Between 2021 and 2022, the Cameroon Development Corporation (CDC), a state-owned agro-industrial enterprise operating banana, oil palm, and rubber plantations in the Littoral and Southwest regions of Cameroon, experienced a staggering 34.7% reduction in its workforce. The information was revealed in a recent report by the Technical Commission for the Rehabilitation of Public and Para-public Sector Enterprises (CTR), indicating that 5,518 personnel left the company during the period under review.

The CTR attributes this “significant and continuous decline” in the workforce to the “security crisis that came with the Anglophone conflict.” Indeed, since the conflict started in late 2016, CDC’s facilities and employees have become targets of separatist militants. Incidents such as the incineration of company packaging units, conversion of plantations into separatist base camps, and attacks resulting in severe injuries or fatalities to employees have plagued the CDC. The insecurity prompted a halt in the company’s operations in mid-2018, only to resume nearly two years later. The situation has gradually worsened with the accumulation of salary arrears due to the CDC’s financial difficulties resulting from the Anglophone crisis.

“The operational challenges faced by CDC hinder meeting its financial commitments, resulting in an overall increase in its indebtedness. Social debt has increased due to the 17.78% rise in salary arrears as of December 31, 2022, despite government support, and the accumulation of unpaid social security contributions, which have risen by 15%. As of June 30, 2023, salary arrears amounted to CFA35.7 billion, and the social debt to the National Social Security Fund (CNPS) stood at CFA26.7 billion,” CTR said.

With a monthly payroll estimated at CFA2 billion, according to figures disclosed during a board meeting on December 27, 2018, this volume of salary arrears corresponds to approximately 17 months of unpaid wages. Considering the financial assistance allocated by the state to public enterprises in the 2024 budget, personnel expenses were estimated at CFA16.09 billion in 2022, equating to CFA1.34 billion per month.

With cumulative losses of CFA38.7 billion between 2019 and 2021, as reported by the CTR, CDC emerges as the Cameroonian company bearing the heaviest toll of the ongoing separatist war in the Northwest and Southwest regions.

Source: Business in Cameroon

The Cameroonian government on Friday hiked fuel prices, which will go into effect from Saturday.

According to a statement by Seraphin Magloire Fouda, Secretary General at the Prime Minister’s Office, the price of a liter of Super has been increased from 730 XAF (approximately 1.21 U.S. dollars) per liter to 840 XAF (approximately 1.39 U.S. dollars) and gasoline increases from 720 XAF (approximately 1.19 U.S. dollars) per liter to 828 XAF (approximately 1.37 U.S. dollars).

Fouda said in a statement Friday night that the price increase was “due to the need to absorb the growing budgetary constraints that the state is facing and to avoid tensions in the supply of the nation’s market with petroleum products.”

As part of the measures to accompany the price hikes, basic salary of civil servants will be increased by 5 percent and “certain” taxes and customs duties in the road transport sector will be reduced, according to officials.

“The government is counting on the understanding, sense of responsibility and civic-mindedness of consumers for the implementation of these measures,” the statement said.

Officials said the latest hikes at the retail level were inevitable to reduce the subsidy burden on state-run distribution companies.

The central African nation increased fuel prices by over 10 percent in January last year.

Source: Xinhuanet

The outstanding non-repaid bank credits of the Central African Economic and Monetary Community (Cemac) reached CFA1,917.9 billion on December 31, 2022. These overdue bank credits have multiplied by 4 compared to their level ten years earlier (CFA495 billion at the end of December 2012), as revealed by the Bank of Central African States (Beac) in its 2022 Financial Stability Review, published on Monday, January 8, 2024.

According to the financial institution, the deterioration in the quality of the banks’ credit portfolios from 2012 to 2022 is explained by both economic and structural factors. Beac indicates that the increase in the level of overdue claims is linked to deficiencies in risk management and governance within banks. Indeed, the central bank explains that banks are putting more effort into commercial aspects at the expense of a rigorous analysis of credit risk in their portfolios.

Also, the weakening of the budgetary balances of Cemac states, followed by a decrease in economic activity, has led to an accumulation of payment arrears by the states in the banks’ credit portfolios.

Beac mentions that this growth in overdue claims “is a major concern for the states in the region, for the Central African Banking Commission (Cobac), the central bank, and credit institutions.” This concern is all the more important given that credit risk, in the form of overdue receivables, currently remains one of the main risks facing Cemac banks, the central bank points out.

To limit the progression of these claims, which affect the liquidity of banks and reduce their actions in financing the economy, Cobac requests banks to present plans for the settlement of these overdue claims and the implementation of measures to improve the credit risk management systems of banks.

