Africa

10, December 2019

French Cameroun: Yaounde launches platform to boost youth employment ⁰

YouthConnekt, a platform intended to boost youth entrepreneurship, job creation and social cohesion was launched in Cameroon on Monday.

Cameroon’s Minister of Youth Affairs and Civic Education, Mounouna Foutso, said the initiative will connect and empower Cameroonian youth with skills to fully take part in the development of the country.

“We have realized that many Cameroonian youths are not connected. We are now offering them this platform to connect to opportunities wherever they are found,” Foutso told reporters.

Over 5,000 youths including football star, Samuel Eto’o, attended Monday’s launch ceremony in the capital Yaounde.

YouthConnekt is a joint UN-Government initiative that seeks to connect young people to diverse socio-economic and political opportunities in order to optimize their empowerment and facilitate their full participation in development.

The initiative launched in 2012 in Rwanda is present in 12 African Countries.

“I encourage every young Cameroonian to seize the opportunities offered by YouthConnekt following the launching of the initiative in Cameroon. Our dear and beautiful country will be built in peace with the youth,” Cameroonian President Paul Biya tweeted immediately after the launch ceremony.

Source: Xinhuanet

8, December 2019

How the France-backed African CFA franc works as an enabler and barrier to development ⁰

Last month Benin president Patrice Talon shook the establishment table of France-Africa relations when he said in an interview the Francophone nations in West Africa want take more control over their CFA franc currency and plan to move some of their reserves away from France

“Psychologically, with regards to the vision of sovereignty and managing your own money, it’s not good that this model continues,” is reported to have told Radio France Internationale.

But while Talon’s comments was a something of a surprise, it was no longer a shock. Where once the idea of the questioning the status of the France-backed CFA franc seemed heresy, discussions around its future are becoming more common both from grassroots activists and in offices of African governments and opposition leaders.

Earlier this year, Luigi Di Maio, Italy’s former deputy prime minister and current minister of foreign affairs revived the controversy about the role of the CFA franc on Africa’s development with a provocative statement:“France is one of those countries that by printing money for 14 African states prevents their economic development and contributes to the fact that the refugees leave and then die in the sea or arrive on our coasts.”

Although President Emmanuel Macron of France said he would “not respond” to the statement, he did note that in the past “France will go along with the solution put forward by your [African] leaders.” The statement, however, has brought to question the CFA franc currency zone, the relations between the 14 countries within the CFA zone and France, and their impact on economic and development performance.

There is also a clear divergence in opinion among African leaders using the currency. In a recent trip to France, president Alassane Ouattara of Cote d’Ivoire qualified the discussion about the CFA franc as a “false debate,” considering that the currency is “solid and well-managed” as well as “stabilizing” African economies.

But Chad’s president Idriss Debby said back in 2015 he considers the CFA as “pulling African economies down,” and that “time has come to cut the cordon that prevent Africa to develop.” He called for a restructuring of the currency in order to “enable African countries which are still using it to develop.”

In my book Innovating Development strategies in Africa: The Role of International, Regional, and National Actors, I examine the political economy of the performance and economic development strategies of the countries from CFA franc zone from 1960 to 2010. Building on it and additional research, it is important to address this debate dispassionately with impartial analysis of how the CFA works, the arguments of its supporters and opponents both academically and politically, its broader impact on economic performance, and the options ahead.

The origin story

France’s Treasury guaranteed the CFA Franc under a fixed exchange rate dependent on the deposit of 50% of its reserves in the French central bank

The CFA franc was created in December 1945 when the French government ratified the Bretton Woods Agreement and became the currency of les colonies françaises de l’Afrique or the CFA (“French Colonies of Africa”). The French Treasury guaranteed the currency under a fixed exchange rate dependent on the deposit of 50% of CFA franc reserves into the French central bank. The CFA was later split into the Communauté Financière d’Afrique (“Financial Community of Africa”) which included the West African countries Benin, Burkina Faso, Côte d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal, and Togo and the Communauté Financière de l’Afrique Centrale(“Financial Community of Central Africa”) including Cameroon, the Central African Republic, Chad, the Republic of the Congo, Equatorial Guinea, and Gabon.

