Performance during the first half of the fiscal year was broadly on track and all the quantitative and structural performance criteria were met. However, economic growth was lower than envisaged, as a slowdown in activity in the export-oriented sectors of manufacturing and forestry was only partially offset by the gains in activity in the agriculture, construction and energy sectors. With the improvement in revenue mobilization, the government efforts are now centered on strengthening expenditure management and control, and improving transparency in government operations. The government's action plan in this area includes, inter alia, annual audits of public agencies, the issuance of quarterly reports by key ministries, and an overhaul of the procurement system. Also the confidence in the banking system continues its gradual increase with the money supply and time deposits rising in real terms.
Progress continues to be made in the structural area.
The transport sector, which is critical for improving competitiveness, is being promoted by measures aimed at strengthening the Road Fund and road maintenance work, the restructuring of the port of Douala, including a specific action plan to reduce substantially passage time of merchandise, and the rehabilitation of the railroad. In addition an operational and managerial audit of the SNH has been launched, and a strategy defining the respective roles of the SNH and the private sector in the production and distribution of oil and petroleum products is being prepared with a view to further deepening the liberalization of the sector. Nevertheless, despite continuous improvement in economic conditions since 1997, the economy is still fragile and poverty remains widespread in Cameroon. Directors stressed that, in order to ensure lasting and high quality growth, the authorities will need to establish a solid foundation for the next phase of reforms. In particular, they emphasized the need to strengthen budgetary performance, to reinforce structural adjustment efforts and, most importantly, to enhance transparency and proceed vigorously to improve governance.