The board of the International Monetary Fund (IMF) has approved a $689.5 million three-year financing agreement to aid Cameroon’s economic recovery from the COVID-19 pandemic and support its pledged reforms.
In a statement, the IMF announced that arrangements were approved under the Extended Credit Facility (ECF) and the Extended Fund Facility (EFF) which enables immediate disbursements of the equivalent of $177.2 million.
“Cameroon faces significant development challenges heightened by the pandemic. An upsurge in COVID-19 cases since January 2021, has raised concerns about growth prospects.”
“Steadfast commitment to strengthen transparency and good governance and reduce corruption risks will be crucial.”
The Coronavirus crisis and trade shocks from a sharp fall in oil prices led Cameroon’s economy to contract 1.5%, according to IMF estimates.
A gradual recovery could see the economy posting growth of 3.6% in 2021 and 4.6% in 2022, the Fund says.
Following the approval for Cameroon, Mitsuhiro Furusawa, IMF Deputy Managing Director and Acting Chairman, in a statement on Thursday, said “…the COVID-19 pandemic has heightened Cameroon’s development challenges and has raised concerns about its growth prospects and external and fiscal positions.
In this context, financing under the ECF and EFF arrangements would support the authorities’ efforts to achieve a rapid post-pandemic recovery, strengthen medium-term external and fiscal sustainability, and implement their structural reform agenda toward sustained, more inclusive, and diversified growth.
Effective and resolute implementation of the authorities’ reforms, particularly to further strengthen transparency, good governance, and the anti-corruption framework, are essential to help catalyze additional donor financing.
The authorities have appropriately adopted a revised budget, with a larger deficit to accommodate the impact of the pandemic. They have reiterated a firm commitment to gradually return to the fiscal consolidation path to safeguard debt sustainability as soon as the pandemic abates.
The success of Cameroon’s program will also depend on the implementation of supportive policies and reforms by the CEMAC regional institutions.