CI-NEWS

Treasury DG boasts about Cameroon’s ‘credible signature’ after June’s overwhelming subscription to g

2019-06-25

No: 433

Treasury DG boasts about Cameroon’s ‘credible signature’ after June’s overwhelming subscription to gov’t bonds.

Cameroon may be going through multiple security challenges, but the country still has the confidence of the money market and international financiers. In recognition of the country’s ‘credible signature’, there was an overwhelming subscription to this month’s bond issue. The state had gone to the money market for the second installment of bond issue to raise 150 billion FCFA, but got more than what it expected. The banks and other financiers subscribed to as much as 174.6 billion FCFA in the bond issue of 12 June, representing over 120% success rate.

Speaking to the press last Thursday in Yaounde, Moh Sylvester Tanghongo, Director General of the Treasury, Financial and Monetary Cooperation (DGTFMC), attributed the surplus to Cameroon’s ‘credible signature’ with international financiers.

He said the attractive interest rates of 4%, 4.85% and 5.8% for bond issues spanning 3,4 and 5 years, was an added motivation for financiers.

What is more, the state has honoured its financial commitments to financiers since it went to the money market in 2010. It has respected the reimbursement timetable set, Moh Sylvester boasted.

The treasury DG said the surplus money would be used to finance more investment projects like government’s emergency programme (PLANUT), infrastructure projects for the hosting of the 2021 African Cup of Nations (AfCON), hydro-electricity projects, especially in the domain of transportation; and construction of roads in Yaounde and Douala.

The additional resources, he said, would also permit the state to catch up with delays in the payment of contractors.

The Treasury DG announced a third bond issue by the end of the year to make up for the additional resources imposed by the revised 2019 Finance law. Instead of the initial 260 billion expected, the amount to be raised from the money market has been increased to 350 billion FCFA as per the modified Finance Law which led to a hike in the 2019 state budget.

On the unexecuted projects in the Anglophone regions as a result of security challenges, Moh Sylvester assured that the money was reserved to be used for investment projects in the North West and South West when normalcy returned.

The journalists also raised concerns about guarantees in the use of funds mobilized in the wake of the endemic corruption and mismanagement of funds in the country. To this, Moh Sylvester replied that parliamentary oversight had reduced the phenomenon to its minimum. In addition, the state was dealing with financial specialists who are sure the money borrowed would be used for the purpose intended and could seek the intervention of international instances if they sensed any mismanagement.

On the state’s capacity to reimburse the borrowed funds, given the high rate of indebtedness of the country, the treasury DG went defensive. Cameroon’s rate of indebtedness which stood at less than 35% of its GDP was below the 70?iling required for CEMAC economies. He said the state still had reserves to the tune of over 1100 billion FCFA to which it could fall back on in periods of emergency.

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Treasury DG boasts about Cameroon’s ‘credible signature’ after June’s overwhelming subscription to g