Announcement of Cameroon’s Adjustment Program Gets Under Way on June 15, 1989

FOR IMMEDIATE RELEASE World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. *Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 89/89 Contact: Richard Kollodge (202) 477-4507 CAMEROON'S ADJUSTMENT PROGRAM GETS UNDER WAY WASHINGTON, June 15, 1989 -- Cameroon is moving ahead with a structural adjustment program that is expected to revitalize its once vibrant economy. The World Bank is supporting the program with a $150 million loan. Throughout the 1970s, Cameroon, an oil-exporting nation, recorded high economic growth rates. But when oil prices fell in the mid-1980s and the prices of the country's major export crops plunged, Cameroon's economy lapsed into recession. The adjustment program is designed to revive Cameroon's economy through changes in the country's banking, public-enterprise and agricultural sectors. The changes are expected to result in more efficient use of scarce public funds, growth in parts of the economy that are not directly tied to the oil industry, and a greater role for the private sector. Specifically, the program includes measures to improve the government's financial management, liquidate or privatize 22 public enterprises, and overhaul the country's banking system to make it more competitive and market-oriented. The program also covers setting up a more streamlined marketing system for Cameroon's main export crops--coffee and cocoa--to stimulate agricultural production, deregulating domestic trade to encourage growth of the private sector, and improving incentives for petroleum exploration and production. Special attention will be given to maintaining key social services in education and health care. Other measures will be taken to help ensure that the living standards of the poor do not fall further during the adjustment process. The World Bank loan is for 17 years, including five years of grace, with a variable interest rate, currently 7.65 percent, linked to the cost of the Bank's borrowings. It also carries an annual commitment charge of 0.75 percent on the undisbursed balance. Note: Money figures are in U.S. dollar equivalents.