Cameroon’s B-/B rating stays put: the political transition now takes centre stage
Standard & Poor’s (S&P) has confirmed Cameroon‘s sovereign credit rating at “B-/B” with a stable outlook. The decision, announced in mid-September, has triggered widespread reactions and opened a debate on what lies ahead. Far from being a mere technical endorsement, the verdict places the political transition in Yaoundé at the heart of market concerns. For investors and multilateral partners alike, the unchanged rating serves less as a seal of approval than as a cautionary note about the country’s future trajectory.
Rating upheld, but the warning is clear
By renewing the “B-/B” rating, S&P acknowledges the fiscal path followed by Yaoundé under its programme with the International Monetary Fund (IMF), while highlighting the structural fragility of Cameroon’s economy. The rating remains deep in speculative territory, five notches below investment grade, reflecting a repayment capacity seen as vulnerable to shocks. The agency’s analysts point to public debt that continues to weigh on revenues, as well as budget execution hampered by volatile hydrocarbon prices.
Beneath the apparent stability, S&P stresses political uncertainties that could derail the trajectory. The country is entering a sensitive electoral sequence, with the presidential election set to determine whether the regime in place for over four decades will endure. This context weighs on the risk premium demanded by markets, in a regional environment already marked by Sahel turbulence and tightening financing conditions for African issuers.
Presidential succession: the new risk premium
It is the question of transition at the top of state that crystallises attention. The US agency believes the outcome of the vote and, more broadly, the management of the post-Biya era will condition the country’s macroeconomic stability in the coming years. A controlled institutional handover would preserve the relationship with lenders, starting with the IMF, whose programme anchors structural reforms. Conversely, any political deadlock, post-election dispute or poorly prepared vacancy would expose Yaoundé to a brutal capital flight and a downgrade of its signature.
Cameroon, the largest economy in the Central African Economic and Monetary Community (CEMAC), plays a role as a regional anchor. Its signature directly influences the financing conditions of other issuers in the franc zone, from Gabon to the Republic of Congo. A sovereign downgrade for Cameroon would therefore have immediate contagion effects on the Bank of Central African States (BEAC) and on common foreign exchange reserves, already strained by member countries’ external refinancing needs.
Budget reforms and persistent vulnerabilities
On the macroeconomic front, S&P acknowledges efforts to rationalise fuel subsidies, broaden the tax base and contain the wage bill. These measures, imposed by the letter of intent signed with the IMF, have helped stabilise the budget deficit at levels deemed sustainable. However, non-oil revenue mobilisation remains weak, around 12 to 13 percent of gross domestic product, a ratio well below the standards of comparable economies.
Dependence on hydrocarbons also continues to weaken external balances. Cameroonian oil production is structurally declining, eroding export revenues at a time when import needs, particularly for food and energy, remain high. External debt service, estimated at several hundred billion CFA francs per year, absorbs a growing share of public resources, limiting fiscal room for long-term investments.
Technical and financial partners are also monitoring the effective implementation of IMF recommendations on governance of state-owned enterprises, particularly in the hydrocarbons and electricity sectors. The National Hydrocarbons Corporation (SNH) and Camair-Co are among the entities whose restructuring is key to the credibility of the announced fiscal trajectory through 2027.
What next? A signal to investors and lenders
For asset managers exposed to African debt, S&P’s message is twofold. The stable rating opens the door to new eurobond issues or private placements, if market conditions allow. But the explicit mention of political risk calls for caution, just weeks before a deadline whose outcome will redraw the political geography of the sub-region. Western diplomats and Gulf capitals, now very active in financing African infrastructure, are watching with equal attention.
The agency has expressly linked the stability of its outlook to the authorities’ ability to ensure an orderly transition, a prerequisite for maintaining access to international capital markets.