In an annual report published last week by the rating agency Moody’s,
“Cameroon’s public and external debt has increased significantly on the back of the mostly external financed public investment programme.’ said we Kevin Dalrymple Moody’s vice president and senior credit officer.
“This has exacerbated by the country’s below median revenue generation capacity, which weighs on debt affordability.”
The relative diversification of cameroon’s economy and natural gas reserves which plays a significant role in the countries credit profile is constrained by a weak institutional environment, rising public and external debt.
As the country battles with the decline of oil prices and its inability to diversify its economy and develop its natural gas reserves so as to compensate for the falling oil prices, Cameroon’s public and external debt has witnessed a drastic increase as a result of the country’s reliance on mostly externally financed public investment.
To add more to an already dire situation, the country’s median revenue generation is below capacity and this weighs on debt affordability.
Kevin Dalrymple further stipulated that domestic political risks such as succession risk and tension ahead of the legislative elections announced for February 2020 are some of the main driver events.
Image Credit: Moodys