As a matter of fact, the economic situation of CEMAC member countries had deteriorated significantly since 2014, bringing down the average ...
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As a matter of fact, the economic situation of CEMAC member countries had deteriorated significantly since 2014, bringing down the average growth rate of the sub-region from 2.1 percent in 2015 to less than 0.7 percent in 2016, with a public debt representing 44.6 percent of the Gross Domestic Product in 2016, as against 34.9 percent in 2015.
With regard to reserves, they had moved from 4 400 billion CFA Francs in 2015 to 1 900 billion CFA Francs, that is to say, from two to six months of imports in 2016. As regards the current external balance, it remained negative until 2016, below 10.2%.It was therefore necessary for Heads of State to devise solutions to address the crisis and create conditions for a sound and sustainable recovery for their respective economies, with the support of the IMF, by means of both national and regional efforts.
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| The Press Conference |
In this respect, under the leadership of the Head of State, Cameroon has contributed to leading a coordinated regional response to maintain the integrity of the monetary arrangement of the CEMAC, in other words, to preserve the economies of the community from an economic downturn that would have unprecedented consequences.
Within the CEMAC zone, the Cameroonian economy is particularly resilient, due to its greater diversification, the reliability of its industrial fabric and the dynamism of its domestic market.
However, being part of an integrated community, Cameroon began to suffer from the negative impact of the less resilient economies in the sub-region and the subsequent security-related shocks. The macroeconomic consequences were immediate, resulting in a sharp decline in international reserves of the CEMAC zone in general, and then finally to those of Cameroon specifically.
To stop this downward trend, our country developed a three-year economic and financial plan to restore the stability and external viability of the economy, while improving its competitiveness, strengthening the resilience of the financial sector and promoting a vigorous and sustainable growth.
This programme will also serve as a catalyst to mobilize foreign aid from its technical and financial partners within the framework of targeted budgetary support projects.
To support this programme which, I should make it clear, is a domestic initiative and not a programme imposed from outside, the Government signed on 26 June 2017, an agreement with the IMF whose funding is part of a mechanism referred to as the Extended Credit Facility.
This agreement relates to an amount of 483 million of Special Drawing Rights, or about 666.2 million US Dollars equivalent to approximately 400 billion CFA francs, including 102 billion CFA Francs available as soon as approval from the IMF Board of Directors is obtained.
It is important to note that this Agreement has allowed Cameroon to draw up to 175% of its own reserves whose ceiling stand today at 275 million of Special Drawing Rights.
It should also be mentioned that as a general rule, the Extended Credit Facility is the main tool that the IMF has at its disposal to provide support in the mid-term to countries facing macroeconomic imbalances.
The support granted covers a maximum period of three years. As I indicated earlier, the agreement with the IMF for this Extended Credit Facility paves the way for additional bilateral funding. In this regard, 887 billion CFA F are expected in addition to the funding of the IMF, from technical and financial partners, according to the following distribution:
- From the African Development Bank: 377 billion CFA F;
- From the World Bank: 247 billion CFA F;
- From France through the French Development Agency: 197 billion CFA F;
- From the European Union: 66 billion CFA F
It is worth indicating that the three-year Programme thus supported by the ECF and the attached additional financing schemes, is based on our own growth strategy as determined by the GESP. It also aims to achieve the social goals set by the Government.
In other words, there is no foreign interference in the signing of an agreement such as the one that Cameroon has just signed with the IMF.
Contrary to what has been aired here and there over the past few days, this is not therefore a Structural Adjustment Programme, but rather a support from technical and financial partners to the implementation of the government's in the area of economic and social development of the nation.
Better still, this commitment of our country is going to foster Cameroon's competitiveness and the growth potential in the medium term and further consolidate the national strategy in view of becoming an emerging economy by 2035.
That is, in any case, the Head of State's commitment with the entire nation. That is the legitimate aspiration of the Cameroonian people. - Issa Tchiroma Bakary
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