The African Development Bank Group’s Board of Directors has approved a loan of €180 million to the Republic of Cameroon to finance the first phase of the government’s Competitiveness and Economic Growth Support Programme (PACCE).
PACCE is the first of a three-year programmatic general budget support operations to be implemented from 2017 to 2019 in order to shore up public finances in the wake of dwindling oil prices exasperated by security and related humanitarian challenges within the country and across the CEMAC region.
“The program aims at preserving macroeconomic and budgetary stability and contributing to laying the foundations for robust, resilient and inclusive economic growth by improving the public finance management framework and strengthening the governance and competitiveness of productive sectors (transport, energy and agriculture),” Ousmane Dore, Director General of the Bank’s Central Africa Hub said while presenting the project to the Board.
The reform package of this operation is organised around two interdependent and complementary components: (i) streamlining the public finance management framework; and (ii) strengthening the governance and competitiveness of productive sectors. Both components are expected to help streamline the public the finance management framework, reinforce macroeconomic stability, create fiscal space, as well as prioritize public investment projects and stimulate growth.
Furthermore, the program’s focus on enhancement of governance and competitiveness of productive sectors is expected to reduce production costs, particularly in transport and electricity. This will help attract private investments and stimulate growth through the development of agro-industry and fiscal consolidation measures.
Leveraging funding for agriculture, electricity and transport sectors will significantly accomplish the Bank’s High 5 prioritiesincluding the improvement of the quality of life of the population. The programme is aligned with the two pillars of the 2015-2020 Country Strategy Paper with regards to strengthening infrastructure for inclusive and sustainable growth; and strengthening sector governance to ensure the efficiency and sustainability of transformative investment programs. It is aligned with the Bank’s 2013-2017 Private Sector Development Strategy, among others.
In approving the program, Board members were convinced that providing support to Cameroon, the economic giant of Central African Economic and Monetary Union (CEMAC) zone, PACCE will impact the entire sub-region, which is perfectly in line with the strategy defined in December 2016 by the Heads of State of CEMAC member countries and the managers of regional institutions. The overarching objective for the region is to achieve: (i) sustained public finance re-adjustment; (ii) restoration of sound monetary policy; and (iii) launching of major structural reforms to support economic diversification.