IMF Okays $4.1 mln for Cameroon, warns on oil price

WASHINGTON (Reuters) - The International Monetary Fund on Friday approved the final loan tranche of $4.1 million under the country's $28.5 million IMF program and warned that falling oil prices pose difficulties for the economy.

The IMF said economic growth in the West African country has been below expectations and risks had increased because of falling global oil prices and a worldwide credit crisis.

"With oil revenue declining, the authorities face the difficult challenge of preserving a sustainable fiscal position while protecting priority spending," IMF First Deputy Managing Director John Lipsky said in a statement.

"Their ability to mobilize non-oil revenue will be critical," he said, adding that additional steps may be needed should oil revenue be less than budgeted.

Lipsky said targeting spending at priority areas and lowering subsidies will be critical as oil revenues drop.

"More generally, the authorities' intention to prepare investment projects in a medium-term context and to monitor carefully the implementation of the new framework budget law is appropriate," Lipsky added.

Last year, before the global financial crisis took the shine off bullish metals prices, Cameroon said it expects some $10 billion in mining investments in the coming years.

The former French colony is the dominant economy in the six-nation central African CFA franc zone, exporting crude oil, bananas, cocoa and cotton. It also has rich deposits of bauxite, iron ore, cobalt, nickel and uranium.