CAMEROON

RISK RATING
High
Default High Risk Score 7.00
Normal Average 5.65
Weighted Average 5.23
RISK RATING HISTORY
RISK RATING SCALE

Risk Rating Scale

Severe: 8.0 to 10
High: 6.0 to 7.9
Elevated: 4.0 to 5.9
Moderate: 2.0 to 3.9
Low: 0.0 to 1.9
EXCHANGE RATE
Country Outlook

President Paul Biya continues to cling to power despite a deteriorating economic outlook and secessionist insurgencies in Anglophone regions. Vast swathes of Cameroon’s northern and western regions are turning into a permanent conflict theatre, as there is no indication of the anglophone insurgency abating. Meanwhile, a concurrent Islamist insurgency is becoming more deeply entrenched. As counter-insurgency tactics fail, Cameroon risks stumbling into a drawn-out civil war, especially once the president’s eventual departure triggers fresh political instability. While the administration of long-time President Biya continues to face international pressure to address its democratic shortcomings, Cameroon’s economic outlook is more severe than initially anticipated due to oil price volatility and the impact of the pandemic.

  • The lack of a clear succession plan remains the main underlying threat to political stability. President Paul Biya was re-elected in 2018, extending his then 36-year rule, despite claims from two leading opposition candidates that the vote was fraudulent. The re-election of Biya has ensured political consistency and a continuation of the policy agenda. His administration has been commended for implementing sound fiscal policies. The relative outward stability is a result of the length of Paul Biya‚Äôs presidency, which masks an underdeveloped political system that would struggle to maintain stability in the event of a sudden departure of the aging president. Should the president leave his position by resignation, death, or permanent incapacity, the president of the Senate becomes interim head of state until an election, to be held within 40 days, after which the country faces a near-certain political vacuum which raises the risk of military intervention.
  • The Anglophone crisis has settled into a full civil conflict, while Islamist attacks intensify in the Far North. Separatist militants in the Anglophone Northwest and Southwest regions are increasingly staging general strikes, while also attacking military and commercial assets. Meanwhile, attacks by Boko Haram in the Far North have continued at an elevated frequency. Cameroon‚Äôs political and security situation is already taking its toll on the country‚Äôs economy. The SNH national oil and gas company previously declared force majeure in two areas in Cameroon ‚Äď Bakassi in the Southwest and Zina-Makary in the Far North ‚Äď because of insecurity from separatists and Boko Haram. Beyond hydrocarbons and construction, the agricultural sector has probably been the most impacted by the crisis.
  • Cameroon‚Äôs economy faces significant pressure because of the pandemic and oil price volatility. The IMF notes that the COVID-19 pandemic has had a more severe negative impact on economic activity than originally anticipated, while a recovery is projected to occur more gradually than previously forecast. Total emergency IMF support to Cameroon reached USD 382 million in 2020. Such economic pressures have also exacerbated Cameroon‚Äôs debt situation, although Cameroon benefited from the G-20 debt service suspension initiative to suspend debt payments. Debt restructuring has also extended repayment timelines for some USD 222 million in Chinese and French loans. Cameroon seeks to extend this initiative given its weak economic outlook that renders it at high risk of debt distress.
CUMULATIVE AND DAILY COVID-19 INFECTIONS AND DEATH RATE
INTERNATIONAL MONETARY FUND | DATAMAPPER
Risk Perils
Political Instability
5.0
Expropriation, Nationalisation, Confiscation & Deprivation
4.0
Contract Frustration & Breach
6.0
Taxation
5.0
Bribery & Corruption
7.0
Regulatory Burden
6.0
Strikes, Riots & Civil Commotion
5.0
Security
6.5
Sovereign Default
6.0
Economic Volatiliy
6.0

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