IMF approves poverty reduction loan

The executive board of the International Monetary Fund (IMF) on Wednesday granted a disbursement of about US $21 million to Cameroon to help support poverty eradication efforts. The announcement followed the board's completion of a third review of the country's performance under the three-year Poverty Reduction and Growth Facility (PRGF) arrangement, according to an IMF press release. "During the last five years, the Cameroonian economy has benefited from improved macro-economic performance and the progress made in implementing key structural reforms," said Anne Krueger, First Deputy Managing Director and Acting Chairwoman of the board. "Looking ahead, however, Cameroon will need to achieve much higher real Gross Domestic Product growth rates on a sustained basis, in order to reduce poverty substantially," she said. With a revenue outlook weakened by declining oil output, the key challenge facing Cameroon will be to allocate more resources for key social sectors and investment in basic infrastructure, while maintaining an overall fiscal position that is consistent with macroeconomic stability, Krueger added. The IMF's conclusion of its review, and a waiver it granted for the country's non-observance of a structural performance criterion, means Cameroon will be able to draw about US$21 million under the PRGF facility. Such loans carry an annual interest rate of 0.5 percent and are repayable over 10 years with a 66-month grace period on principal payments. The PRGF is the IMF's concessional facility for low income countries and it is intended that the programmes funded should, in time, be based on country-owned poverty reduction strategies. These strategies, in turn, are supposed to be adopted in a participatory process involving civil society and development partners, and articulated in a national poverty reduction strategy. In a separate development, the Belgian government has cancelled Cameroon's debts amounting to about US $62.8 million and rescheduled another US $15.5 million for a period of 40 y ears, Cameroon Radio Television (CRTV) reported on Tuesday. An agreement to this affect, devised under the Paris Club framework, was signed by the Belgian Ambassador to Cameroon Jean Debri and Cameroon's Finance Minister Michel Meva'a Meboutou, it added.