IMF intensifies pressure on gov’t to reconstruct SONARA.

The report zooms on meetings the IMF delegation had with Cameroonian authorities in October 2024, to review the progress on reforms and the authorities’ policy priorities.

This was within the context of the seventh review of IMF’s four-year economic program supported by the Extended Credit Facility, ECF, the Extended Fund Facility, EFF, arrangements, and the second review of the Resilience and Sustainability Facility, RSF.

According to the IMF report, Cameroon’s economic recovery has continued though there have been delays in structural reforms, especially in the implementation of the structural reform agenda.

The report was categorical that to attain the ambitious objectives of the National Development Strategy, SND30, government has to “complete important measures set out in the program concerning governance in the extractive industry sector, the business climate, SOE reform, and public financial management”.

The IMF went further to specifically urge “authorities to advance long-pending work on the SONARA restructuring plan and revise the 2013 law to streamline investment incentives”. 

Worth recalling is the fact that the Bank of Central African States, BEAC, had in 2024, linked the slow pace on the growth of foreign reserves of CEMAC member States to delays in the rehabilitation of SONARA. 

The governor of BEAC, Yvon Sana Bangui, had lamented that since the breakdown of SONARA, which has prompted Cameroon to be importing all petroleum product derivatives, the contribution is no longer forth coming.

He had asserted that SONARA must be rebuilt as soon as possible, if CEMAC foreign reserves must be protected and permitted to keep growing to support imports.

"Cameroon must restore SONARA very quickly. Since a fire destroyed the refinery in May 2019, Cameroon has been importing all its finished petroleum products, including gasoline, diesel, kerosene, and some domestic gas. This has weakened CEMAC´s foreign exchange reserves,” Sana Bangui had told reporters. 

IMF signs new agreement with gov’t 

The report also announces the signing of another cooperation agreement between the IMF and government. The IMF indicates that it reached a Staff-Level Agreement with Cameroon on the Second Review of Resilience and Sustainability Facility and Seventh ECF and EFF as well as the second review of the RSF.

“The agreement is subject to approval by the IMF Executive Board. Completion of the reviews would enable disbursement under the ECF-EFF arrangements of SDR 55.2 million (US$ 73.0 million) and disbursement under the RSF arrangement of SDR 34.5 million (US$ 45.6 million),” the report detailed. 

While hailing the country’s economic recovery, Cemile Sancak in the report, stated that prospects are broadly positive, providing the enabling environment for reform implementation to continue and benign external conditions. 

It projected growth forecast unchanged at about 4 percent in 2024, gradually rising to about 4.5 percent over the medium term. It noted that inflation was expected to decline to 4.4 percent by the end of 2024 and gradually reach the CEMAC convergence criterion of 3 percent by 2026.

“The 2025 budget was adopted by Parliament in December and is consistent with the objectives set out under Cameroon’s IMF-supported programme and anchoring fiscal policy over the Presidential elections later in 2025. A key goal remains generating space for productive and social investment and advancing anticorruption reforms,” the inspectors stated.

IMF praised Cameroon for intensifying efforts under RSF to improve the climate policy framework. It noted that work is progressing on the reform measure to establish guidelines for evaluating investment projects with climate change considerations in mind, to improve disaster preparedness by revising the Civil Protection law and by updating the mandate of the National Risk Observatory. 

“The IMF and other development partners are providing technical assistance for a national climate plan, a national strategy for disaster risk financing, and strengthening governance and sustainability of the forestry sector,” the report detailed. 

The IMF team saluted Cameroonian authorities for their excellent cooperation and for the frank and constructive dialogue during the review. 

This article was first published in The Guardian Post Edition No:3359 of Tuesday February 04, 2025