Moody’s assigns B2 (speculative) first-time issuer rating to Cameroon, stable outlook

Moody’s Investors Service has assigned a first-time local and foreign-currency issuer ratings of B2 to the Government of Cameroon. This unprecedented decision was based on a number of key factors including moderate fiscal strength and moderate susceptibility to event risk. Cameroon’s rating is largely bolstered by its membership of the Central African Economic and Monetary Union (CEMAC) which affords the country a high degree of monetary policy credibility. Its membership serves to significantly alleviate the risk of balance of payment crises, as the CFA franc zone enjoys a full convertibility guarantee to the euro from the French Treasury at a fixed exchange rate. However, the low institutional strength of the country does give reason for pause. Other risks include sub-optimal governance as well as political succession risks.