People stand on a street in Garoua, Cameroon, October 30, 2025. REUTERS/Desire Danga Essigue

By Amindeh Blaise Atabong

YAOUNDE (Reuters) -Cameroon expects its 2026 budget deficit to more than double due to a sharp rise in spending aimed at supporting economic activity amid continued global instability, according to a draft finance bill presented to Parliament late on Wednesday.

Cameroon is highly exposed to external shocks, including price volatility, due to its heavy reliance on imports of fuel, wheat and automobiles.

The overall deficit is projected to be 631 billion CFA francs ($1.11 billion), up from 309.9 billion in 2025, raising the government's total financing needs to 3,104.2 billion CFA francs in 2026, compared with 2,326.5 billion this year.

The government has proposed a 2026 state budget of 8,816.4 billion CFA francs, up 14% from 2025, driven by higher personnel costs, goods and services, transfers and debt payments.

The draft bill is expected to pass as President Paul Biya's ruling CPDM party holds a majority in both houses of Parliament.

Economic growth is expected to improve, reaching 4.3% in 2026, up from an estimated 3.9% in 2025.

"This growth would be driven primarily by the strong performance in the non-oil sector, while the oil sector is expected to contract slightly by 0.1% in 2026," a government statement said, adding that inflation would ease by 0.2% from the current 3.2%.

To cover its financing gap and other obligations, the government plans to rely on 1,000 billion CFA francs in external borrowing, 826.7 billion CFA francs in project loans, 589.7 billion CFA francs in bank financing and 400 billion CFA francs from issuing government securities, along with budget support and exceptional financing.

Cameroon, Central Africa's largest economy with major sectors in oil and gas, cocoa and timber, has recently stepped up borrowing to plug budget shortfalls and fund infrastructure.

Over the past few years, Cameroon has suffered from liquidity problems, pushing the government to carry out structural reforms and broaden its tax base.

($1 = 566.0000 CFA francs)

(Editing by Ayen Deng Bior, editing by Ed Osmond)