Cameroon to boost privitization with IMF support

Reuters
Oct 26, 2005

Cameroon to boost privatisation with IMF support
Wed Oct 26, 2005 8:28 AM GMT

By Pascal Fletcher

DAKAR (Reuters) - Cameroon plans to privatise its state airline, water utility and telecommunications company as part of an IMF-backed economic reform programme aimed at obtaining debt relief next year, Economy and Finance Minister Polycarpe Abah Abah said on Tuesday.

He said a government programme to privatise and restructure state companies would be accelerated following approval by the International Monetary Fund on Monday of a three-year $26.8 million loan facility for the West African country.

Abah said the latest Poverty Reduction and Growth Facility for Cameroon would help it complete economic reform goals to become eligible in the first half of next year for debt relief offered under the IMF and World Bank's Heavily Indebted Poor Countries (HIPC) Initiative.

"We have a portfolio of companies that are going to be privatised," the minister told reporters in a telephone conference call from Yaounde.

The privatisation tender for Cameroon Airlines, the state flag carrier, was due to be launched by January 31, 2006.

The privatisation process for CamTel, the state telecoms company, would be started by end-June, 2006 and for the state water utility, Societe Nationale Des Eaux, by July 31, 2006, Abah said.

He declined to give a value for the companies involved.

There were also plans to restructure other state companies as part of a medium-term government programme aimed at boosting growth and reducing poverty.

If Cameroon qualified for the multi-lateral HIPC debt cancellation initiative next year, this would sharply reduce its net public external debt burden from a projected 153 percent of exports at the end of 2005 to 54 percent at the end of 2006.

In approving the loan facility for Cameroon on Monday, the IMF said the government's "prudent policies" had helped to achieve solid economic growth, low inflation and a narrowing current account deficit.

"Cameroon's macroeconomic performance through 2004 was solid with real growth registering about 4 percent and inflation remaining low," the fund said in a statement.

But it also urged the government of President Paul Biya to complete an unfinished reform agenda by improving governance, control of spending and the business climate.

Abah said Biya had ordered the government to wage a "war without mercy" against corruption, including rooting out dishonest or "phantom" civil servants who received salaries and payments they were not entitled to.

He also hoped the latest IMF facility lasting to June 30 2008 would allow Cameroon to gain access to more loans and cooperation from the international community.

"Beyond the IMF support, Cameroon should be able to regain credibility to benefit from greater assistance from other development partners," he said.

Besides producing some oil -- about 89,000 barrels per day in 2004 -- Cameroon exports cocoa, coffee and cotton.

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