A protocol agreement to suspend Cameroons’ debt servicing to France for a period of one year, was signed on December 18, 2020, between the government of Cameroon represented by the Minister of Finance Louis Paul Motaze and French ambassador to Cameroon Christophe Guilhou in the presence of the Minister of Economic Planning and Regional Development, Alamine Ousmane Mey.
The Paris Club Members through the initiative of Member Countries of G20 allowed a period of grace from May-December 2020, which, will extend to the first Semester of 2021.
The signing of this agreement to suspend the debt servicing is as a result of the financial challenges caused by the Corona virus (COVID-19) pandemic which has brought most countries economy at their knees with Cameroon inclusive, thereby rendering their financial commitment in a negative trend. According to the Minister of Finance, COVID-19 has triggered a drop in economic growth from 4,1 % to 2,1 % resulting to the reallocation of spending to finance COVID-19 thereby causing a drop in revenue of 15 %. This created a budget deficit of FCFA 512 billion (2,15%) of GDP to FCFA 986,6 billion (- 4,5%). Simultaneously, the need for State financing increased from FCFA 1 304,5 billion to FCFA 1 816 billion, an increase of 39 %. Hence, the necessity to review certain financial engagement with foreign partners in order to sustain the economy.
According to Ambassador Christophe Guilhou, France has assisted Cameroon a lot through accords and co-operation projects amounting to over FCFA 90 billion which requires repayment. But due to the negative economic situation imposed by COVID-19 pandemic, France has decided to suspend the debt servicing. This protocol agreement comes at the heel of five bilateral conventions already signed with Germany (KFN and Hermes), Eximbank China, Koweit and Spain amounting to FCFA 119,95 billion. The total amount to be rescheduled to all partners of G20 is FCFA 123,1 billion, which FCFA 92,49 billion, about 76 % comes from Countries of the European Union. These amounts will be spread within the period 2021-2024 with a year of grace.
By Narius AYUK AKO
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