Cameroon is banking on a fresh financial arrangement with the International Monetary Fund (IMF) to plug a critical gap in its 2027 budget. The Ministry of Finance’s medium-term economic and budget programming document for 2027-2029, submitted to Parliament during the budget orientation debate, projects FCFA 300 billion in concessional funding from a new IMF program. This amount accounts for nearly 9.5% of the projected financing needs for 2027, which total FCFA 3,161.5 billion.
The stakes could not be higher. The previous IMF program, signed in 2021 and extended by one year, concluded in July 2025. Since then, Finance Minister Louis Paul Motazé has consistently advocated for a new agreement, as emphasized during the cabinet meeting on October 30, 2025. While the final decision to formally initiate negotiations rests with the Presidency, the inclusion of this funding in the three-year framework signals that the government is treating it as its primary scenario.
Financing gap hinges on IMF support
Cameroon’s projected budget deficit for 2027 stands at FCFA 1,018 billion, up from an expected FCFA 808.5 billion in 2026. Nearly 30% of this deficit—FCFA 300 billion—would be covered by IMF-backed financing if an agreement is reached. Additional obligations include FCFA 2,143.5 billion for debt servicing and treasury management, primarily driven by debt repayments and the clearance of arrears. Of this, FCFA 1,602.5 billion is earmarked for financial debt repayment alone.
To meet these obligations, the government plans to draw FCFA 866.7 billion from project loans, issue FCFA 400 billion in government securities, secure FCFA 250 billion in direct bank financing, and utilize FCFA 131.5 billion from its reserves at the Bank of Central African States (BEAC). A key component is a planned external borrowing of FCFA 1,000 billion, mirroring a similar issuance planned for 2026. The medium-term document explicitly labels the absence of an IMF deal as a “major risk” to the sustainability of public finances over the coming years.
Without an IMF program, the Treasury would need to fill the FCFA 300 billion shortfall through additional borrowing, increased domestic revenue mobilization, or spending cuts. However, the Ministry of Finance has highlighted the challenges of substituting concessional financing with commercial debt, citing rising domestic borrowing costs, high interest rates, and the still-nascent depth of the CEMAC financial market. These constraints make it difficult to replace IMF-backed funds seamlessly.
IMF deal could unlock broader funding
A successful IMF program would not only provide direct financial support but also act as a catalyst for funding from other major partners. The World Bank, African Development Bank (AfDB), European Union, and bilateral donors often tie their assistance to reforms and macroeconomic targets agreed upon within the context of an IMF program.
Between 2017 and 2025, Cameroon leveraged two IMF programs to secure approximately FCFA 2,600 billion in budget support, combining IMF disbursements with associated funds from other partners. Minister Motazé cautioned that failure to secure a new agreement would mean losing this critical source of financing. In parallel, Cameroon is working to broaden its non-oil tax base, modernize revenue collection agencies, and streamline current expenditures to prioritize investment.
A regional hurdle in Yaoundé’s path
Cameroon’s efforts are not isolated; they are part of a broader regional dynamic within the Economic and Monetary Community of Central Africa (CEMAC). For any national IMF program to advance, CEMAC-wide assurances are required on monetary policy, foreign exchange reserve rebuilding, and alignment of fiscal trajectories across the six member states.
The review of CEMAC’s common policies, originally slated for December 2025, has been postponed. Authorities attribute the delay to insufficient alignment of national fiscal policies with regional strategies and incomplete agreements on reform-linked assurances. While this regional validation is essential, it does not guarantee a bilateral deal between Cameroon and the IMF.
The timing remains a critical factor. By embedding FCFA 300 billion in conditional IMF support into its 2027 financing plan, Cameroon is tying a portion of its fiscal credibility to the outcome of negotiations. Any prolonged delay would force the government to rely more heavily on commercial borrowing or reduce spending, potentially undermining its investment-driven growth ambitions.
