Cameroon’s Eurobond yields hit record high after Fitch downgrade

The yield on Cameroon’s Eurobond maturing in 2033 surged nearly 30 basis points on Monday, October 19, reaching a record 10.65%. The yield on its 2031 bond rose 20 basis points to 10%. The increases marked the fourth consecutive trading session of rising yields, reflecting growing investor concern about the country’s creditworthiness.

The latest market pressure follows Fitch Ratings’ decision on Friday, October 16, to downgrade Cameroon’s sovereign credit rating from B to B-, with a stable outlook. The U.S. ratings agency cited two main factors: uncertainty over the succession of President Paul Biya and mounting pressure on government financing.

According to Fitch, uncertainty surrounding the succession of Biya, 93, raises the risk of a political transition that could undermine the country’s institutional and economic stability.

Government Financing Needs Rise Sharply

Beyond political uncertainty, Cameroon’s public finances are another source of concern. Fitch estimates that the country’s gross financing needs will reach 7.3% of gross domestic product (GDP) in 2026, up from 5% in 2025, before easing to 6.5% in 2027.

The absence of a new program with the International Monetary Fund (IMF), following the expiration of the previous arrangement in July 2025, has added to the pressure. Cameroon is increasingly reliant on external commercial borrowing, while financing options in the regional market of the Economic and Monetary Community of Central Africa (CEMAC) have become more limited. According to Fitch, banks’ exposure to sovereign debt across the region rose from 10% of their assets in 2015 to approximately 30% in 2025.

In early October, Cameroon’s Finance Ministry announced plans to raise an additional $300 million by reopening its 2033 Eurobond, which carries an 8.875% coupon. Rising yields in the secondary market now illustrate the potential increase in the cost of securing new financing.

Cameroon has approximately $1.7 billion in outstanding foreign-currency bonds across its 2031 and 2033 maturities. Since the beginning of October, the bonds have generated losses of nearly 3% for investors, making them the worst-performing African sovereign bonds over the period. By comparison, Bloomberg’s index of emerging-market dollar bonds gained more than 1%.

Fitch nevertheless noted that Cameroon’s public debt, estimated at 42.5% of GDP at the end of 2025, remains relatively low compared with similarly rated countries. For Cameroon, the immediate challenge is therefore less about the size of its debt than its ability to secure financing in a market where investors are demanding increasingly higher returns to compensate for risk.

Source: ecofin agency