Source: Business in Cameroon

The United Arab Emirates banned ships arriving in its waters that sail under the flag of Cameroon — a move that distances the emirate from risky vessels that have been assembled to transport sanctioned oil.

The Cameroon flag has been added to a restricted list and maritime companies and ship agents should not provide vessels registered in the African country with services, according to a Ministry of Energy and Infrastructure circular published on the Port of Fujairah website. The ban won’t apply to ships that have been assessed by a wider international classification body.

Most merchant ships sail under flags far from the countries in which they’re owned or operated. Popular ones include Panama and the Marshall Islands, which are integral in upholding safety standards in the shipping industry.

But when Russia assembled a vast shadow fleet of tankers to keep its oil moving in the face of US sanctions, part of that fleet turned to little-known flags such as Cameroon’s.

As recently as the middle of last year, Cameroon was designated as having a very high risk of vessels failing safety inspections when calling at ports.

The Cameroon-registered fleet of oil tankers is small but most have been to Russia in the past year.

Of the 14 Cameroon-flagged oil carriers small enough to collect oil from Russian ports, 11 did so in the past 12 months, industry data collated by Bloomberg show.

They account for less than 1% of Russia’s total oil shipments.

Source: Bloomberg

Cameroon will become a net exporter of iron ore in 2024, Interim Minister of Mines, Industries and Technological Development Fuh Calistus Gentry has said.

“We have negotiated a huge project, which will involve 100 million tons of iron ore,” Gentry told reporters Sunday night in the capital, Yaounde. “We are from 2024 a mining nation… we are going to see regional explosion of the industry.”

He said Cameroon is particularly keen to working with China to tap its mineral resources.

Gentry spoke shortly after President Paul Biya said in a televised address to the nation that Cameroon is richly endowed with mineral resources that could be “excellent niche for financial resources.”

Source: Xinhuanet

The national refining company Sonara has reached a debt restructuring agreement with Swiss trader Mercuria Energy Trading. The agreement, signed on December 12 in Yaoundé after several months of negotiation and facilitated by the Ministry of Finance (Minfi), involves an amount of CFA20 billion, we learned.

Per their agreement, Mercuria Energy Trading authorizes Cameroon to repay the amount over 10 years, with an annual interest rate of 5.5% excluding taxes. The trader thus becomes the fourth with whom the Cameroonian State, committed to settling Sonara’s debts, has reached a compromise.

Similar deals were previously reached with Swiss trader Trafigura (September 29, 2023, for CFA14.5 billion), PSTV (January 26, 2023, for CFA8.5 billion), and Swiss trader Vitol (September 22, 2022, for CFA185 billion). They have all agreed to reschedule the repayment of Sonara’s debt over 10 years, with an annual interest rate of 5.5% excluding taxes.

According to Finance Minister Louis Paul Motaze, this fourth stage of the Sonara debt restructuring and repayment process with traders “will be completed during the first quarter of 2024” with the conclusion of two other agreements with traders Petra Energy and Addax Energy. The government official had previously announced the completion of this process by October 2023.

As a reminder, Sonara found itself in this situation mainly after the fire that ravaged its facilities in May 2019 in Limbe (Southwest).  The company now struggles to meet its commitments and carries a debt of CFA374 billion with traders and suppliers of crude oil and finished petroleum products. As of the end of September 2023, the refinery accumulated a debt of CFA425.5 billion with its foreign suppliers, representing 83.2% of the overall outstanding debt of public enterprises, as revealed by the Sinking Fund (CAA) in its latest monthly public debt outlook for Cameroon.

Source: Business in Cameroon

Kenya and the European Union on Monday signed a long-negotiated trade agreement to increase the flow of goods between the two markets, as Brussels pursues stronger economic ties with Africa.

The Economic Partnership Agreement will give Kenya duty-free and quota-free access to the EU, its biggest export market, while European goods will receive progressive tariff reductions.

The agreement is the first broad trade deal between the EU and an African nation since 2016 and follows a spending spree by China on lavish infrastructure projects across the continent.

“Although today represents a moment of monumental promise, it is also the beginning of a historic partnership for historic transformation,” Kenyan President William Ruto said at a ceremony attended by European Commission chief Ursula von der Leyen in Kenya’s capital Nairobi.

“The core of this arrangement is to put real money into the pockets of ordinary people,” said Ruto.

EU chief von der Leyen said the partnership was a “win-win situation on both sides” and called on other East African nations to join the pact, which came after years of negotiations that concluded in June.

“We are deepening trade ties and building up our economic resilience,” she said.

“We are opening a new chapter in our very strong relationship and now our effort should be focused on implementation,” von der Leyen added.

Both the Kenyan and the European parliaments must ratify the deal before it comes into force.

