21, November 2023
Fitch Ratings has altered Cameroon’s outlook from stable to negative while maintaining its long-term foreign-currency issuer default rating at the “B” level.
The adjustment in outlook is attributed to rising liquidity pressures arising from heightened spending requirements, as well as challenging conditions in both domestic and external market financing, as stated in a statement by the rating agency on Friday.
Furthermore, Fitch highlighted structural deficiencies in public finance management and noted the country’s exposure to downside risks in the budget balance stemming from political and social pressures as contributing factors to the outlook revision.
“It was revealed in July that the authorities were late in making external debt service payments to one commercial creditor on four occasions between January and November 2022, underscoring weak debt management capacity and the extent of liquidity pressures,” the report mentioned.
Fitch anticipates that Cameroon will maintain a moderate budget deficit of 1.3 percent of GDP in cash terms in 2023 and 1.4 percent in 2024.
Despite this, the rating agency projects an increase in real GDP growth, reaching 3.8 percent in 2023 compared to 3.6 percent in 2022. Additionally, Fitch foresees a further rise to 4.1 percent in 2024 and 4.4 percent in 2025.