What is the new program?
The COVID-19 pandemic continues to severely impact Cameroon’s economy, amplifying existing development challenges, and raising concerns about its growth prospects, and its external and fiscal positions.
The authorities want to achieve a rapid post-pandemic recovery, strengthen macroeconomic stability and implement their structural reform agenda to achieve more inclusive and diversified growth.
The IMF is providing policy advice and financing to support the government’s program, while ensuring resources are used for their intended purposes, and good governance measures are in place.
The new three-year arrangements under the Extended Credit Facility (ECF) and the Extended Fund Facility (EFF) in the amount of SDR 483 million (about US$ 689.5 million, or 175 percent of Cameroon’s quota) will also help catalyze donor support to Cameroon.
The program was approved by the IMF Executive Board on July 29, 2021, which makes available the first disbursement of $177.2 million. Subsequent disbursements are subject to review, which are scheduled, at most, six months apart. These reviews assess the government’s progress in implementing its economic reforms.
What are the goals of Cameroon's new program?
The central aim of the authorities’ economic program, supported by arrangements under the IMF’s ECF and EFF, is to avoid a sudden contraction in the spending needed to fight the pandemic. Then, once the crisis abates, to decisively implement measures to increase non-oil revenue and resume fiscal consolidation.
Structural reforms also need to be accelerated to achieve economic diversification, gender equality, financial sector stability, and inclusion, as well as a greener economy.
There are five pillars to the new arrangements. These will help achieve sustained, more inclusive and diversified growth, and catalyze private investment and donor financial support.
The program will seek to (i) mitigate the health, economic, and social consequences of the COVID-19 pandemic while ensuring macroeconomic stability; (ii) reinforce good governance, and strengthen transparency and anti-corruption efforts; (iii) accelerate structural fiscal reforms to modernize tax and customs administrations, mobilize revenue, improve public financial management, increase investment efficiency, and reduce fiscal risks from state-owned enterprises; (iv) strengthen debt management and reduce debt vulnerabilities; and (v) implement structural reforms to accelerate private sector-led economic diversification and boost financial sector resilience.
More details of the authorities’ program can be found in the Staff Report.
How will Cameroon's new IMF program advance the governance and anti-corruption agenda
Promoting good governance has been, and remains, an essential part of the Fund’s engagement with the Cameroonian authorities.
The emergency financing that the Fund provided under the Rapid Credit Facility (RCF) in 2020 was specifically provided to help Cameroon meet emergency financing needs arising from the COVID-19 pandemic.
Emergency financing is not subject to conditions like other IMF programs. But to help ensure financing does indeed support the fight against the pandemic, and to strengthen transparency, the IMF often requests audits of COVID-19-related spending.
In Cameroon, the IMF requested (i) an audit by the Supreme Court’s Audit Bench and its submission to IMF staff, the Prime Minister, the Senate and the National Assembly, (ii) the publication of COVID-19 procurement information, including beneficial ownership, and (iii) the publication of a report on COVID-19-related expenditures.
What transparency and good governance measures are in place under the new program?
Under the terms of the new program, the IMF required that these three conditions above were met before approval of the new ECF-EFF program.
This latest program aims to help Cameroon further strengthen accountability and support anti-corruption efforts by enhancing the legal and institutional frameworks needed to produce publicly-disclosed audits.
The Fund is working with the authorities on a new capacity development tool aimed at building the institutional capacity of Supreme Audit Institutions such as the country’s Audit Bench.
Having information like the Audit Bench report in the public domain will support effective follow-up by the appropriate institutions in Cameroon. This includes addressing shortcomings in control and oversight, as well as actions to further investigate and sanction administrative and criminal violations.
Going forward, surveillance missions, program reviews, and technical assistance by the IMF will also help the country strengthen governance, transparency, and accountability. At the same time, IMF staff will continue to engage with not only the authorities, but all stakeholders to promote good governance and anti-corruption.