DAKAR, July 29 (Reuters) - The International Monetary Fund (IMF) said on Thursday its board had approved a three-year financing deal for Cameroon worth $689.5 million to help the Central African nation’s economy recover from the COVID-19 pandemic and to support promised reforms. The arrangement allows for the immediate disbursement of the equivalent of $177.2 million for budget support, the Fund said in a statement. “Cameroon faces significant development challenges heightened by the pandemic. An upsurge in COVID-19 cases since January 2021, has raised concerns about growth prospects,” it said. “Steadfast commitment to strengthen transparency and good governance and reduce corruption risks will be crucial.” The coronavirus crisis and trade shocks from a sharp fall in oil prices led Cameroon’s economy to contract 1.5%, according to IMF estimates. A gradual recovery could see the economy posting growth of 3.6% in 2021 and 4.6% in 2022, the Fund said. (Reporting by Alessandra Prentice; Editing by Sandra Maler) Our Standards: The Thomson Reuters Trust Principles.