African Development Bank and Cameroon Sign € 80.4 Million Loan Agreement for Phase III of Competitiveness and Economic Growth Support Program

AfDB NEWS & EVENTS

27-Dec-2019

The Minister of Economy, Planning and Regional Development, Governor of the African Development Bank Group for Cameroon, Alamine Ousmane Mey and the Country Manager of the African Development Bank in Cameroon, Solomane Kone , proceeded, on December 19, 2019 in Yaoundé, to the signing of a loan agreement for the financing of the third phase of the Support Program for Competitiveness and Economic Growth (PACCE III), in the presence of the Cameroonian Minister of Finance, Louis-Paul Motaze.

In the amount of 80.4 million euros, or approximately 52.74 billion FCFA, this approval supplements the previous agreements relating to phases I and II of the PACCE, signed in December 2017 and December 2018, for amounts of 180 million euros and 150 million euros respectively, bringing the cumulative amount of multi-year program budget support (2017, 2018 and 2019) of the Bank Group to Cameroon to 410.4 million euros (or approximately 269.2 billion of FCFA).

Cameroon signed on June 26, 2017, with the International Monetary Fund (IMF), a three-year agreement (2017-2020) under the Extended Credit Facility (ECF), for an amount of SDR 483 million under the Regional economic and financial reform program of the Economic and Monetary Community of Central Africa (PREF-CEMAC). The Bank participates in this Program alongside other institutions, notably the French Development Agency, the World Bank and the European Union.

PACCE III, denominated in euros, contributes, like its tranches I and II, to the reconstitution of foreign exchange reserves in the CEMAC zone and to the support of the parity of the CFA Franc.

This Agreement aims to pursue Cameroon's external and budgetary balance objectives through two main components: the rationalization of the public finance management (PFM) framework with a view to strengthening macroeconomic stability, creating budgetary margins, prioritizing projects for public investment and stimulating growth; and strengthening the governance and competitiveness of the productive sectors, notably transport, energy and agriculture.

Through this Program, Cameroon undertakes to implement structural reforms to consolidate the macro-budgetary framework, stimulate production and national and regional trade, as well as the private investments necessary for job creation, in particular for young people. PACCE III directly operationalizes three of the Bank's five priorities relating to energy, agriculture, and regional integration. It indirectly contributes to the other two High 5 priorities by stimulating the industry and improving the living conditions of the populations.

The signing of this Loan Agreement, as well as the approval on December 18, 2019 by the Bank's Board of Directors of the financing of the second tranche of the Ring road for an amount of 161.6 million euros, bring the Bank Group portfolio in Cameroon with 35 operations, for an amount of 2.63 billion euros.