This debt sustainability analysis (DSA) provides an update to the joint World Bank-IMF LIC-DSA of April 2020, in the context of the Cameroonian authorities’ request for a second disbursement under the Rapid Credit Facility (RCF-2). It reflects updated projections for the macroeconomic framework and new information on borrowing, including Société Nationale de Raffinage (SONARA’s) agreed debt restructuring with the creditor banks. Overall, Cameroon is at high risk of debt distress; however, debt is assessed to remain sustainable. Thresholds for two external debt service indicators and one debt stock indicator are breached under the baseline, but the debt service indicators continue their downward trajectory except for a temporary increase due to the maturing Eurobond. Debt stock indicators remain below the thresholds after a one-off breach in 2020. On balance, debt is assessed as sustainable, although at high risk of external and overall public distress. The rating is highly vulnerable to a range of risks including unsuccessful completion of SONARA’s debt restructuring, more protracted and severe disruptions due to the pandemic, and socio-political tensions. Should downside risks materialize, the authorities would likely need to identify additional measures to maintain debt sustainability.
Details
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Document Date
2020/10/01
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Document Type
Board Report
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Report Number
155229
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Volume No
1
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Total Volume(s)
1
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Country
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Region
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Disclosure Date
2020/12/18
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Disclosure Status
Disclosed
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Doc Name
Cameroon - Joint World Bank-IMF Debt Sustainability Analysis
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Keywords
real gdp; debt service; contingent liabilities; contingent liability; alternative scenarios; primary balance; commodity price; market financing; natural disaster; real interest rate; public debt; public sector debt; nominal interest rate; oil and gas export; debt-creating flow; primary deficit; financing need; Public and Publicly Guaranteed; short-term debt; dollar term; export ratio; debt sustainability analysis; current account deficit; real exchange rate depreciation; debt dynamic; debt stock; grace period; external debt service; risk of debt; total public debt; total external debt; debt service projection; exchange rate change; domestic debt; downside risk; local bank; baseline scenario; debt relief; change in arrears; debt service relief; conversion of debt; private external debt; refined oil product; debt service burden; external debt sustainability; public sector borrowing; Effective interest rate; private investment rate; exchange rate projections; macroeconomic and fiscal; private sector debt
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Citation
Cameroon - Joint World Bank-IMF Debt Sustainability Analysis (English). Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/170881608337704130/Cameroon-Joint-World-Bank-IMF-Debt-Sustainability-Analysis