The Central Bank of West African States and the Bank of Central African States are responsible for coordinating monetary exchanges through operating accounts with the French Treasury. These accounts operate according to several rules, including:

Each central bank must maintain at least 50% of foreign assets with the French Treasury,
Foreign exchange cover of at least 20% should be maintained for “sight liabilities”
Each government is limited to a ceiling of 20% of that country’s revenue from the previous year.

The CFA franc monetary system is designed to guarantee the franc currency in international markets, while simultaneously preventing overdraft and inflation in CFA member countries. Between the early 1950s and the mid-1980s, CFA franc countries had stronger real GDP growth and lower inflation than other sub-Saharan African countries. For example, within the past fifty years, Côte d’Ivoire experienced an average inflation rate of 6%— a much lower rate than its neighbor Ghana, which averaged 29% inflation.

From 1960 to 1978, Cote d’Ivoire averaged an annual GDP growth rate of 9.5%, which then stagnated, while Ghana’s GDP responded positively to structural adjustment programs in the 1980s. Cote d’Ivoire, among other CFA countries, did not respond immediately to structural adjustment programs. Strong growth and low inflation from the early independence period did not survive the economic shocks of 1986 to 1993, and the CFA became significantly overvalued and subject to increasing deficits in the French Treasury’s operations accounts. Domestic production lapsed, and African countries increasingly relied on imported materials. CFA countries’ public debt increased and central banks exceeded statutory ceilings, leading to significant fiscal imbalances.

A woman hands over a 10,000 CFA ($16.50) note to pay for food during the attieke and fish festival in Abidjan, Ivory Coast,

In 1994, France devalued the CFA franc, raising the parity rate from 50 CFA francs per French franc to 100 CFA francs per French franc. CFA member countries’ governments imposed wage freezes and layoffs in the wake of the CFA devaluation, leading to widespread unrest over inaccessible goods for consumers and unmanageable price controls for suppliers.

Then Senegalese president Abdou Diouf had promised citizens during his 1993 campaign that franc would not be devalued. So in 1994 thousands of demonstrators responded to this broken promise as many suffered the effects of France bowing to Western pressure to increase the CFA franc’s parity rate. Just one month before the devaluation, Michel Roussin, the French Cooperation Minister, had said there was no chance at devaluing the CFA Franc because France was “very attached to the Franc Zone”.

Growing debates

The challenge of implementing effective monetary policies for growth and stability throughout Africa has led to years of debate over the CFA franc zone. Many European and African leaders have supported its continuation, while others seek separation between France, the European Union, and Francophone African countries.

The debates over the CFA franc often begin with the question of exchange rates and devaluation. Studies have shown that the CFA franc’s convertibility at a fixed exchange rate was the impetus for the 1994 devaluation; an average of 730 million French francs was being converted each month before 1992, which was a massive increase from the less than 284 million French francs converted monthly before 1984.

All the presidents. Burkina Faso’s Roch Marc Christian Kabore, Mauritania’s Mohamed Ould Abdel Aziz, France’s Emmanuel Macron, Mali’s Ibrahim Boubacar Keita, Chad’s Idriss Deby and Niger’s Mahamadou Issoufou pose during G5 Sahel Summit in Bamako, Mali, July 2, 2017.

Monetary policies that were effective in achieving real exchange rate depreciation also resulted in a reduction in government expenditures and a decline in investment. As a positive effect, the unlimited convertibility of the CFA franc to the euro has generally reduced the risk of foreign investment in CFA countries. Though, foreign investment in CFA countries remains low relative to other emerging economies, such as the BRICS economies that include South Africa.

Guinea, which has its own currency, still stands as an example for supporters of the CFA zone. Guinea frequently experiences currency shortages and its central bank does not have sufficient policies to ensure stability, so the CFA zone is presented as a solution to instability in this particular case.

