(Bloomberg) -- Cameroonian dollar bonds dropped for a third consecutive day as speculation about the health of the nation’s president raised concerns about a potential succession battle.
The country’s debt ranked among the worst performers Wednesday in an index tracking frontier and emerging market sovereign bonds. President Paul Biya has been absent from public view since early September, though the government said the 91-year-old leader was healthy.
Biya traveled to Europe after attending the Forum on China-Africa Cooperation in Beijing, government spokesman Rene Emmanuel Sadi said in a statement read on state radio on Tuesday. The president “is in good health and will be back in the country any moment from now,” Sadi said.
One of the world’s longest-serving rulers, Biya has been in power in Cameroon since 1982, having fended off challengers in the ruling party that have left no clear successor. The central African nation, one of the world’s biggest producers of cocoa, is already being destabilized by a separatist revolt that erupted in 2017 and has left at least 6,000 people dead.
“It’s been a constant rumor about his health over the last few years,” said Thys Louw, a portfolio manager at Ninety One UK Ltd. “He had centered so much power around him. The question will be succession, and naturally, that could create some volatility.”
Fiscal Policy
It’s not uncommon for the president, who spends much of the year at the Intercontinental Hotel in Geneva, to be absent from the country for long periods of time.
Biya was last seen in public at the summit where he met Chinese President Xi Jinping. He’s failed to attend two events since then: the Sept. 22-27 United Nations General Assembly and last week’s Francophonie summit in France, according to Oxford Economics.
Under Cameroon’s constitution, the senate president is to assume the presidency if the president is no longer able to fulfill his duties and must organize elections within 30 days. The current head of the senate is 89-year-old Marcel Niat Njifenji.
If Niat can’t step in, the deputy senate president would take over temporarily, though neither can run in the elections they oversee.
Increased political uncertainty in Cameroon would raise questions about the future of fiscal policy, said Sam Singh-Jami, Africa strategist at Rand Merchant Bank. The country’s adherence to its debt commitments “could become an issue, even though Cameroon’s macroeconomic metrics look relatively good compared to a number of economies on the continent,” she said.
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