Cameroun: floating debt nears $1.8 billion in early 2026 amid budget strain

The floating debt in Cameroon has ballooned to nearly $1.8 billion by the close of the first quarter of 2026, spotlighting a chronic mismatch between the country’s financial commitments and actual payments made by the Treasury. This growing pile of domestic arrears encompasses unpaid or overdue bills owed primarily to local suppliers, contractors, and service providers. In Yaoundé, the revelation has reignited concerns over budget execution quality and the government’s fiscal maneuverability amid tightening external financing conditions.

Floating debt as a budgetary balancing act

While Cameroon’s floating debt is not a new phenomenon, its current magnitude underscores a deepening crisis. At $1.8 billion, it now represents a substantial portion of annual public expenditure, excluding debt servicing and civil service salaries. Essentially, the state is deferring payments to maintain cash flow stability, effectively shifting the burden onto the domestic private sector. This approach, though common within the CEMAC region, functions as an indirect form of financing through local suppliers.

Small and medium-sized enterprises (SMEs) are the first to feel the strain. Delayed payments ripple through supply chains, disrupting cash flows, credit repayments, and payroll obligations. Cameroonian banks, which finance many of these suppliers, face rising non-performing loans as a direct consequence. The Bank of Central African States (Banque des États de l’Afrique Centrale, or BeAC) and the regional banking commission are closely monitoring this interconnected risk between public finance and private sector balance sheets.

A red flag for international lenders

The timing of this debt surge is particularly sensitive, as Cameroon is in active negotiations to extend its International Monetary Fund (IMF) program and continues to tap regional capital markets through BeAC-issued sovereign bonds. Multilateral partners closely scrutinize floating debt as a key indicator of fiscal governance. Its persistent rise signals weaknesses in the spending chain—from budgetary allocation to actual payment—reinforcing concerns about the government’s financial discipline.

Past attempts to clear arrears have yielded mixed results. Rather than shrinking, the stock of unpaid bills has repeatedly resurfaced, quarter after quarter. The World Bank and IMF have long advocated for structural reforms, including mandatory audits of arrears, stricter controls on off-budget commitments, and upgrades to the integrated public financial management system.

Real economy hit by delayed public payments

The consequences of floating debt extend far beyond macroeconomic indicators. It stifles public procurement by forcing businesses to factor payment delays into their bids, driving up project costs and discouraging participation. Some firms withdraw from tenders altogether, reducing competition and undermining service quality. Instead of stimulating the national economy, public spending becomes a source of instability for local industries.

The construction sector—one of the largest creditors to the state in infrastructure projects—bears the brunt. Delays in road projects, stalled equipment rollouts, and a surge in administrative lawsuits highlight the broader costs of unpaid bills. Healthcare and education providers also face disruptions in procurement, further straining service delivery.

Looking ahead, the government has pledged to reduce arrears to levels aligned with regional fiscal rules. However, the 2026 outlook paints a challenging picture: modest growth and underperforming tax revenues complicate the path to stabilization. Without deeper reforms in expenditure management, floating debt may remain a persistent symptom of Cameroon’s fiscal fragility—the largest economy in the CEMAC zone.