Côte d’Ivoire president Alassane Ouattara has in the recent past contended that CFA zone countries are better off than Anglophone countries due to growth and low inflation, whereas the poor are disproportionately affected by unpredictable inflation in Anglophone countries. What is rarely discussed is that similar or better outcomes could be achieved with other policy options.

In terms of trade, the CFA’s fixed exchange rate to the euro has led to a greater facilitation of trade through the reduction of uncertainty and stabilization of domestic prices. The logic of fixed exchange rates traces back to the Bretton Woods period when 63% of developing countries had their currency pegged to that of an industrial country.

The potential problems with a fixed exchange rate are mostly offset in Central African Economic and Monetary Union (CAEMU) countries, due to these countries’ high levels of excess liquidity from oil revenues. However, West African Economic and Monetary Union (WAEMU) countries have experienced declining liquidity since 2004, thus suffering from the volatility of a fixed rate amidst external shocks.

Ideally, countries in the same monetary union should coordinate member countries’ fiscal policies to offset shocks in different parts of the union. However, no such coordination occurs in the CFA zone.

The CFA franc zone as a whole has thus resulted in:

Limited intra-regional trade, especially in Central Africa.
High dependence on producing and exporting a limited number of primary commodities.
A narrow industrial base.
A high vulnerability to external shocks.

A focus on primary commodities and limited intra-regional trade are broadly reflective of CFA franc member countries’ lack of export diversification and low industrialization. Intra-regional trade accounted for about 11% of total external trade of WAEMU countries, 6% of CAEMU countries, and only 9% of all CFA countries’ total external trade.The CFA franc’s fixed exchange rate is vulnerable to being a pawn on international markets to the detriment of the African economies.

The French government again considered devaluation in 2012, which, while disregarded as a rumor, was assumed to be a method of safeguarding the euro and maintain France’s credit rating. The CFA franc’s exchange rate could thus become a pawn in international markets to the detriment of CFA economies. In 2014, a drop in oil prices increased fiscal and current-account deficits within the monetary zone. Though, African leaders agreed to IMF-supported programs that inspired spending cuts to remedy the deficits instead of changing the exchange rate. This adamant support for the CFA franc’s peg to the Euro challenges the perspective that only European leaders support the fixed rate of CFA francs to Euros.

Debates over the persistence of the CFA franc zone also focus on African states’ independence and sovereignty. Large numbers of unemployed youth throughout sub-Saharan Africa—which may reach over 350 million over the next two decades—are often the loudest opponents of the CFA zone. Other pro-democracy movements, like Y’en a Marre in Senegal and Le Balai Citoyen in Burkina Faso, consider the dismantling of the CFA zone as essential to their campaigns to reform their countries’ respective governments. Other protests have included Kemi Seba, the Benin-born French activist who was charged with burning CFA notes in Senegal before being deported.

Some African economists consider the broader dependency on European monetary policies as a restriction to growth due to a hyper-fixation on inflation. However, African elite and wealthy individuals, the primary beneficiaries of the CFA franc zone configuration, support its continuation. Thus, debates will continue within the various dimensions of class, power, and politics.

The future

Scholars and policymakers have proposed several options to improve the viability of the CFA franc or replace the currency. Each option has advocates and opponents because the different policies target distinct challenges, such as exchange rate independence, inflation control, GDP-growth incentives, and capital mobility. The four most prominent options are to:

l. Tie the CFA franc to a basket of currencies, such as the dollar and the yuan. Pegging the CFA franc to multiple currencies will increase the relative stability of the currency in the event of exchange rate fluctuations of any of WAEMU or CAEMU’s trading partners. A basket peg based on an import-weighted index, as proposed by Crokett and Nsouli (1977), has also been evidenced to be more beneficial for developing countries. An import-weighted index would be most beneficial for WAEMU due to its high levels of import diversification, while a different configuration, such as an export-weighted index, a bilateral trade index, or an index based on the SDR (special drawing rights) might be more appropriate for the CAEMU zone that is highly focused on primary commodities. Though, in general, severe depreciation of basket currencies would have much graver effects on countries that mainly export primary products, such as CFA countries.

