The government of Cameroon has borrowed FCFA 98.2 billion from Africa’s largest infrastructure financier, African Development Bank (AfDB) towards financing the country’s 2018 budget.
The financial agreement was signed in Yaounde on December 3. Alamine Ousmane Mey, Cameroonian Economy Minister signed the agreement on behalf of the government of Cameroon, while Solomane Koné, AfDB’s Country Manager, signed on behalf of the AfDB.
The loan is part of AfDB’s agreement “relating to the second phase of the competitiveness and economic growth support program (Pacce II)” according to Business in Cameroon.
Cameroon’s National Assembly this month approved the Government’s 2018 Budget of FCFA 4.5 trillion with more funds allocated towards infrastructure, security and health.
However, the government also indicated that with falling prices of oil and other natural resources, and growing insecurity in the North West and South West Regions, the tax man will increase its levy on businesses, and is likely to ask more from foreign donors.
Historically, Cameroon is one of the least aid-dependent countries in Sub-Saharan Africa. International partners such as the World Bank, the African Development Bank (AfDB), the European Union (EU), the Agence Française de Développement (AFD), the European Investment Bank (EIB), the Central African Economic and Monetary Community (CEMAC), the Banque de Développement des États de l’Afrique Centrale (BDEAC), the International Monetary Fund (IMF), the United Nations, and Germany have strengthened their coordination mechanisms in order to further the Paris Declaration and Busan agendas for Cameroon.
So far, the AfDB have borrowed lower-middle-income economy over FCFA 1 trillion divided in over 28 projects.
With the cancellation of AFCON 2019 last week, foreign and domestic lenders are likely to re-think just how much they can offer the country, and whether the country will be able to repay its debts.
The government budget for t