Director General of Treasury, Moh Sylvester
Cameroon is in dire need of funding for its development projects in 2025.
The Director General of the Treasury at the Ministry of Finance Sylvester Moh disclosed last week government’s new strategy to widen the pool of investors in Cameroon’s public debt market.
As the country’s debt burden increases with a surge in treasury bond interest rates, many investors are declining their interest to engage in any activity.
During a presentation of the state’s financing program for the year in Douala, Cameroon’s Finance Minister revealed that the interest rates paid by the country on its Treasury Bonds (BTA) have significantly increased from 2020 to 2024.
Louis Paul Motazé explained that the returns on these short-term securities, which are used to raise funds for managing temporary cash flow shortages, have risen from 2.67% in 2020 to 6.33% in 2024. This represents a more than 100% increase.
However,along with the rise in interest rates, the coverage rate for the funding demand expressed by the Cameroonian Treasury has also dropped over the same period. According to the data shared by Motazé, this coverage rate fell from 206.9% in 2020 to just 69% in 2024.
In other words, while in 2020 investors were generally offering up to three times the amount Cameroon requested, allowing the country to pick and choose among the offers, now the total subscriptions from the same investors only cover just over half of the funding demand. This decline indicates a decrease in the attractiveness of Cameroon’s issued bonds.
Motazé did not provide specific reasons for the drop in investor interest in Cameroonian bonds. However, experts say this could be linked to Cameroon’s cautious approach to interest rates on the public bond market. Although the rates have increased, they remain the lowest on the market, which may not appeal to investors who are increasingly drawn to higher-yielding investments.
He emphasized the need to engage a broader range of economic players, including insurance companies, small savers, and unbanked populations, in funding the state’s development projects.
Speaking during a thematic discussion on “Mobilizing Local Savings to Finance Development Projects in Cameroon,” Moh highlighted a growing challenge faced by the Cemac region’s public treasuries. Over the years, these countries have struggled to raise funds on the regional public debt market, as banks now hold nearly 80% of the issued public debt. Once a major source of financing for Cemac countries since its inception in 2011, this market is now showing signs of saturation.
As a result, the tightening of market conditions and the sluggishness of the secondary market have made it more difficult to attract new investors, particularly those outside the banking sector.
“We are increasingly seeing the cost of financing our public debt rise, along with a reduction in the average maturity of sovereign bonds. Our banking system, though resilient and dynamic, has reached its limits in terms of commitment to Cameroonian sovereign bonds. The concentration of debt in bank balance sheets is a structural issue. We need to diversify our investor base,” Moh explained.
To address these challenges, the government plans to rely more heavily on institutional investors, such as insurance companies and pension funds, particularly the National Social Security Fund (CNPS).
“Insurance companies are key institutional investors with significant resources and a long-term vision. However, in Cameroon, their participation in sovereign financing is still below its optimal potential. It’s time to remove the obstacles that hinder their involvement. We need to encourage the creation of financial products that are better suited to their needs, offering attractive returns and debt instruments compatible with insurers’ prudential requirements,” Moh said.
Another part of Cameroon’s strategy involves modernizing the subscription process for government bonds. This includes digitalizing subscriptions to open the door for participation from the diaspora and unbanked populations. The growing use of Mobile Money and offerings from fintech companies in the country present opportunities for this digital shift.
“If we want to democratize investment in public debt, we need to break down the barriers to access for individual savers. In a world where financial transactions are increasingly done through digital platforms and mobile apps, it is essential that our bond market adapts. Why shouldn’t an average citizen be able to subscribe to a government bond as easily as they make a mobile payment?” asked Sylvester Moh.