2. Restructure the reserve requirements for CFA franc countries. Higher levels of reserves will ensure the convertibility of the CFA franc, which is currently threatened by changing French and European fiscal policies. This option could be considered a short-term strategy, or precursor to other strategies, that may lead to greater monetary independence for CFA countries. However, in many CFA member countries, high reserves are derived from natural resource revenues, which are subject to changes in world prices and difficult to accommodate in the short-term.

3. Separate WAEMU and CAEMU into optimum currency areas. Optimum currency areas (OCA) have the benefits of high factor mobility, economic interdependence, sectoral diversification, and wage and price flexibility. The challenge is to support the costs related to the establishment of OCAs and ensure the establishment and compliance of uniform regulations. Though undoubtedly difficult to implement, this configuration could likely benefit both monetary unions because member states’ fiscal policies will be easier to coordinate within a similar regional context. Some research suggests West African CFA members of ECOWAS, the Economic Community of West African States, are already primed to become an OCA because these countries are best suited to integrate their real exchange rates. Although ECOWAS is mulling the launch of “Eco,” a new currency to be used by its 15 member states, including Nigeria, Aloysius Uche Ordu, former Vice President of the African Development Bank recently evaluated its prospects, and argues launching Eco by January 2020 “is, at best, an expensive distraction that the people of West Africa can ill afford at this particular moment”.

4. The establishment of the African Monetary Union. An African Monetary Union would be most challenging to implement and require countries to adhere to strict fiscal rules similar to the CFA zone until stability was achieved. This strategy requires significant investment and capital mobility to ensure a strong exchange rate union and currency convertibility. Movement of labor and capital are necessary to spur economic growth and stabilize relatively different economies. The appeal of an integrated African Monetary Union is the tremendous potential to increase intra-regional trade and encourage domestic production capabilities. However, another monetary union may lead to similar problems of dependence as the CFA franc zone.

Overall, policymakers from the CFA franc zone should analyze the various options to determine a short-term and long-term plan that will increase growth and lead to equitable development of countries that are at different stages. African and European leaders must be resolute and accountable to the various interest groups throughout their two continents.

Any restructuring of the CFA franc will have drastic macroeconomic effects that will require an increase to public investment and provision of public goods, attractive investment policies, development aid, and resource mobilization. The future of the CFA franc is yet to be determined, but it deserves comprehensive, sensitive analysis.

Source: Quartz Africa

28, November 2019

Cameroon launches mobile money service aggregation platform ⁰

Cameroon’s communication minister has signed a decree setting the conditions and operating rules for USSD for access to the national electronic communications aggregation platform, Business In Cameroon reported. This platform aims to ensure fair interconnection conditions, reduce the costs of mobile financial transactions, and promote financial inclusion. It will give access to mobile financial services via the shortcode hash 237 hash.

Philemon Zo’o Zame, director of the Telecommunications Regulatory Agency (ART), said the platform is housed at the state postal service Campost, which manages it and is responsible for implementing the decree. Zo’o Zame is inviting network operators and electronic communications service providers to connect to it within 30 days, by 26 December, for the provision of mobile financial services.

Source: Telecompaper

25, November 2019

Bank of Ambazonia to issue $10 Million bonds ⁰

Credible sources within the Interim Government of the Southern Cameroons (Ambazonia) have confirmed that Vice President Dabney Yerima will be announcing the creation of “THE BANK OF AMBAZONIA (BOA) and Chairman of the Board of Governors today November 25th, 2019. The Bank of Ambazonia, AKA “The Ambazonian Njangi House” is an organized all-inclusive Semi-Autonomous Informal Financial Structure (Shadow Bank) with credible representatives from constituent components of the revolution. This will provide the Ambazonian people and communities with alternative but safe sources of funding for Southern Cameroons Restoration without generating additional systemic risk.

