Business in Cameroon | Paul Biya, President of the Republic of Cameroon, recently signed a decree authorizing the Minister of Economy Alamine Ousmane Mey to sign a XAF54.1 billion loan agreement with the International Development Association (IDA). According to the decree, this loan will fund the third development policy support operation in Cameroon.
This new loan will boost the country’s debt to the World Bank Group, which is already Cameroon’s largest multilateral financial partner. Indeed, according to Autonomous Sinking Fund (CAA), as of end-March 2021, Cameroon’s debt was composed at 37.5% (XAF1,054.9 billion) of loans contracted from the IDA and IBRD (two windows of the World Bank group) [ed. note: against 30% for the AfDB].
The loan agreement Alamine Ousmane Mey is authorized to sign brings back the problem of fund disbursements concerning loans contracted from financial partners. Indeed, in great need of financing, Cameroon signed several loan agreements worth billions with technical and financial partners. However, some of those loans are yet to be disbursed even though the country now has to pay the interest on some of them.
According to the CAA, the World Bank Group is the partner with the highest volume of those Committed but not yet disbursed loans. In its report on Cameroon’s public debt as of late March 2021, the CAA reveals that the external loans committed but not yet disbursed [excluding budgetary support] were XAF3,163.3 billion. “They will reach 53.5% of the funding agreements signed by multilateral donors including XAF651.7 billion from the World Bank, through its IDA and IBRD windows,” the CAA reported.
The institution added that the XAF651.7 billion from the World Bank represents 37.1% of the overall loans committed to Cameroon but not yet disbursed.