To mitigate the impact of the pandemic, the government has taken several actions to contain the spread of the pandemic, increase health spending, strengthen existing social safety nets and provide support to affected businesses and households.

The financial package under the Rapid Credit Facility (RCF) of US $ 226 million is intended to support the authorities' efforts in addressing Cameroon's urgent balance of payment needs stemming from the COVID-19 pandemic and the terms of trade shocks from the sharp fall in oil prices, IMF said in a statement Monday.

The disbursement is equivalent to SDR 165.6 million (about US $ 226 million, 60 per cent of quota) to help Cameroon meet the urgent balance of payments needs stemming from the COVID-19 pandemic. The outbreak of the COVID-19 pandemic and the terms of trade shocks from the sharp fall in oil prices are having a significant impact on Cameroon's economy, leading to a historic fall of real GDP growth, said the IMF as it works to ensure the stability of the international monetary system.

The IMF notes that Cameroon authorities are taking several actions to contain the spread of the disease, boost health and social protection spending, and provide support to affected businesses and households.

However, due to a significant deterioration of the macroeconomic outlook and weakening of fiscal situation, driven by the drop of revenue in combination with additional direct health and social expenditures, urgent external and fiscal financing needs have emerged.

The IMF's support will help to fill immediate external needs and preserve fiscal space for essential COVID-19-related health expenditure. It is also expected to help catalyze additional donor support, read Monday's statement.

Following the Executive Board's discussion on Cameroon, Mr. Mitsuhiro Furusawa, Deputy Managing Director and Acting Chair, issued the following statement:

“Cameroon is facing serious challenges from the twin Covid-19 pandemic and terms of trade shocks. Weak global demand, depressed commodity prices, and domestic containment measures weigh on the outlook, and are causing significant adverse economic and social effects. The shocks have given rise to substantial fiscal pressures and an urgent balance of payments need.

“The authorities are taking decisive actions to limit the spread of the virus and its economic and social impact. They have implemented strong crisis containment and mitigation measures and are scaling up spending to bolster their health response. Additional measures currently under consideration will provide support to vulnerable households and firms.

“Given the sudden and pressing nature of the shocks, accommodative fiscal and monetary policies are warranted to mitigate the human and economic impact of the outbreak. However, the authorities remain committed to their reform agenda under the ECF arrangement. They plan to undertake adjustments to return to the fiscal consolidation path once the crisis abates to safeguard debt sustainability and ensure a strong recovery.

“IMF emergency financing under the RCF will support the government efforts to mitigate the impact of the twin shocks. Additional assistance from development partners will be critical to fill the remaining financing need. Strict budgetary controls and transparency will be needed to ensure that the assistance under the RCF meets its intended objectives. ”

The IMF also approved the authorities' request for an extension of the ECF arrangement, due to expire on June 25, 2020, to September 30, 2020 with a re-phasing of access.