Our sources are informed that this decision is guided by sound advice from the international community, Americans and encouraging statements from the Undersecretary of State for African Affairs, Tibor Nagy. The Interim Government is quickly learning to adapt to the fast-changing nature of the Southern Cameroons Restoration quest. After listening to the calls for a more accountable, transparent and inclusive financial structure to better mobilize resources to fund our Restoration, the Interim Government has opted to go back to basics and apply what has worked best for The Southern Cameroons community for the past 58 years.

“The successive murderous regimes in Cameroun shutdown The Southern Cameroons venerable Cameroon Bank and other major financial institutions that served our communities and completely limited access to money and formal financial institutions from our people. However, they underestimated the innovation and resilience of our people in surviving within this system. The sheer determination to survive and develop our communities for the past 58 years of occupation resulted in the establishment of a very robust informal financial sector call “NJANGI HOUSES” (Shadow Banks), that revolutionized economic development and self-reliance of our people to lean on each other” stated Brado Tabenyang Etchu, the Secretary of State for Economy and Finance.

Most of the development and education of the Southern Cameroons communities has been made possible through the proceeds of NJANGI HOUSES. The people of Southern Cameroons (Ambazonia) are again currently faced with similar, but monumental challenges in their quest to restore their independence. The international community and major financial institutions have shutdown access to funding from the Southern Cameroons community to help them prosecute this war of liberation from colonial Cameroun.

The Interim Government has concluded that we are on our own and must rely on our own innovative ways to fund this quest for liberation and there is nothing that has made our people and communities more self-reliant than our innovative NJANGI HOUSE initiatives and it is this inspiration that has guided the Interim Government to form the people’s bank.

“We must keep the enemy wondering because a bank gives us another element of surprise and institutional credibility” The government of Cameroun is incurring and mortgaging our resources to prosecute its genocidal war against our people and we cannot continue to idly watch and do nothing” noted VP Dabney Yerima.

The Bank through its Board of Governors will immediately certify the issuance of $10 million high interest yielding AmbaFreedomBonds (AFB) to the public for sale. Proceeds from the sales of these bonds will go towards financing of the revolution. We are going to incur these liabilities to defend and provide humanitarian relief to our refugees and IDPs and these liabilities are going to be part of any negotiations with the government of Cameroun and the world must take note. Southern Cameroonians and are encouraged to own a piece of their country and patronize the purchase of these bonds as a means to fund the struggle by going to www.ambabondholders.com Bundlers/professional sales agents will be used with a bonds-based commission redeemed at time of bond maturity. Your Bond, Your Freedom!

24, November 2019

Dangote Cameroon sees 6% sales drop in 9M19 ⁰

In the first nine months of 2019, Dangote Cameroon reported a decrease in its domestic performance with sales down six per cent.

“Our 1.5Mta clinker mill in Douala sold about 866,000t of cement in the first nine months of 2019, down six per cent from 920,000t sold in the same period in 2018. We estimate that our market share was 40 per cent during the period,” said the group.

The decline in performance has been attributed by the company due to persistent security problems in the northwest and southwest regions, where economic activity has been slowing down due to fighting between secessionists and defence forces.

In the first half of this year, Dangote had already reported a decline in activity, seeing its sales at 0.6Mt, or down 7.1 per cent YoY.

Published under Cement News

24, November 2019

Biya says greater efforts needed to revamp central African economy ⁰

Cameroonian president Paul Biya on Friday called for greater efforts to develop the economy of the Economic and Monetary Community of Central Africa (CEMAC).

“The volatility of prices of raw material continues to affect our economies, so we need to diversify more than ever before. Security challenges continue to have much pressure on our public finances,” Biya said in the capital Yaounde at the opening of the Extraordinary Summit of CEMAC Heads of State.

“Our common objective remains the acceleration of growth to respond to the legitimate needs of our population and particularly young people in terms of employment,” he added.

CEMAC growth rate stood at 1.8 percent in 2018, and inflation went above 3 percent, in spite of an uncertain world macroeconomic characterized by geopolitical and commercial tensions, Biya said.

