Cameroon sovereign rating cut to B- as Fitch flags political and financing risks

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Cameroon rating cut by Fitch

Highlights

Fitch downgraded Cameroon’s sovereign rating to B-, citing intensified political succession risk and mounting external borrowing needs amid CEMAC market constraints.
Fitch projects Cameroon’s gross financing needs will rise to 7.3% of GDP in 2026 and 6.5% in 2027, with no new IMF program assumed.
Despite downgrade, Fitch expects Cameroon’s fiscal deficit to ease to about 1.8% of GDP by 2028 and government debt to fall to 39.1% of GDP.

Downgrade drivers and financing outlook

As reported by Fitch Ratings, the downgrade reflects increased risks of a disorderly transition of power and greater financing pressure as Cameroon relies more heavily on external commercial borrowing amid tighter conditions in the Central African Economic and Monetary Community, or CEMAC, market.

Fitch says uncertainty around presidential succession has intensified since it assigned a negative outlook in November 2023. President Paul Biya, 93, won an eighth term in the October 2025 election and has not designated a clear successor, while the vice-president role created in the April 2026 constitutional reform remains vacant.

The ratings agency also points to weak governance, limited policy continuity and a fractured socio-political environment. It says Cameroon is officially classified as a fragile and conflict-affected state by both the IMF and the World Bank.

On financing, Fitch projects gross financing needs at 7.3% of GDP in 2026 and 6.5% in 2027, up from 5% in 2025. It does not assume a new IMF programme over its forecast horizon and says political uncertainty could complicate compliance with any future arrangement.

Fitch adds that the regional CEMAC market has become a more difficult source of funding as banks' sovereign exposure has risen and demand for government bonds has weakened. Banking sector exposure to sovereigns climbed from 10% of total assets in 2015 to about 30% in 2025, while secondary market depth remains limited.

Fiscal position, growth and rating sensitivities

Despite the downgrade, Fitch says Cameroon's B- rating is supported by relatively narrow fiscal deficits, declining government debt and solid economic growth. It forecasts a fiscal deficit on a commitment basis of 2.2% of GDP in 2026, versus 2.1% in 2025, with deficits easing to about 1.8% through 2028 as fuel prices decline and non-oil revenue improves.

Real GDP growth is expected at 3.7% in 2026 and 2027, strengthening to 4.1% in 2028, driven by investment in power generation and mining. Inflation is expected to average 3% in 2026, with Fitch saying fuel subsidies moderate the impact of the war in Iran.

Government debt is projected to fall to 39.1% of GDP in 2028 from 42.5% at end-2025, remaining below the B-rated median of 56%. Fitch says its debt metrics include arrears older than three months, floating debt and SONARA debt.

The agency expects the current account deficit to widen to 5% of GDP in 2026, mainly because of a sharp fall in cocoa prices. Even so, it forecasts CEMAC pooled reserves will rise to 4.7 months of imports in 2026 from 4.1 months in 2025, supported by stronger crude export receipts across the monetary union.

Fitch says further negative rating action could follow if political instability, insecurity or financing stress materially worsens public finances or market access. A more orderly presidential succession, improved governance and easier access to concessional or regional financing could support an upgrade.

Our earlier coverage on sovereign resilience in a higher-rate environment explained how persistent geopolitical tensions and elevated fiscal spending can raise borrowing and refinancing risks as funding costs stay high. It also noted that emerging and frontier markets are often hit harder because interest-service burdens tend to be high relative to narrower revenue bases, while energy and food price shocks add to inflation and fiscal pressure.

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