The floating debt in Cameroon has ballooned to nearly $1.8 billion by the end of the first quarter of 2026, highlighting a persistent structural imbalance between the government’s commitments and actual payments made by the Treasury. This growing stock of arrears includes all invoices settled or pending beyond regulatory deadlines, primarily owed to domestic suppliers, service providers, and creditors. In Yaoundé, this figure has reignited discussions about budget execution efficiency and the government’s fiscal maneuvering room amid tightening external financing conditions.
Floating debt: a budgetary adjustment tool with heavy consequences
While floating debt is not a new phenomenon in Cameroon, its current scale underscores a worsening trend. At $1.8 billion, it represents a substantial portion of annual public expenditures, excluding debt service and salaries. Essentially, the state delays payments to preserve its cash flow, effectively shifting the burden onto the domestic private sector. This practice, common in the CEMAC region, functions as a form of forced financing from local suppliers.
The ripple effects on creditor businesses—often small and medium-sized enterprises—are severe. Payment delays cascade down the supply chain, disrupting contractors’ cash flows, hindering their ability to meet bank obligations, and straining payroll systems. Cameroonian banks, which lend to state suppliers, face a corresponding rise in non-performing loans within their portfolios. The Bank of Central African States (BEAC) and the regional banking commission are closely monitoring this interconnected risk between public finances and financial institutions.
A red flag for financial partners
The release of this staggering figure coincides with ongoing negotiations between Cameroon and the International Monetary Fund for the continuation of its reform program, as well as frequent issuance of sovereign bonds on the BEAC market. Floating debt is a key metric scrutinized by multilateral lenders, alongside official public debt figures. Its accumulation signals weaknesses in the expenditure chain—from commitment to payment—and fuels criticism of fiscal governance.
Past efforts to clear arrears have yielded mixed results. The residual stock, far from shrinking, tends to rebuild quarter after quarter. The World Bank and the IMF have long advocated for structural reforms, including systematic audits of arrears, stricter controls on off-budget commitments, and modernization of the integrated public finance management system.
Real-world impacts on the economy and public procurement
Beyond macroeconomic stability, floating debt hampers public procurement. Businesses, wary of delayed payments, factor in a risk premium when submitting bids, driving up the cost of government contracts. Some opt out of tenders altogether, reducing competition and service quality. Instead of stimulating growth, public spending ends up exerting a drag on the national productive sector.
The construction sector, a major creditor to the state for infrastructure projects, bears the brunt. Delays in road projects, stalled equipment works, and mounting legal disputes before administrative courts compound the financial strain. Healthcare and education providers are also affected by overdue payments, disrupting supply chains and service delivery.
The path forward remains uncertain. The Cameroonian government has pledged to bring arrears under control in line with regional and international commitments. However, 2026’s economic climate—marked by modest growth and underperforming tax revenues—complicates the task. Without deep reforms to the spending chain, floating debt risks persisting as a chronic indicator of fiscal vulnerability in Central Africa’s largest economy.
