Home News Cameroon seeks 70 billion to finance its budget.

Cameroon seeks 70 billion to finance its budget.

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The government issued its second issue of assimilable treasury bonds (OTA) on the BEAC money market for a three-year maturity and 4% interest yesterday April 14.

In accordance with the decree of the Head of State empowering the Minister of Finance, Louis Paul Motaze, to issue public securities for an amount of 320 billion FCFA, the government has just launched its second issue in Assimilable Treasury Bonds (OTA) for a amount of 70 billion for a three-year maturity and 4% interest. It is repayable after five years with an interest rate of 5.7%.

For the account of the 2020 financial year, the Head of State authorized the government to use issues of public securities for a maximum amount of CFAF 350 billion. To this end, the President of the Republic, on March 18, 2020, empowered the Minister of Finance to use the issuance of Treasury bonds for an amount of FCFA 220 billion, to finance development projects entered in the budget of the state. Among other things, this involves improving the living conditions of the populations. Four main areas are targeted. These are the development and rehabilitation of roads (63.2 billion), water and energy (38.3 billion). Operations are planned in three phases. The first was held on April 8, 2020 for an amount of 50 billion FCFA for a two-year maturity. The country obtained 71 billion FCFA instead of the 50 billion requested, ie a coverage rate of 150%. Repayments begin in 2022 with 3.5% interest rate. The third OTA issue will be used to raise 100 billion FCFA for a 5-year maturity.

This is the second major operation that the Treasury will attempt to carry out on the money market. Indeed, between May and June 2019, the Cameroonian government had already managed to mobilize more than 150 billion FCFA thanks to three OTA issues, thus favoring the money market to a bond loan on the financial market. According to the Directorate General of the Treasury, of financial and monetary cooperation, the use of issues of public securities in particular, assimilated treasury bonds, first finds its foundation in the annual finance law. “The money market offers more flexibility. The securities issued are redeemed in fine, therefore at the end of their maturity. For a five-year maturity, for example, the State does not reimburse the principal until the end of the fifth year, which leaves the State a little more time to carry out the projects for which these resources are mobilized before ” consider reimbursement. Likewise, the investor receives annual interest on the capital over the entire term, “explains Treasury Director Moh Sylvester Tan-gongho. Out of a requirement of 3,440 billion FCFA, the country will have to cover 1,217 billion during the current financial year, both externally and internally.

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