6, July 2022
IMF team visits Cameroon, says outlook is clouded with considerable uncertainty! 0
An IMF team was recently in Cameroon to share economic perspectives with the country’s authorities. As part of the visit, the IMF team reached a staff-level agreement with the country’s authorities on the economic and financial policies which could support the approval of the Second Review of the program under the ECF and EFF arrangements. The agreement is subject to approval of the IMF Executive Board in late July 2022, which would enable the disbursement of SDR 55.2 million (about US$73.6 million).
According to the IMF, economic growth slowed to 0.5 percent in 2020 affected by the COVID-19 pandemic and security tensions in the region. Growth rebounded in 2021 and reached 3.6 percent for the year, supported by a domestic recovery and the general global economic recovery. Inflation for the year averaged 2.3 percent and the current account deficit (including grants) widened to 4.0 percent of GDP.
According to the global development finance institution, Cameroon’s economic outlook for 2022 remains positive and the economy is expected to grow by 3.8 percent. However, the outlook is clouded with considerable uncertainty arising from the sharp increase in international commodity prices—especially for oil, fertilizer, and foodstuffs—accentuated by the war in Ukraine, and tightening conditions in international financial markets. Average inflation is expected to rise to 4.6 percent, while higher oil export receipts should further improve the current account deficit to 2.1 percent of GDP. The authorities are committed to a fiscal policy anchored on a gradual reduction of the deficit and are revising the budget to maintain the deficit (cash basis, including grants) at 2.5 percent of GDP—much the same as in the original budget. This should bring the stock of public debt down to around 44 percent of GDP by end-2022.
It added that the impact of higher international oil prices on the budget is mixed as the higher oil revenues are more than offset by substantially higher fuel subsidies (estimated at 2.9 percent of GDP from 0.5 percent in 2021) aimed at maintaining the administered retail fuel prices unchanged. The higher subsidy costs are therefore being accommodated by reducing other spending, including spending on investment projects. The high cost of fuel subsidies would be difficult to sustain under current international oil price projections. However, the gradual phasing out of fuel subsidies would need to be accompanied by a substantial scaling-up of the social cash transfer mechanism.
The team shared the authorities’ concern with the rise in food prices and welcomed the authorities’ effort to ensuring adequate supplies of fertilizer so that the next harvest will be plentiful.
Also, the medium-term outlook remains positive, though facing considerable uncertainties. The economic strategy remains focused on rebuilding fiscal and external buffers to sustain macroeconomic stability. At the same time, the pace of structural reform needs to be accelerated for the country to meet its development goals. The business environment needs to be improved for the private sector to take the lead role in supporting growth. The team welcomed the authorities’ continued efforts to improve public financial management and governance, including the accountability of budget execution. The team also welcomed the authorities’ efforts to strengthen the financial management of state enterprises, including recent progress on SONARA’s restructuring. The completion of key infrastructure projects, especially for energy and transport, should boost economic growth and support the replacement of imported with domestically produced goods.
The IMF team acknowledged the authorities’ commitment to implementing policies consistent with the stability of the region’s monetary arrangement, which includes rebuilding foreign exchange reserves at the Bank of Central African States (BEAC). To this end, the authorities are working to strengthen compliance with the foreign exchange regulations notably regarding the repatriation of export earnings, while not impeding legitimate payments overseas.
By Rita Akana in Yaounde
6, July 2022
Pilgrims arrive in Mecca for largest hajj 0
The biggest hajj pilgrimage since the coronavirus pandemic began kicks off Wednesday, with hundreds of thousands of mostly maskless worshippers expected to circle Islam’s holiest site in Saudi Arabia’s Mecca.
One million fully vaccinated Muslims, including 850,000 from abroad, are allowed at this year’s hajj, a major break from two years of drastically curtailed numbers due to the pandemic.
At Mecca’s Grand Mosque, pilgrims will perform the “tawaf”, the circumambulation of the Kaaba, the large cubic structure draped in golden-embroidered black cloth that Muslims around the world turn towards to pray.
Many have chosen to perform the ritual ahead of Wednesday’s official hajj start date.
On Tuesday afternoon, white-robed male worshippers and women in colourful abayas walked side by side on the white floors near the Kaaba, the majority without a mask even though authorities said last month that masks would be mandatory at the site.
“I just prayed for you,” one pilgrim, wearing a green robe, said during a video call with relatives.
“I love you mother, I love you all,” she added, waving into her mobile phone screen as she continued walking around the Kaaba.
Five days of rituals
This year’s hajj is larger than the pared-down versions staged in 2020 and 2021 but still smaller than in normal times.
In 2019, some 2.5 million Muslims from around the world participated in the annual event—a key pillar of Islam that able-bodied Muslims must undertake at least once in their lives.
But after that, the coronavirus outbreak forced a dramatic downsizing. Just 60,000 fully vaccinated citizens and residents of the kingdom took part in 2021, up from a few thousand in 2020.
The pilgrimage consists of a series of religious rites which are completed over five days in Islam’s holiest city and its surroundings in western Saudi Arabia.
On Thursday, the pilgrims will move to Mina, around five kilometres (three miles) away from the Grand Mosque, ahead of the main rite at Mount Arafat, where it is believed the Prophet Mohammed delivered his final sermon.
This year’s hajj is restricted to vaccinated Muslims under the age of 65 chosen from millions of applicants through an online lottery system.
Those coming from outside Saudi Arabia were required to submit a negative Covid-19 PCR result from a test taken within 72 hours of travel.
Since the start of the pandemic, Saudi Arabia has registered more than 795,000 coronavirus cases, more than 9,000 of them fatal.
‘Too hot’
Those attempting to perform the hajj without a permit face fines of 10,000 Saudi riyals (around $2,600).
Policemen in the mountainous city have set up checkpoints and conducted foot patrols while holding green umbrellas to shield themselves from the scorching sun.
Temperatures in Mecca topped 40 degrees Celsius (104 degrees Fahrenheit) on Tuesday.
Inside the Grand Mosque, female medics were on standby in different locations, and volunteers with wheelchairs were waiting in a long queue to help those needing assistance.
Authorities have set up multiple health facilities, mobile clinics and ambulances to cater to pilgrims.
Some pilgrims donned clothing featuring the names and flags of their countries. “Hajj 2020 — Chad” was written on the back of the white robes of one group.
Hosting the hajj is a matter of prestige and a powerful source of political legitimacy for Saudi Arabia’s rulers.
Costing at least $5,000 per person, it is also a money-spinner for the world’s biggest oil exporter, which is trying to diversify its economy.
In normal years, the pilgrimage brings in billions of dollars.
These days it represents a chance to showcase the kingdom’s ongoing social transformation, despite persistent complaints about human rights abuses and limits on personal freedoms.
Saudi Arabia now allows women to attend the hajj unaccompanied by male relatives, a requirement that was dropped last year.
“Being here is the best thing that has ever happened to me. I can’t wait for the rest,” said 42-year-old Egyptian pilgrim Naima Mohsen, who came to the Grand Mosque by herself Tuesday.
“My only problem is the weather. It’s just too hot.”
Source: AFP