Cameroon to Expand Public Debt Market

February 18, 2025

(3 Minutes Read)

Cameroon unveiled a new strategy to widen the pool of investors in its public debt market. The Director General of the Cameroon Treasury Sylvester Moh emphasised the need to engage a broader range of economic players, including insurance companies, small savers, and unbanked populations, in funding the state’s developmental projects.

DG 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.

Cameroon increasingly sees the cost of financing its public debt rise, along with a reduction in the average maturity of sovereign bonds. The 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. The country needs to diversify its investor base. 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. The country needs 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.

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 Cameroon wants to democratise investment in public debt, it needs 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, the bond market must adapt. Why shouldn’t an average citizen be able to subscribe to a government bond as easily as they make a mobile payment? asks Sylvester Moh.