State Borrowing: Making The Loans Profitable!

There has been heated debate lately, especially on the social media, on Cameroon’s debt situation. The worth or not of government’s borrowing was once again sparked by the Head of State’s January 21, 2026 decree, “Authorizing the Minister of Finance to resort to domestic and external borrowings for the respective amounts of CFAF 400 billion, CFAF 250 billion, and CFAF 1000 billion, to finance development projects and clear outstanding payments.”
In fact, Cameroon is not an exception when it comes to borrowing so as to oil the State’s functional and development machinery. No country in the world has ever developed without borrowing. More so, in situations where internal resources are largely insufficient to develop growth-induced infrastructure and other economy stimulants. To say the least, government’s borrowing is crucial for economic development as it facilitates the financing of critical infrastructure projects and fund public services when fiscal revenue is insufficient. Cameroonians cannot be oblivious to the fact that by investing in roads, education and healthcare perhaps, the borrowed funds boost long-term output and then, economic growth.
And indeed, it is said that the resources mobilised from the fresh targeted government borrowing should be used to finance priority infrastructure projects designed to lift Cameroon’s development in various areas (electricity, health, road infrastructure, etc.). It couldn’t be otherwise owing to the fact that in an increasingly challenging global and national economic climate, government cannot solely rely on fiscal revenue. For, the customs and tax revenues are generally far below State’s exigencies. The more reason why hopes are high that the funds raised from yet another State borrowing should logically enable the government to finance its economy and enhance socio-economic growth legitimately needed by citizens. 
That the Head of State’s decree came after the technical launch of the State budget for the 2026 financial year could therefore be perceived as determination to walk political talk. Especially taking off a new Presidential term of office in which much has been promised the population by the powers that be and so expectations are rife. It remains to be seen how well the money will be used for the good of the present and future generations who absolutely need to break away from under-development usually masterminded by poor governance. 
Apologists of the State borrowing hold that Cameroon is far below the sub-regional threshold which is fixed at 70 per cent of Gross Domestic Product (GDP). Cameroon’s debts are said to be hovering around 40 to 45 per cent of her GDP, signalling what could still be a comfortable 30 per cent margin, everything being equal. This holds true when the borrower takes into consideration the loan dogma of “borrowing wisely and paying promptly.” 
They hold tight to their point of view owing to the pronouncement of the Directorate General of the Budget who is quoted to have said that public debt management will once again be a significant item of expenditure this year, with interest payments estimated at 532.5 billion CFA francs. The repayment of the principal of the public debt is scheduled at 1,890.6 billion, of which 1,041.6 billion is earmarked for domestic debt. From a cursory view, this volume of repayments highlights the desire to control the debt stock. However, repeated outcry of economic operators about delays in settling domestic debt speaks of mounting problems that must not be ignored. The same pressure logically exists for rather growing external debts.
This is where the shoe pinches. Those who fear the rate of indebtedness are in no way sarcastic. They may just be visionary, ringing an alarm bell to avoid the population’s suffering in the medium and long terms when the time for repayment comes. And what even animated the debate on the new State borrowing was the later part ...