The country’s institutions will not make any significant jump while its fiscal and external deficits will persist.

Standards and Poor’s 2015 Africa outlook, published on May 31, 2015, has avowed its “B/B” long and short-term sovereign credit ratings on Cameroon. The country’s outlook, according to the credit rating agency, remains stable. It however reflects on the company’s expectations that, over the next 12 months, Cameroon’s institutions will not improve substantially, and that fiscal and external deficits will persist - albeit with continued monetary stability and continued low, although rising government and external debt.  In its view, the country’s creditworthiness is inhibited by feeble institutions, low per capita income and large external financial needs. The report remarks that the country however, has modest, notwithstanding rising government debt and lower inflation and exchange rate risk, thanks to its membership to the Central African Economic and Monetary Community, CEMAC, whose currency is pegged on the euro.

Its perceived increase in corruption, the enforcement of contracts as well as the weak respect for the rule of law are also attributable to the country’s steady institutional, fiscal and external deficits. Risk from the Boko Haram terrorist group in northern Cameroon despite recent military successes against them, remains serious, going by Standards and Poor’s. In spite of this, the American financial services company predicts a real Gross Domestic Growth of average 5.6 per cent in 2015-2018. Government, according to the report, expects oil output to decrease to 65,000 barrels per day in 2018 from about 92,000 barrels per day this year.

“Cameroon long-term credit rating is “B”, meaning that the level of our sovereign risk is highly speculative for long-term transactions,” notes Babissakana, Chairman and Chief Executive Officer of Prescriptor Ltd. The sound Economist explains that the long-term credit rating for the Federal Republic of Germany is “AAA” meaning the lowest level of risk possible and equivalent to no risk, compared to the “B” rating of Cameroon which does not augur well for growth. Babissakana hints that the long-term credit rating is evaluated on a forward looking perspective, and the anticipated country’s economic growth is a key factor to consider. “For long-term ratings, based on numbers available, Standards & Poor’s has forecasted the real GDP growth at an average of 5.6 per cent in 2015-2018,” however, he concludes that; “This independent rating agency is that, weedy institutions and governance, the large external and fiscal deficits, the low income per capita are critical constraints or negative factors reflected on the Cameroon credit ratings.”