The International Monetary Fund approved a $226M ( € 2.1M) loan to help Cameroon combat the coronavirus as the country faces plunging oil revenues. It was the latest disbursement under its Rapid Credit Facility (RCF), which is aimed at the world’s poorest nations and has been doubled in size to quickly dispense aid to those most vulnerable to the economic effects of shutdowns to contain the outbreak. 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 authorities in Cameroon 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 said in a statement that the outbreak of the coronavirus pandemic and the terms of trade shocks from the sharp fall in oil prices are having a significant impact on Cameroon’s economy and it is leading to a historic fall of real GDP growth.
Cameron had recently hit 2,000 cases of people infected with the novel coronavirus and the country has moved to combat the virus but the IMF funds would assist to fill immediate external needs and preserve fiscal space for essential coronavirus related health expenditure. This effort can also push other donors to not only donate to Cameroon but other countries in Africa that need immediate assistance.
“IMF emergency financing under the RCF will support the government’s efforts to mitigate the impact of the twin shocks,” he said, while calling for “strict budgetary control and transparency” if the credit line is to be successful.