Cameroon’s Treasury Bond interest rates surged from 2.67% in 2020 to 6.33% in 2024, marking a substantial increase. However, investor interest has declined, with funding demand coverage dropping drastically from 206.9% to 69%. This indicates a waning attraction towards Cameroon’s bonds, possibly due to their relatively low yields compared to market alternatives.
In a recent presentation of Cameroon’s financing program for the year held in Douala, Finance Minister Louis Paul Motazé disclosed that interest rates on the country’s Treasury Bonds (BTA) have witnessed a dramatic increase from 2020 to 2024. Specifically, the returns on these short-term securities escalated from 2.67% to 6.33%, exceeding a 100% rise. The bonds are utilized to address temporary cash flow shortages by raising necessary funds.
Alongside rising interest rates, the demand coverage rate for funding requested by the Cameroonian Treasury has significantly declined. Data presented by Motazé indicates that this coverage rate plummeted from 206.9% in 2020 to just 69% by 2024. Earlier, investors were willing to subscribe significantly more than required, whereas now, subscriptions barely meet half of the demand.
Cameroon’s Treasury Bond interest rates have markedly increased, yet investor interest has diminished sharply. Although the rates rose from 2.67% to 6.33%, the coverage rate for funding requests dropped from 206.9% to 69%, revealing a reduced appeal for investors in the bond market. This shift may suggest a caution regarding competitive rates in an environment where higher yields are available elsewhere.
Original Source: www.businessincameroon.com
