Yaoundé spent CFA311bn on interest payments for central government debt in 2024 ⁰

 In 2024, Cameroon’s public treasury spent a total of CFA1.38 trillion repaying central government debt. According to the national sinking fund (CAA), the agency managing the country’s public debt, CFA311.4 billion of this amount was used to cover interest payments, including CFA58.8 billion for domestic debt.

Although the CAA highlights that Cameroon benefits from “favorable borrowing conditions,” with an average debt cost of 3.2% at the end of 2024, interest expenses continue to weigh on public finances, limiting funds available for development projects.

To put this in perspective, the interest payments made in 2024 were 2.5 times higher than the CFA126.4 billion the government expects to raise in 2025 through the new local taxation law to fund municipalities. They also represent nearly a quarter of the CFA1.14 trillion the African Development Bank (AfDB) has invested in Cameroon’s transport infrastructure. Additionally, this amount is almost double the CFA164 billion in private-sector investments claimed by the International Finance Corporation (IFC), a World Bank subsidiary. The IFC plans to expand its investment portfolio in Cameroon to CFA300 billion over the next three years, which is still CFA11 billion less than what the government paid in interest alone in 2024.

The growing interest burden on Cameroon’s central government debt is largely due to the country’s increased reliance on non-concessional loans in recent years. In 2024, only 35.9% of new financial commitments were concessional loans, while 64.1% came from non-concessional sources, according to the CAA.

Non-concessional loans, which often consist of commercial debt, include borrowing from financial markets and private institutions that typically charge higher interest rates. While these loans provide more flexibility in securing funds, they also come at a higher cost. This makes strict financial management essential to limit interest expenses and ensure long-term budget stability, the CAA warns.

Source: Business in Cameroon