The Board of Directors of the African Development Bank (AfDB) has approved a loan of €150 million to start the second phase of Program to Support Competitiveness and Economic Growth in Cameroon (PACCE I) initiative.
This comprehensive reform program is a three-year budget support operation running from 2017 to 2019.
The PACCE I, since its approval in December 2017, had adopted a series of reform measures identified as pointers for the second phase.
PACCE II, which will run from November 2018 to December 2019, will continue to underpin the foundations for accelerated, resilient and inclusive economic growth, through improved public financial management, strengthened governance, and better governance. the competitiveness of productive sectors, including transport, electricity, energy, agriculture, and fisheries.
Several lessons were learned from the first phase; such as first, the quality of the ongoing dialogue between the Cameroonian government and the Bank ensured a good perception and acceptance of the reforms. In addition to this, the sequencing of the steps ensured the consolidation of the results obtained.
Finally, the Bank and development partners have worked closely together from the design stage and throughout the implementation of their operations, thus avoiding duplication between donors and minimizing transaction costs for the government.
Records from conclusive results on different levels showed that the growth rate has remained positive, at 3.2% in 2017 in a region where some countries have experienced a recession. The budget deficit, estimated at 6.7% in 2016, has been reduced to 5%. Inflation has been contained.
According to the Director of the Coordination Office of Governance and Public Financial Management within the African Development Bank; Abdoulaye Coulibaly, “The implementation of PACCE I has helped to advance Cameroon’s agenda as a whole. In fact, out of 14 key reform initiatives identified in PACCE I, ten have been fully implemented, three are in progress and only one reform action has yet to be completed,”.
He further stated that “For this second phase of PACCE II, the AfDB intends to bridge the gap with PACCE I, while consolidating the achievements already made “
Despite the security challenges facing Cameroon, the drastic drop in oil prices over the last four years and the fall in prices of other export products (cocoa and timber), the Cameroonian economy shows resilience to exogenous shocks.
Improving governance and the competitiveness of the productive sectors should, by reducing production costs, attract more private investment and stimulate growth to achieve the objectives of the Growth and Jobs Strategy Paper 2010-2020.
These developments should positively impact the subregion, Cameroon being the economic engine of the Economic and Monetary Community of Central Africa (CEMAC).
The PACCE is in line with the regional strategy defined in December 2016 by the CEMAC, advocating a sustained rebalancing of public finances, a return to sound monetary policy, and the launch of structural reforms to support economic diversification.
The Bank’s active portfolio in Cameroon comprises 23 projects, totaling commitments of more than 1.3 billion euros, or 875 billion CFA francs.
African Development Bank has also approved approximately €18 million for the first tranche of the Ring Road transport project, a ring road to promote socio-economic development in the north-west region.