By Ben Nakomo and Sirri Alette Ngwa
The government of Cameroon has embarked on an operation to raise the sum of 50 billion francs CFA (about 120 Million USD) through the sale of treasury bonds. The proceed from the sale is expected to finance the first phase of major projects earmarked for the 2012 budgetary year. The operation was launched during a meeting that brought together the Minister of Finance and officials of accredited banks in Cameroon, the Central African Republic and Gabon. The latest sale of treasury bonds by the government of Cameroon follows on the sales of 250 billion Francs CFA (about 600 million US dollars) almost a year ago. This was over subscribed, and the sale was over within seven business days beating the expectations of government officials.
The sale of treasury bonds in developing countries such as Cameroon is rare, and the surprisingly good reception from the domestic market with the bonds finding eager enthusiastic buyers from local businesses and individuals, is an indication on the optimism on Cameroon’s economy by its burgeoning domestic market. According to some money market analysts, the strong auction was a booster on the prestige of Cameroon, whose recent economic resurgence in the Central African sub-region has enabled it to largely dictate how the region will cope with the global financial crisis and foreign pressures on the management of the regional economy.
During the launch of the recent sales, the Director General of the National Treasury indicated that the government treasury has a reserve of over 350 billion francs CFA. He stated that the sale of treasury bonds is part of government’s effort to encourage private investment and economic growth.
Commercial banks have been charged with the sales of the treasury bonds each costing one million francs. The process began on Thursday, November 17, 2011.
Some investors expect a higher yield, or interest rates, on the Cameroon bonds — being priced at an average yield of 5.00 percent. The enthusiasm of buyers indicate the worth of the bonds and the opportunity for Cameroonians to loan their government, refinance the national treasury for the realization of planned infrastructure projects.
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