“Our sub-region is resolute to continue its efforts to attain sustainable development and progress in spite of the obstacles it might encounter,” he said.

The summit is expected to “come up with a blueprint” that will “considerably” enhance regional integration and boost trade ties among member countries, according to CEMAC officials.

CEMAC is made up of Gabon, Cameroon, the Central African Republic, Chad, the Republic of the Congo, and Equatorial Guinea. With a total population of about 37 million, it was established to promote cooperation and exchange among its members.

Source: Xinhuanet

22, November 2019

Yaounde: Six-nation central African summit debates future of CFA franc ⁰

Leaders from six central African countries gathered Friday in Cameroon for a summit expected to focus on the CFA franc, whose future has come under question in West Africa.

The extraordinary one-day meeting in Yaounde included leaders from Cameroon, Chad, the Central African Republic, Equatorial Guinea, Gabon and the Republic of Congo.

Cameroon President Biya hosted the summit and said it “gives us a new opportunity to exchange and agree additional measures that can consolidate the economic recovery of our region.”

Five of the six nations were represented by their heads of state, while Gabon, whose President Ali Bongo Ondimba suffered a stroke last year, sent its prime minister.

As members of the Economic and Monetary Community of Central Africa (CEMAC), the nations jointly use the CFA franc, a currency rooted in the French colonial era in western and central Africa.

The CFA franc will be on the agenda, according to press kit distributed by Biya’s office.

“The currency inherited from colonisation divides economists and heads of state in the (CFA) franc zone,” it said.

“(It) is being presented by numerous financial experts as a brake to development.”

The CFA — its initials come from the French words for African Financial Community — was launched on December 26, 1945 as a “franc of the French colonies of Africa.”

The money then morphed into two geographic variants, one for eight countries in western Africa and another for six in central Africa, with a combined population of 155 million people.

CFA member countries must lodge reserves with the Bank of France.

The currency is essentially pegged to the euro, at a fixed rate of 655.96 CFA francs per euro.

The arrangement guarantees unlimited convertibility of CFA francs into euros, facilitates inter-zone transfers and helps price stability.

But detractors say the CFA franc is a “post-colonial” contract that prevents countries from exercising sovereignty over their currency, or which enables France to wield influence in Africa.

The 15 member states of the Economic Community of West African States (ECOWAS) have agreed to adopt a single currency, the “eco”, as early as next year.

Prospects of earlier changes to the region’s currency dramatically surfaced this month when Benin leader Patrice Talon said the western African states planned to pull their reserves from the Bank of France.

“We are all agreed, unanimously, that we should put an end to this model,” Talon told French broadcasters RFI and France 24 on November 14.

Source: AFP

20, November 2019

Ghana turns to Boeing in bid to relaunch airline, Air Senegal buys 8 Airbuses ⁰

The Republic of Ghana and Boeing signed a provisional order for three 787-9 Dreamliners on Tuesday at the Dubai Airshow.

Ghana intends to launch a new airline, the minister of aviation, Joseph Kofi Adda, told reporters, in which the government will hold a 10% stake and the rest will be held by the private sector.

In other news, Air Senegal signed a memorandum of understanding (MoU) for eight Airbus’ A220 aircraft at the Dubai Airshow on Tuesday.

Chief Executive Officer Ibrahima Kane said the planes would allow the airline to fly routes to Europe and West Africa when deliveries start in 2021.

REUTERS

19, November 2019

Africa Retailer Jumia Suspends E-Commerce In Cameroon ⁰

Online retailer Jumia Technologies said on Monday it had suspended its e-commerce platform activities in Cameroon because they were “not suitable” for the African state.

Dubbed “the Amazon of Africa”, the company founded in 2012 by two French former McKinsey consultants has grown quickly to become the continent’s leading e-commerce firm, operating in more than a dozen countries.

Jumia, whose share price hit a record low of $4.96 after Reuters reported the suspension on Monday, said it would continue supporting buyers and vendors in Cameroon using its classified portal Jumia Deals.