The European Union said that the deal was “the most ambitious economic partnership” it had with a developing country.

It includes commitments to sustainable development in areas such as labour rights and environmental protection, the EU said in a statement.

“A dedicated chapter has been included on economic and development cooperation, aimed at enhancing the competitiveness of the Kenyan economy,” the EU said.

EU’s trade commissioner Valdis Dombrovskis said the “historic agreement” would unlock new areas for cooperation and benefit.

The 27-nation bloc accounts for more than 20 percent of Kenya’s overall exports, according to government data, mainly agricultural products, including vegetables, fruits and the country’s famous tea and coffee.

Total two-way trade between the markets hit 3.3 billion euros ($3.6 billion) in 2022, up 27 percent since 2018, according to EU figures.

‘Door wide open’

Africa has become a renewed diplomatic battleground since the Ukraine war began, with Kenya and other countries on the continent aggressively courted by Russia and China and the West.

An economic powerhouse of east Africa, Kenya is seen by the international community as a reliable and stable democracy in a turbulent region.

The EU has taken steps to counter China’s Belt and Road programme, announcing in February it would increase investments in Kenya by hundreds of millions of dollars through its own Global Gateway initiative.

Kenya’s biggest infrastructure project, a $5 billion railway line connecting Nairobi to the port city of Mombasa, which opened in 2017, was built by a Chinese company with Chinese financing.

Kenya is also negotiating a trade deal with the United States.

The new trade deal with Europe is the culmination of trade talks between the EU and the regional East African Community (EAC) that started roughly a decade ago.

Kenya signed and ratified an initial trade agreement with the EU in 2016 alongside the EAC but it fell through after some countries failed to greenlight the pact, with Kenya eventually pursuing its own deal.

“This agreement leaves the door wide open for our EAC partners to join so that together as a region we can benefit,” Ruto said.

Source: AFP

Cameroon’s largest private sector lobby group, the Cameroon Employers’ Organisation (GICAM) has expressed “deep concern” following a recent court order compelling Afriland First Bank to freeze money held in MTN Cameron’s Mobile Money Pool Account.

Célestin Tawamba, President of GICAM, said the decision was taken with no regard to banking regulation in the sub-region and poses major risks to social cohesion and peace.

“It is well known that the funds that pass through the digital platforms of the operators of electronic communications network belong to the holders of electronic money accounts in the books of these operators, and are not their property,” Tawamba said, adding that bank accounts housing such funds are exempt from seizure under Bank of Central African States (BEAC) rules.

Célestin Tawamba, President of GICAM.Célestin Tawamba, President of GICAM.

The GICAM leader warned that the failure to enforce the law is likely to fuel discontent that could lead to unrest among citizens who would be unjustly deprived of their hard-earned resources in their mobile accounts.

“GICAM can’t keep quiet about this issue regarding the harmful consequences that such a decision would have on the attractiveness of investments in Cameroon,” Tawamba underscored, calling on judicial authorities to reverse the order.

The drawn-out matter emanates from an ongoing case in South African High Court involving Cameroonian business mogul Ahmadou Baba Danpullo and his South African company Bestinver Holdings and First National Bank (FNB).

In the matter, FNB, which was owed R507 million by Danpullo’s companies, launched applications for the winding-up of the companies; and on 19 June 2020, the companies were placed in provisional business rescue, before the order was made final on 26 October 2020.

In response, Danpullo cried foul alleging discrimination, as his real estate portfolio reportedly valued at R4 billion was liquidated for the R507 million owed to the bank.

FNB denied the allegation, saying the move was strictly a normal business decision to recoup monies owed to the bank.

Danpullo then approached courts in his home country and was granted a garnishee order on accounts of MTN, claiming it is a subsidiary of the Public Investment Corporate, which he says is also a shareholder in FNB.

Source: iTweb

Cameroon aims for an economic growth of 4.5 percent in 2024, up from the 3.9 percent forecast in 2023, Prime Minister Joseph Dion Ngute has said.

Delivering the government’s 2024 program to the National Assembly late Thursday, Ngute acknowledged that the macroeconomic targets are very ambitious amid the challenges facing the central African nation as a result of both internal and external factors.

He said the government’s “Economic, Financial, Social and Cultural Program… aims to boost economy and uplift the standards of living of our citizens.”

Ngute said the government has set a comprehensive 2024 budget of 6,740.1 billion xaf (about 11.21 billion U.S. dollars), compared to 6,726.9 billion xaf (about 11.19 billion dollars) in 2023.

The budget will prioritize job creation, poverty alleviation, national defense and internal security, macroeconomic stability, investment environment optimization and social security, he said.

Source: Xinhuanet