Moody’s Keeps Cameroon at Caa1 as Liquidity Risks Persist

BREAKING NEWSAugust 28, 2026 at 12:58 PM UTC

TLDR

Moody's maintains Cameroon's Caa1 credit rating and stable outlook after review, citing persistent liquidity risks and tighter regional financing conditions.
Cameroon faces challenges in refinancing debt as access to funding becomes more difficult, with financing needs estimated at 10% of GDP in 2026.
Weak revenue collection, exposure to state-owned companies, and governance issues contribute to Moody's decision, with a lowered growth forecast of 3.4% for 2026.

Moody’s kept Cameroon’s Caa1 credit rating and stable outlook unchanged after a periodic review, while warning that weak liquidity, payment arrears and tighter regional financing conditions remain key risks. The review followed an August 13 committee meeting and was completed on August 21.

Cameroon has continued to refinance maturing debt, but access to funding has become more difficult as the regional market reaches capacity. Moody’s estimates financing needs at about 10% of GDP in 2026, with roughly half secured by the end of June. The agency expects public debt to rise to 45% of GDP after the government assumes obligations linked to the national electricity company.

The rating is also constrained by weak revenue collection and exposure to state-owned companies. Moody’s said persistent liquidity pressure and gaps in public financial management have contributed to new payment arrears. It lowered Cameroon’s institutional strength and governance score to Caa1 from B3, citing weak performance on governance indicators, domestic arrears and delays in external debt payments.

Moody’s cut its 2026 growth forecast to 3.4% and expects the budget deficit to reach 2.5% of GDP, in part because higher oil prices have increased fuel subsidy costs. The economy remains dependent on hydrocarbons, while security spending and the financial position of some state-owned companies add pressure. Moody’s said agriculture, hydropower and mineral resources provide support, but many remain underdeveloped.

Political risk also weighs on the credit profile. Moody’s cited uncertainty around presidential succession, unrest in the Anglophone regions and insecurity in the Far North. The agency said better access to long-term financing, stronger growth and lower domestic arrears could support the rating, while weaker liquidity, higher debt or a disorderly political transition could lead to a downgrade.

Points clés à retenir

Cameroon’s Caa1 rating shows that the main pressure on the sovereign is not the size of its debt alone, but the government’s ability to raise cash and meet payments on time. Moody’s still sees public debt at a moderate 45% of GDP after the state absorbs obligations linked to the national electricity company. The problem is that financing needs are high, regional markets are crowded and more borrowing is being done on commercial terms. That raises refinancing costs and increases the risk of arrears when budget execution is delayed. The downgrade of the institutional strength and governance score to Caa1 from B3 adds another concern because it points to weaknesses in public financial management rather than a temporary funding squeeze. Growth of 3.4% in 2026 provides some support, but the 2.5% budget deficit, fuel subsidy costs and security spending limit room for adjustment. Cameroon therefore needs more than lower debt to improve its credit profile. It needs longer-term funding, stronger revenue collection and fewer domestic arrears. Political stability also matters because a disorderly transition or more security spending could weaken liquidity further. For investors, the key issue is whether Cameroon can keep refinancing debt without allowing payment pressures to build.

Cameroon