Cameroon raises its debt ceiling for the second time this year

In order to meet its financing needs, the Cameroonian State must eventually go into a debt of close to 1700 billion Cfa francs this year. The head of the Cameroonian State signed 13 August 2015, an order "amending and supplementing certain provisions of the budget law of the Republic of Cameroon for the year 2015".

It allows "the Government to negotiate and, possibly, to conclude in the 2015 fiscal, concessional and non-concessionnal borrowing of 500 billion Cfa francs and 1 200 billion francs Cfa respectively".

This is the 2nd time since the beginning of the year that the Cameroon debt ceiling is raised. On February 6, 2015, Paul Biya signed an order of 900 billion Cfa francs (against 375 billion CFA francs in the initial budget), the amount of funding to be raised by the Government by issuance of Government securities on the capital market.

A decree signed on the same day also authorized Alamine Ousmane Mey, the Minister of finance to mandate two banks for the issuance of the first eurobond (750 billion CFA francs) in the history of the Cameroonian public finances for the financing of the triennial of the Government emergency plan, a total of more than 1000 billion CFA francs.

In the end, the debt ceiling of Cameroon for 2015 goes from 900 billion Cfa francs in February to 1700 billion Cfa francs in the month of August, an increase of over 90%.

This second revision to the Cameroon debt ceiling can be explained by the decision recently taken by the Government to fund the construction of Mbalam-Kribi railway and Pier railway of the Kribi deep sea port, for the development of the proposed operation of the railway from Mbalam to Nabeba.

These infrastructures match the funding from 1500 to 2000 billion CFA francs, mobilize mainly from China, we learn.

Furthermore, the new increase in the debt ceiling may incidentally be explained by the decline in oil revenues, which should officially cause losses of about 300 billion Cfa francs to the Treasury this year, despite the increase of tax-customs revenues in the first half of 2015.