Cameroon’s Financial Sector Commendable, But Lacking in Human Resources and Supervision

YAOUNDE, Cameroon - A Report from the International Monetary Fund (IMF) and World Bank Highlights Key Challenges

Despite making commendable efforts to develop a robust financial sector, Cameroon’s banking system still faces significant challenges. The main concerns are related to human resources and supervision at the country’s central bank, COBAC.

Human Resources and Supervision: A Major Concern

According to the report, COBAC is largely compliant with international standards for banking regulation and supervision. However, the lack of sufficient human resources hinders its ability to effectively supervise the banking sector. The limited staff at COBAC makes it difficult to conduct regular on-site inspections and monitor banks’ activities.

Microfinance Institutions: A Need for Strengthened Regulation

The report also highlights the absence of a real licensing procedure for microfinance institutions. While COBAC has introduced a registration process, it is deemed superficial and needs to be further strengthened.

Prudential Regulations: Room for Improvement

Cameroon’s prudential regulations and requirements are less stringent than international standards, particularly with regards to capital requirements, risk concentration, and internal controls. However, COBAC has announced plans to review these regulations and strengthen them in line with international best practices.

Supervision Approach: Recommendations for Improvement

The report recommends that COBAC rely more heavily on external auditors to supplement its own supervisory efforts. It also suggests that the bank intensify its relations with the boards of directors of banks to foster a stronger corporate governance culture.

Conclusion and Recommendations

In conclusion, while Cameroon’s financial sector has made significant progress, there are still several challenges to be addressed. The report recommends several steps to improve the banking sector, including:

• Increasing transparency and accountability through public reporting requirements
• Strengthening supervision and regulation
• Enhancing cross-border cooperation with other countries in the region

Overall, with continued efforts to strengthen human resources, supervision, and regulation, Cameroon can continue to move towards a more stable and robust banking system.