S&P holds Cameroon at B-/B, warning that political succession is now the main risk

Standard & Poor’s has kept Cameroon’s sovereign rating at “B-/B” with a stable outlook, a decision that puts the political transition in Yaoundé at the centre of market concerns. The verdict, made public in mid-September, comes at a pivotal moment when the presidential succession — long considered taboo — has become a central variable in assessing the country’s risk profile. For investors and multilateral partners alike, the reaffirmation reads less as a vote of confidence than as a cautionary signal.

A rating renewed, but a warning barely concealed

By maintaining the “B-/B” rating, S&P endorses the fiscal path pursued by Yaoundé under its programme with the International Monetary Fund, while stressing the structural fragility of the Cameroonian economy. The rating remains deep in speculative territory, five notches below investment grade, reflecting a repayment capacity deemed vulnerable to shocks. The agency’s analysts point in particular to public debt that continues to weigh on revenues, as well as budget execution disrupted by volatile hydrocarbon prices.

Behind the apparent stability, S&P insists on political uncertainties that could derail the trajectory. The country is entering a sensitive electoral sequence, with the presidential poll set to determine whether the regime in place for more than four decades will extend its longevity. This context weighs on the risk premium demanded by markets, in a regional environment already marked by Sahel turbulence and tighter financing conditions for African issuers.

The presidential succession, a new risk premium

It is the question of transition at the top of the state that crystallises attention. The US agency believes the outcome of the vote and, more broadly, the management of the post-Biya era will shape the country’s macroeconomic stability in the coming years. A controlled institutional sequence would preserve the relationship with donors, starting with the IMF, whose programme anchors structural reforms. Conversely, any political deadlock, post-election dispute or poorly prepared vacancy would expose Yaoundé to a brutal capital withdrawal and a downgrade of its credit signature.

Cameroon, the largest economy in the Central African Economic and Monetary Community (CEMAC), plays a role as a regional anchor. Its signature directly influences the financing conditions of other issuers in the franc zone, from Gabon to the Republic of Congo. A sovereign downgrade would therefore have immediate contagion effects on the Bank of Central African States (BEAC) and on common foreign exchange reserves, already strained by member countries’ external refinancing needs.

Budget reforms and persistent vulnerabilities

On the macroeconomic front, S&P highlights efforts to rationalise fuel subsidies, broaden the tax base and contain the wage bill. These measures, required by the letter of intent signed with the IMF, have helped stabilise the budget deficit at levels deemed sustainable. Yet non-oil revenue mobilisation remains weak, at around 12 to 13% of gross domestic product, a ratio well below the standards of comparable economies.

Dependence on hydrocarbons also continues to weaken external balances. Cameroonian oil production is structurally declining, eroding export revenues at a time when import needs, particularly for food and energy, remain high. External debt service, estimated at several hundred billion CFA francs per year, absorbs a growing share of public resources, limiting fiscal space for long-term investment.

Technical and financial partners are also monitoring the effective implementation of IMF recommendations on the governance of state-owned enterprises, particularly in the hydrocarbons and electricity sectors. The National Hydrocarbons Corporation (SNH) and Camair-Co are among the entities whose restructuring conditions the credibility of the budget trajectory announced for 2027.

A signal sent to investors and donors

For asset managers exposed to African debt, S&P’s message is twofold. The stability of the rating opens the door to new eurobond issues or private placements, if market conditions allow. But the explicit mention of political risk invites caution, just weeks before a deadline whose outcome will redraw the geography of power in the sub-region. Western diplomats and Gulf capitals, now highly active in financing African infrastructure, are watching with equal attention.

The agency has expressly linked the stability of its outlook to the authorities’ ability to ensure an orderly transition, a sine qua non for maintaining access to international capital markets.

Further reading

Ecobank Cameroon posts 22.5 billion CFA francs profit at end-August · BCEAO denies fake video targeting governor Jean-Claude Brou · BEAC pushes to revive IMF programmes in CEMAC

By Claire Mvondo — Security and State Policy Expert