• Cameroon authorized $1.039B in external borrowing from international private lenders to fund projects and clear arrears.
• The financing is part of a $1.67B package for 2025, split between commercial banks, private placements, and domestic markets.
• Heavy reliance on costly commercial debt raises refinancing risks as maturities cluster over the next three to five years.

Cameroon has authorized its Finance Minister to raise up to $1.039 billion (580 billion CFA francs) from international lenders, underscoring the government’s reliance on commercial financing to stabilize its fiscal position. The authorization, set out in Presidential Decree No. 2025/409 signed August 18 by President Paul Biya, allows borrowing from both private financial institutions and global commercial banks. The funds form part of a broader plan to mobilize nearly 980 billion CFA francs in new debt this year, aimed at clearing arrears and financing development projects.

The financing strategy includes 250 billion CFA francs in private placements with financial institutions and 330 billion CFA francs through loans from international banks. The remainder of the package—350 billion CFA francs in Treasury securities and 250 billion CFA francs in loans from domestic private entities—will be raised on the local market to limit currency exposure.

The borrowing plan is driven by mounting fiscal pressures. In July 2025, Cameroon revised its budget upward to 7,735.9 billion CFA francs, from 7,317.7 billion initially, to accommodate rising debt service obligations, energy subsidies, security outlays, and spending linked to climate-related disruptions. With revenues underperforming and a deficit of about 1.5% of GDP, the government faces little choice but to turn to external lenders. The arrangement remains consistent with its IMF-supported programs, which encourage fiscal reforms but allow new debt for productive investment. Without such financing, Cameroon risks a buildup of arrears already estimated at more than 1,000 billion CFA francs annually.

The move reflects broader trends in Africa, where sovereigns increasingly turn to commercial bank loans as Eurobond markets remain prohibitively expensive. With yields for sub-Saharan African issuers often above 10%, syndicated loans have become the default option for governments like Côte d’Ivoire, Angola, and Ghana. Across the continent, external debt now exceeds $1.3 trillion, with private creditors accounting for as much as 40% of outstanding obligations, compared with just 20% in 2010.

Cameroon’s debt profile mirrors this evolution. Public debt stood at around 43–46% of GDP by mid-2025, split between multilateral creditors, bilateral partners, and an expanding share of private commercial debt. Private borrowings account for roughly 15–18% of the total, anchored by deals such as the $550 million Citi-led syndicated loan in 2024 at 10.75%, a €152 million Natixis trade facility, and the government’s outstanding $750 million Eurobond from 2021 at 5.95%. With a significant share of this debt denominated in dollars and euros, and about a quarter tied to variable rates, Cameroon remains highly exposed to global monetary policy shifts.

While the new authorization provides critical liquidity to sustain growth projects and prevent arrears from worsening, it highlights Cameroon’s growing dependence on costly commercial debt. Maturities over the next three to five years pose refinancing risks that could intensify unless domestic revenue mobilization improves and expenditure pressures ease. For now, as for many African peers, international banks have become the lenders of last resort, keeping governments afloat at a steep price.

Idriss Linge