Moody’s Keeps Cameroon At CAA1 As Liquidity Risks PersistAA

**Moody’s Maintains Cameroon’s Caa1 Sovereign Rating, Citing Ongoing Liquidity Risks**

*August 21, 2026 – Moody’s Investors Service*

Moody’s Investors Service confirmed on August 21 that Cameroon’s sovereign credit rating remains at **Caa1** with a **stable outlook** following its periodic review. The agency’s assessment, based on a committee meeting held on August 13, highlighted persistent weaknesses in liquidity, payment arrears and increasingly constrained regional financing conditions.

### Key Findings

– **Financing Needs:** Moody’s projects Cameroon’s financing requirements to reach roughly **10 % of GDP in 2026**. About half of this amount had been secured by the end of June 2026.
– **Public Debt:** The agency expects public debt to rise to **45 % of GDP** after the government assumes obligations linked to the national electricity company.
– **Revenue and Governance:** Weak revenue collection and exposure to state‑owned enterprises were identified as factors limiting the rating. Moody’s lowered the country’s institutional strength and governance score from **B3 to Caa1**, citing domestic arrears, delays in external debt payments and poor performance on governance indicators.
– **Growth and Fiscal Outlook:** Moody’s cut its 2026 growth forecast to **3.4 %**, and projects the budget deficit to reach **2.5 % of GDP**, partly driven by higher fuel‑subsidy costs following rising oil prices.
– **Sectoral Outlook:** While agriculture, hydropower and mineral resources were noted as potential sources of support, the agency described many of these sectors as “under‑developed.”
– **Political Risks:** Uncertainty surrounding the presidential succession, unrest in the Anglophone regions and insecurity in the Far North were flagged as additional risks to the credit profile.

### Rating Rationale

Moody’s emphasized that the primary pressure on Cameroon’s sovereign rating is not the absolute level of debt but the government’s ability to generate cash and meet payment obligations on time. The agency warned that the regional market is approaching capacity, making new financing more costly and increasing the risk of arrears when budget execution is delayed.

### Outlook for the Rating

Moody’s indicated that improvements in long‑term financing access, stronger economic growth and a reduction in domestic arrears could support the current rating. Conversely, deteriorating liquidity, higher debt levels or a disorderly political transition could trigger a downgrade.

### Implications for Investors

The agency’s assessment underscores the importance of monitoring Cameroon’s ability to refinance existing debt without accumulating additional payment pressures. Investors are advised to consider the country’s liquidity position, fiscal management and political stability when evaluating sovereign exposure.

Article source: allafrica.com | Image credit: MSA Securities