion of market-sensitive information and premature disclosure of the authorities’ policy intentions in published staff reports and other documents.
© 2019 International Monetary Fund
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Front Matter Page
CAMEROON
FOURTH REVIEW UNDER THE EXTENDED CREDIT FACILITY ARRANGEMENT AND REQUESTS FOR WAIVERS OF NONOBSERVANCE OF PERFORMANCE CRITERIA AND MODIFICATION OF PERFORMANCE CRITERIA
June 17, 2019
Key Issues
Context. Growth is estimated to have rebounded to 4 percent in 2018, supported by stronger-than-anticipated oil and gas production and Africa Cup of Nations (CAN) projects. The overall fiscal deficit declined by half to 2½ percent of GDP, and external buffers are being rebuilt. Public debt continues to increase, due to faster project disbursements.
Outlook and risks. Key short-term risks stem mostly from the regional and domestic security challenges, as well as political uncertainty ahead of the Fall legislative, regional, and municipal elections. The medium-term outlook remains positive, driven by the completion of CAN projects and the coming on stream of transport and energy projects.
Program status. Program implementation has improved from a year ago but challenges remain. All but two quantitative performance criteria were met with large margins. The continuous PC on external arrears accumulation was temporarily breached starting in January, but the arrears were repaid in full in April. The net BEAC financing of the government PC was missed by ½ percent of GDP owing to cash management difficulties. Structural reforms are advancing, albeit with delays.
Key policy recommendations.
Press on with fiscal consolidation, supported by reductions in tax exemptions, enhancements in tax and customs administration, and greater investment efficiency.
Continue to enhance fiscal discipline, by reducing resort to exceptional spending procedures, and resolutely addressing cash management challenges.
Maintain debt sustainability by carefully prioritizing foreign-financed investment and reducing fiscal risks from SOEs.
Continue to support the regional reform strategy through strict implementation of the new foreign exchange regulation.
Improve governance and the business environment to support private sector development and economic diversification, including by accelerating financial sector reforms and enhancing compliance with EITI and AML/CFT standards.
Staff views. Staff supports the authorities’ requests for completion of the fourth review, waivers of non-observance of performance criteria and modification of performance criteria. Upon completion of the review, a disbursement of SDR 55.2 million (20 percent of quota) will be made available, for a cumulative amount of SDR 372.6 million or 135 percent of quota.
Approved By
David Owen and Martin Sommer
Discussions took place in Yaoundé during April 23-May 3, 2019. The staff team comprised Ms. Deléchat (head), Messrs. Barry, Tintchev, and Nsengiyumva (all AFR), Ms. Schauer (SPR), Messrs. Portier (MCM), and Sow (FAD). The team was supported by Mr. Tchakoté (local economist), and Ms. Canales, Ibrahim and Synak. Staff of the African Development Bank, the CEMAC Commission, and the World Bank attended some of the policy meetings.
Contents
Glossary
BACKGROUND AND RECENT DEVELOPMENTS
PROGRAM PERFORMANCE
POLICY DISCUSSIONS
A. Outlook and Risks
B. Fiscal Policy: Maintaining Fiscal Discipline and Rebuilding Buffers
C. Strengthening Fiscal Governance: Pressing on with Structural Fiscal Reforms
D. Debt Policies: Maintaining Debt Sustainability and Controlling Risks from Contingent Liabilities
E. Monetary and Financial Sector Policies: Accelerating Reforms
F. Enhancing Governance and the Business Climate
PROGRAM MODALITIES
STAFF APPRAISAL
FIGURES
1. Real Sector Developments, 2015–19
2. Fiscal Sector Developments, 2013–19
3. External Sector Developments, 2012–19
4. Monetary Sector Developments, 2014–19
5. Financial Sector Developments, 2012–19
TABLES
1. Selected Economic and Financial Indicators, 2016–24
2a. Central Government Operations, 2016–24
2b. Central Government Operations, 2016–24
3. Balance of Payments, 2016–24
4. Monetary Survey, 2016–24
5. Financial Soundness Indicators, 2014–19
6. Risk Assessment Matrix
7. External Financing Requirements, 2017–24
8. Gross Fiscal Financing Needs, 2016–24
9. Proposed Schedule of Disbursements under the ECF Arrangement, 2017–20
10. Capacity to Repay the Fund, 2016–33
ANNEXES
I. Fuel Pricing and Subsidies
11. The Treasury Single Account Reform in Cameroon
III. The Macroeconomic Impact of Enhancing Public Investment Efficiency
APPENDIX
I. Letter of Intent
Attachment I. Supplementary Memorandum of Economic and Financial Policies, 2017–19
Attachment II. Technical Memorandum of Understanding
Glossary
| BEAC |
Regional Central Bank (Banque des États de l’Afrique Centrale) |
| CEMAC |
Central African Economic and Monetary Community (Communauté Économique et Monétaire de l’Afrique Centrale) |
| CFA |
Central African Financial Cooperation (Coopération Financière en Afrique Centrale) |
| CNDP |
National Public Debt Committee (Comité National de la Dette Publique) |
| COBAC |
Regional Supervisory Body (Commission Bancaire de l’Afrique Centrale) |
| CSPH |
Hydrocarbon Prices’ Stabilization Fund (Caisse de Stabilisation des Prix des Hydrocarbures) |
| DGD |
Directorate General of Customs (Direction Générale des Douanes) |
| DGI |
Directorate General of Taxes (Direction Générale des Impôts) |
| DSA |
Debt Sustainability Analysis |
| EITI |
Extractive Industries Transparency Initiative |
| EPA |
European Partnership Agreement |
| FSAP |
Financial Sector Assessment Program |
| GESP |
Growth and Employment Strategy Paper |
| GFSM 2001 |
Government Financial Statistics Manual of 2001 |
| MFI |
Micro-Finance Institution |
| MTBF |
Medium Term Budgetary Framework |
| MTEF |
Medium Term Expenditure Framework |
| NOPD |
Non-Oil Primary Deficit |
| NPL |
Nonperforming Loan |
| PFM |
Public Financial Management |
| PIMA |
Public Investment Management Assessment |
| REER |
Real Effective Exchange Rate |
| SME |
Small and Medium-Size Enterprise |
| SOE |
State-Owned Enterprise |
| SNH |
National Hydrocarbons Company (Société Nationale des Hydrocarbures) |
| SONARA |
National Oil Refinery (Société Nationale de Raffinage) |
| SSA |
Sub-Saharan Africa(n) |
| VAT |
Value-Added Tax |
| WEO |
World Economic Outlook |
Front Matter Page
CAMEROON
FOURTH REVIEW UNDER THE EXTENDED CREDIT FACILITY ARRANGEMENT AND REQUESTS FOR WAIVERS OF NONOBSERVANCE OF PERFORMANCE CRITERIA AND MODIFICATION OF PERFORMANCE CRITERIA— SUPPLEMENTARY INFORMATION AND SUPPLEMENTARY LETTER OF INTENT
July 1, 2019
Approved By
David Owen (AFR) and Martin Sommer (SPR)
Prepared by the African Department in consultation with the Legal Department and the Strategy, Policy and Review Department
Front Matter Page
Press Release No. 19/288
FOR IMMEDIATE RELEASE
July 17, 2019
International Monetary Fund
Washington, D.C. 20431 USA
Telephone 202–623–7100
Fax 202–623–6772
