Moody's Ratings has completed its periodic review of Cameroon's sovereign rating, affirming the Caa1 rating with a stable outlook.
On August 21, the agency also flagged three converging vulnerabilities — public debt, market liquidity and domestic arrears — that will shape the state's ability to keep refinancing on regional markets.
The apparent stability of the rating masks structural weaknesses weighing on the credit profile, warning that any further deterioration in liquidity could undermine the state's capacity to fully honor its obligations, Moody's report added.
It estimates Cameroon's 2026 gross financing needs at around 10% of GDP, about half of which had been raised by end-June, mainly through commercial instruments, pushing up the average cost of debt.
Moody's expects public debt to hover around 45% of GDP once the state fully takes over the obligations of the national electricity company, placing Cameroon in a relatively high leverage zone for a Caa1-rated issuer.
The IMF's 2026 Article IV consultation puts public debt at 43.4% of GDP at end-2024 and concludes that Cameroon remains at high risk of debt distress despite an upgrade of its debt-carrying capacity to medium, with two of four external debt indicators still breaching thresholds. Debt servicing is projected to rise from 7.0% of GDP in 2025 to 8.8% in 2026.
Moody's notes that saturation on the regional market is making refinancing more difficult, even though Cameroon can still roll over maturing obligations. The persistence of arrears heightens credit risk, undermines suppliers' trust in the state and limits the effectiveness of fiscal policy.
Among potential positive drivers, Moody's lists stronger-than-expected growth, a durable improvement in fiscal indicators, broader diversification of funding sources and a measurable reduction in domestic arrears.
It also argues that greater use of longer-maturity bonds on regional markets would help reduce refinancing risk, provided the sovereign can maintain sufficient access to regional investors. These expectations align with the IMF's call to strengthen revenue mobilization, contain quasi-sovereign risks and preserve debt sustainability.
For investors, the stabilized rating should help prevent a sharp widening of risk premia on new issues, while attention stays fixed on the concentration of maturities beyond 2026.
