Cameroon’s Finance Minister Louis Paul Motaze has defended the government’s slow pace in clearing domestic arrears, stressing that external debt obligations must take priority to safeguard the country’s financial credibility.
Speaking before lawmakers on November 18, Motaze said the government has “no room for postponement” on foreign debt, warning that any missed repayment could severely damage Cameroon’s standing with global lenders. He emphasized that defaulting would put the country on international blacklists, making future borrowing either impossible or available only under harsh conditions.
Motaze explained that the government’s strategy is driven by the need to maintain access to international credit markets. External lenders, including multilateral institutions, commercial creditors, and bilateral partners, are highly sensitive to repayment delays. A single missed installment, he noted, can trigger penalties, reduce creditworthiness, and increase borrowing costs for years.
Consequently, domestic suppliers, contractors, and local financial institutions waiting on arrears will continue to face delays. Motaze acknowledged rising frustration among local businesses but insisted the government is managing limited resources amid competing priorities.
The minister cautioned that 2026 will be “an extremely difficult year” for domestic debt repayments, as Cameroon begins reimbursing support previously received under its IMF-backed reform program.
Under the 2021–2025 IMF program, Cameroon accessed two financing instruments, the Extended Credit Facility (ECF) and the Extended Fund Facility (EFF), totaling 573 billion CFA francs. These funds strengthened the national budget, supported economic reforms, and helped stabilize public finances during post-pandemic recovery.
From 2026 onwards, Cameroon must start repaying those resources, adding new pressure on the budget and limiting flexibility for domestic creditors.
IMF program amplified budget stability, but repayment cycle begins
Cameroon’s IMF-supported program focused on fiscal consolidation, boosting non-oil revenue, restructuring state-owned enterprises, and improving governance. The ECF/EFF disbursements helped the government manage liquidity, finance essential public services, and stabilize the exchange rate environment.
But entering the repayment phase means the state must reallocate funds that would otherwise support domestic obligations; a shift Motaze says is unavoidable if Cameroon wants to remain credible abroad.
While prioritizing external debt shields Cameroon from international financial penalties, it intensifies pressure on the domestic market. Contractors owed arrears face cash flow shortages, stalled projects, and reduced capacity to bid for new contracts. Local banks exposed to government paper also face increased rollover risk.
Lawmakers have called for clearer schedules for domestic arrears clearance, but the minister maintained that the government will adjust payments as fiscal space improves.
