The International Monetary Fund has, in its regional economic outlook report, projected a dismal economic performance for Cameroon in 2009.

The report, launched in Yaounde on October 24 by the Minister Delegate in the Ministry of Finance in charge of the Budget, Pierre Titi, in the presence of IMF officials, projects that in 2009; Cameroon would record an unenviable 0.5 percent in its trade balance dropping from 3.3 percent this year.

Another drop, according to the report, would be witnessed in the export of goods and services as the figure for 2009 would be 25.0 percent down from 28.3 in 2008.Meanwhile, the importation of goods and services in 2009 will be 27.6 percent thus, orchestrating a deficit in the balance of trade.

The report also projects the percentage of the overall fiscal balance (without grants) at 0.0 percent in 2009, down from 1.2 percent in 2008.The overall balance plus grants in 2009 is 0.9 percent, a fall from the 2.2 percent in 2008. Government revenue without grants is projected at 18.9 percent, a drop of 0.7 from 2008, while expenditure would be 19.0 percent, a rise from the 18.4 percent in 2008.

Also, the percentage of the Gross Domestic Product (GDP) to be reserved for domestic savings is projected at 16.7 percent, witnessing a 1.7-percent drop from what was projected in 2008.

From this projection, Cameroon falls far behind a country like Equatorial Guinea whose domestic savings for the same period is projected at 69.7 percent.Countries such as Lesotho, Burundi, Comoros, Eritrea, The Gambia, Guinea Bissau and Sao Tome and Principe will all register negative percentages of domestic savings from GDP.

The report projects total investment of GDP for Cameroon at 19.2 percent while that of Seychelles stands at 59.3 percent. Eritrea is the least in this domain with 10.7 percent.

Real per capita growth for Cameroon in 2009 would be 1.7 percent, an insignificant increase of 0.7 percent from the 2008 projection.

Angola will witness the highest in terms of investments accruing from GDP with 9.5 percent while Comoros and Eritrea will register negative figures. For non-oil GDP growth, Cameroon will register 5.0 percent, a rise of 0.4 from the 2008 projection. Equatorial Guinea will be the first sub-Saharan African country with 26.0 percent.

The report generally indicates that the world inflation is high driven by surges in commodity prices, meaning that ordinary Cameroonians and households would continue to feel the pinch as more money would continue to fetch fewer goods in the markets.

The immediate policy challenge, the report indicates, is for countries to stabilise financial conditions while nursing the economy through a slow activity that could keep inflation under control.

Recommendations To African Gov'ts

Meanwhile, the IMF Deputy Director of African Department, Benedict Vibe Christensen, emphasised that growth in sub-Saharan Africa, estimated at 6 percent, even in the face of the financial crisis, is one of the highest, with Cameroon registering 4.3 percent.

She recommended that countries should maintain a stable macro-economic policy in order to keep inflation at bay.

"High inflation is bad for the poor and the development of the financial sector. Hardly any region has grown without the development of the financial sector. Obstacles to businesses should be removed. Moves towards a better enabling business environment, which includes better infrastructure such as roads, rail and port facilities are crucial in the promotion of trade and growth in the economy," the report recommends.

In the face of the rather bleak economic projections for Cameroon, Titi said some of the issues raised in the report are being taken care of in the 2009 budget to be submitted to the National Assembly for examination soon.

In his appraisal of the report, the President of the Board of Directors of the Cameroon Cooperative Credit Union League, CAMCCUL, Musa Shey Nfor, noted that the projected 2 percent decline in growth warrants different recovery measures.

He said the report seems silent on clear links between legal and judicial environment especially as the shocks of the world financial crisis has an incidence on the credit granting mechanisms and difficulties of refund in the banking sector.

Shey Nfor said surplus liquidity with insufficient financing of the economy and apparently weak global legal frameworks makes the credit recovery system too heavy thus, giving the people the liberty to owe banks.

Challenge For Micro-Finance

Musa observed that the challenge for micro-finance institutions in the face of the crisis is a decrease in growth and an increase in inflation because banks are discouraged to lend without adequate recovery mechanisms.

"Borrowing can, therefore, set the banking sector into difficulty when the legal environment does not preview punitive measures to recover loans. It is this irrational lending that plunged the whole financial sector into difficulty in the US. A strong legal and judicial framework for the financial sector is a solution to the crisis," he stated.