Cameroon’s economy is one of the largest in central Africa, but growth has been hit by a two-year separatist uprising in its Anglophone North-west and South-west regions.

“We came to the conclusion that our transactional portal as it is run today is not suitable to the current context in Cameroon,” Jumia said in a statement announcing that its e-commerce operations there had been suspended.

Jumia’s shares have tumbled from its Wall Street debut price of $14.50 in April and its last week’s third-quarter results missed revenue estimates for the second time in three quarters.

With an e-commerce business similar to Amazon’s and a classified portal like Alibaba’s, Jumia sells its own stock, taking a cut of third-party transactions on its website.

A source at the company in Cameroon said it had chosen to prioritize growth over profitability, which had not paid off.

“We wanted to see how business evolved. We can come back, but for now we’re closing (to have) time to study the market,” the source, who declined to be named, told Reuters.

The International Monetary Fund said in November that economic growth in oil-producing Cameroon was likely to slow to 3.9% this year from 4.1% in 2018 due to a subdued performance by the country’s non-energy sector.

And U.S. President Donald Trump said last month he would end Cameroon’s preferential trade benefits under the African Growth and Opportunity Act (AGOA) from January because the government had not dealt with abuses by the security forces.

Cameroon’s government and military have rejected the allegations and have said that Anglophone separatists are responsible for human rights violations.

Source: One America News Network

9, November 2019

IMF Staff Completes Review Mission to Cameroon ⁰

An International Monetary Fund (IMF) team, led by Mr. Amadou Sy, visited Yaoundé during October 28—November 8, 2019 to discuss the fifth review of the program supported by the ECF that was approved in June 2017 .

At the conclusion of this visit, Mr. Sy issued the following statement:

“The IMF team reached staff-level agreement with the authorities on economic and financial policies that could support approval of the fifth review of their three-year program under the ECF. The IMF Executive Board could consider the fifth review in mid-December 2019. The completion of the fifth review would enable a sixth disbursement of SDR 55.2 million (about US$ 76.5 million).

“Overall economic growth is estimated to reach 3.9 percent in 2019, from 4.1 percent in 2018. The strong rebound of the oil and gas sector will help contain the lower than anticipated expansion in the non-oil sector. While the oil and gas sector is expected to grow by 6.0 percent after three years of deceleration, security challenges and the suspension of SONARA’s production since June 2019 is weighing on short-term growth prospects. Non-oil activity is estimated to soften at 3.8 percent in 2019 from 4.4 percent in 2018. Inflation remains low but is trending up from 1.1 percent in 2018 to 2.3 percent in September 2019, (y/y) mainly owing to higher food prices and with strong regional variations.

“Fiscal performance in 2019 faces increased headwinds due to security challenges, the delayed implementation of new tax measures, and SONARA’s financial difficulties. Structural reforms are moving ahead, albeit with slow progress. The authorities are considering expanding the non-oil revenue base, including by reducing tax exemptions, raising VAT efficiency, and improving tax and customs administration. They are committed to addressing risks from contingent liabilities, including from SONARA and other state-owned enterprises, and safeguarding debt sustainability including by continuing to increase the share of concessional loans in new borrowing.”

“The medium-term outlook remains positive, with non-oil growth expected to gradually rise thanks to the completion of the investments in infrastructure and energy projects and a gradual resolution of the security crisis. Fiscal consolidation over 2020-21, together with enhanced foreign exchange repatriation will support a continued rebuilding of BEAC reserves. Structural reforms to increase public investment efficiency, strengthen public enterprises and support private sector development will support the growth outlook going forward.”

“The team wishes to thank the Cameroonian authorities for their hospitality, cooperation, and the constructive dialogue.”

The team met with Prime Minister Joseph Dion Ngute, Minister of State Secretary General at the Presidency Ferdinand Ngoh Ngoh, Minister of Finance Louis Paul Motaze, Minister of Economy, Planning, and Regional Development Alamine Ousmane Mey, BEAC National Director Eugene Blaise Nsom, and other senior officials. The mission also met representatives of the diplomatic and donor communities as well of the private sector.