By maintaining Cameroon’s rating at B, the American rating agency announces good economic prospects for the country with a reduction in public debt, as well as a drop in inflation to 5%.
In its recent publication a few days ago, Fitch Ratings confirmed Cameroon’s “B” rating. This rating, which represents the 2nd level of the “highly speculative” category, i.e. 6 levels above payment default (D), was maintained on the basis of the positive factors projected by Cameroon, notes Fitch. In particular, that “ the country’s growth will remain resilient due to the relative diversification of the economy and the projects implemented within the framework of the National Development Strategy. Continued progress in mobilizing non-oil revenues and controlling expenditure, due to financing constraints, maintaining a moderate level of public debt compared to its peers “. This, even if GDP per capita remains low, with weak governance indicators.
Overall, Fitch Ratings provides a good outlook for Cameroon. According to the US agency’s forecasts, non-hydrocarbon revenues will continue to improve thanks to administrative revenue measures, the digitalization of processes and the gradual elimination of tax exemptions. Financing conditions will force investments to contain the deficit. Fitch also forecasts a reduction in public debt. “ We forecast that general public debt, including guarantees, arrears and SONARA debt (2.6% of GDP) is expected to decrease to 39.5% in 2025 from 44.7% of GDP at end-2022 (in below the median “B” forecast of 53.9%), due to robust economic growth and moderate budget deficits For Fitch, Cameroon will experience resilient economic growth. According to its forecasts, real GDP growth will increase to 3.8% in 2023, after 3.6% in 2022 to strengthen to 4.1% in 2024 and 4.4% in 2025. As for inflation, it could fall again next year. The booms observed were driven by food prices (10% year-on-year) and transport prices which soared to 16.7% year-on-year driven by the increase in the retail price of fuel in February, explains Fitch. But after 6.2% in 2022, “ we forecast inflation to average 7.2% in 2023, before decreasing to 5.0% in 2024 and 3.3% in 2025,” reassures the agency.
However, Fitch draws Cameroon’s attention to factors that could lead to a negative rating. It lists in particular a new accumulation of external arrears and/or worsening external budgetary and financial pressures, security threats, especially if they significantly affect public finances or disrupt economic activity.
