S&P upgrades Cameroon

Standard & Poor's said it raised its long-term foreign- and local-currency sovereign credit ratings on the Republic of Cameroon to B- from CCC and affirmed the country's C short-term foreign- and local-currency ratings. The outlook is stable.

S&P said the upgrade reflects the country's arrival at the completion point under the Heavily Indebted Poor Countries initiative, which qualifies Cameroon for additional debt cancellation under the Multilateral Debt Relief Initiative. As a result, general government debt is expected to decrease to 37.7% of GDP at the end of 2006 from 56.0% at the end of 2005, reducing the debt servicing burden significantly.

The upgrade also reflects an improvement in the government's debt servicing record, notably with respect to domestic debt, and a commitment to improve the management of public finances, the agency said.

Nevertheless, S&P said the ratings on Cameroon are constrained by the low level of economic development, which remains depressed despite the country's natural resource endowment, with GDP per capita estimated at $1,048 in 2006.

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