During the launch of Cameroon’s 2025 state budget on January 15 in Buea, Finance Minister Louis Paul Motazé outlined new steps to manage the debt crisis at the National Refining Company (Sonara). The state-owned oil refinery has struggled since a fire severely damaged its facilities in May 2019. As part of the restructuring plan, the government assumed Sonara’s tax debt, valued at CFA145.4 billion.

“Sonara has been recapitalized with CFA145.5 billion in tax debt and secured long-term financing to gradually repay its banking and non-banking debts,” Motazé said. The initiative aims to ease the financial strain on Sonara, which is Cameroon’s most indebted state-owned company.

To prevent Sonara’s debt from harming the country’s banking system, the government reached a deal with nine local banks to restructure CFA261.4 billion of the company’s debt over ten years at an interest rate of 5.5%. This agreement, finalized on October 15, 2021, has already helped reduce the debt. By June 30, 2024, CFA120 billion of Sonara’s consolidated banking debt—initially CFA376 billion as of July 2021—had been repaid.

A similar approach was taken in 2023 to restructure CFA312 billion in debts owed to oil traders, dating back to April 2021. To secure the repayment of these debts, the government introduced a levy of CFA48.7 per liter on fuel sold at the pump.

As of October 31, 2024, this levy had generated CFA353 billion, which was deposited into an escrow account at the Bank of Central African States (BEAC). The update was shared by the Minister of Water and Energy during a budget presentation to the National Assembly’s finance committee on December 4, 2024.

These efforts are part of Cameroon’s broader strategy to stabilize Sonara’s finances, reduce its massive debt, and ensure the refinery’s continued operation while protecting the country’s financial system.

Source: Business in Cameroon