Biya regime borrows CFA1 trillion in foreign currency in first nine months of 2024 ⁰

Cameroon’s public debt rose significantly in the first nine months of 2024. According to data from Cameroon’s debt management agency, the national sinking fund (CAA), the country’s Treasury borrowed CFA1.079 trillion from international lenders between January and September. Ten new loans were signed with various financial institutions to support development projects and help accelerate domestic debt payments.

Breaking down the figures, the largest borrowing occurred in July 2024 when Cameroon secured CFA323.8 billion from American bank Citi Group. These funds aimed to speed up the payment of overdue domestic bills that had been pending at the Treasury for over three months, in line with Cameroon’s economic program with the IMF.

Besides the international bond from Citi Group, Cameroon also signed project loans totaling CFA775.4 billion in the first three quarters. These project loans represent almost 72% of the total foreign borrowings so far, achieving 79.5% of the annual target set in the 2024 revised budget law, which capped project loans at CFA950 billion.

Higher Interest Rates

The CAA report highlighted that 60.1% of these loans were at non-concessional, market-level interest rates, amounting to CFA446.5 billion. In contrast, 39.9% were concessional loans, totaling CFA308.8 billion, which typically carry lower rates. This reliance on higher-interest loans means Cameroon is now borrowing more from commercial banks like Standard Chartered, Exim Bank USA, and Citi Group, which generally don’t offer reduced rates like multilateral institutions such as the World Bank or IMF.

This shift towards non-concessional loans increases Cameroon’s interest obligations, further straining public finances. For example, in just the first nine months of 2024, Cameroon’s Treasury paid CFA250 billion in interest to international lenders. To put this in perspective, this amount could fund projects like the construction of Douala’s second bridge over the Wouri River (estimated at CFA140 billion) and cover the CFA100 billion needed to rehabilitate the Lagdo Dam (72 MW) in northern Cameroon, which remains critical for electricity supply in the region.

Source: Business in Cameroon