OREANDA-NEWS. The African Development Bank (AfDB), approved on July 9th 2015 a EUR 500 million partial credit guarantee to cover the payment obligations of the Republic of Cameroon  related to the cross currency swaps executed with commercial banks to hedge the proceeds of a USD denominated Eurobond currently being marketed.  

Cameroon will be tapping into the international capital markets to finance development projects, in particular its Three Year Emergency Plan and certain long-term investment projects identified in the 2015 budget. These development projects, are aligned with the AfDB’s overarching Ten Year Strategic goals (2013-2022) namely, to promote inclusive growth and support the transition to green growth and will impact two operational priority sectors for the Bank: infrastructure and the private sector of the Bank, , as well as the Bank’s High Five Agenda to light, feed, industrialize, integrate and improve living standards in African countries.

The Bank’s involvement is intended to help mitigate currency risk that could arise from Cameroon’s ongoing international capital markets operation, while contributing to the reduction of the interest bill paid by Cameroon. The transaction is also perfectly aligned to the Bank’s Financial Sector Development Policy & Strategy 2014-2019.

Cameroon’s government gross debt to nominal GDP ratio is estimated to be at 19.3% as of end 2014, well below the Central African Economic and Monetary Community (CEMAC) 70% threshold and the level of external indebtedness remains low compared to the average of Sub-Saharan Africa and the CEMAC region.