Cameroon settled debts totaling CFA148.2 billion ($267 million) to the Chinese Eximbank in the first three months of 2024, as reported by the National Sinking Fund (CAA). Of this amount, CFA34.7 billion represents interest payments, with CFA113.5 billion allocated to principal repayment. These figures mark the largest debt and interest repayments made by Cameroon since the beginning of 2024 to all categories of creditors.

The Chinese bank emerged as the top beneficiary of Cameroon’s external debts by the end of March 2024, surpassing all multilateral institutions. Notably, the World Bank received CFA17.5 billion between January and March 2024, including CFA5.1 billion in interest. The IMF received CFA17.1 billion with CFA2.8 billion in interest, while the African Development Bank (AfDB) received CFA20.1 billion, including CFA9.3 billion in interest.

According to the CAA’s report, during the first three months of 2024, Cameroon’s cumulative external debt service amounted to CFA262 billion, representing a 31.8% execution rate compared to the projected CFA825 billion for 2024 (as per the Finance Law). Specifically, CFA195.4 billion is allocated for principal repayment and CFA66.7 billion for interest payments.

Source: Business in Cameroon

The Mayor of Douala, Roger Mbassa Ndine, Mitwa Ng’ambi, CEO of MTN Cameroon, and Alain Nono, General Manager of Mobile Money Corporation (MMC), signed a three-year renewable memorandum of understanding on April 12, 2024, in Douala. The agreement facilitates collaboration across several sectors, including the use of Mobile Money (MoMo) as an alternative method for collecting taxes, fees, and other funds by the Douala city government.

Taxpayers will be able to pay their dues via MoMo, in addition to existing payment options like cash and online methods. The start date for this payment facility remains undetermined, as specific agreements will define the scope of each area covered by the memorandum.

At the same time, MMC and the Urban Community of Douala (CUD) signed an agreement to support the Professionalization and Sanitation Program for the motorcycle taxi sector and the Douala Clean City initiative, which focuses on city cleanliness. This agreement lasts one year, with the possibility of a six-month extension.

MTN Cameroon has created a management platform for motorcycle transporters. The company will fund the construction of parking areas for motorcycle taxis near busy intersections on major city roads. Key focuses also include the training of motorcycle taxi drivers in traffic laws and civic education and the digital and visual identification (vests and uniforms approved by the Douala city council) of the drivers operating in Cameroon’s economic capital.

Source: Business in Cameroon

In a move that reaffirms its commitment to Central Africa’s development course, the African Development Bank (AfDB) has inaugurated an ultramodern regional office building in Yaoundé, Cameroon.

Joseph Dion Ngute, Prime Minister of Cameroon, and Marie-Laure Akin-Olugbade, the Bank Group’s Vice-President for the Regional Development, Integration and Business Delivery Complex, led the opening ceremony held on 12 April. It was attended by Cameroonian government officials, diplomats, representatives of international and subregional bodies, as well as the private sector and civil society.

Situated in the Golf district, the six-storey regional office building is equipped with 130 workstations, several meeting rooms, and a clinic.

Prime Minister Ngute praised the Bank’s decision to establish the regional hub in Cameroon. “This inauguration demonstrates the strength of the relationship between Central Africa and the African Development Bank. The regional office “will enable the Bank to get closer to the realities of our sub-region and to provide more than in the past a specific support in line with the expectations of our populations,” he said.

The Central Africa regional office is one of six operated by the Bank globally, including one in Asia.

Akin-Olugbade said the regional office will strengthen dialogue with regional economic communities, development partners and national authorities. “It will expedite the implementation of our regional integration initiatives in Central Africa and promote business development with the private sector, a crucial element for inclusive accelerated growth and development,” she stressed.

A historically significant region for the Bank

Many of the countries of Central Africa– Cameroon, Central African Republic, Chad, Congo, Democratic Republic of Congo, Equatorial Guinea and Gabon—participated in the Bank’s inception discussions in 1963 in Khartoum, Sudan. The Bank’s first approved operation for Cameroon was the $4 million funding of Douala Airport on 22 November 1972.

The report distributed by the APO Group on behalf of African Development Bank Group (AfDB) stated that during the ceremony, Prime Minister Ngute formally handed over the indenture covering the 4,000 square meter land donated by the government for the new regional office building to Akin-Olugbade. In return, the Bank also presented a certificate to Cameroon’s Minister of Economy, Planning and Regional Development, Alassane Alamine Mey, for his contributions to the Youth Employability Support Programme, which offers one-year work placements to young graduates on Bank projects in Cameroon.

In May 2019, the Bank Group approved a Central Africa Regional Integration Strategy Paper (2019-2025) aimed strengthening regional infrastructure and intra-regional trade and building the institutional capacities of regional economic communities.

Currently, the Bank’s Central Africa portfolio comprises 121 operations valued at $6 billion. It has approved roughly 600 operations across the region, totalling $18 billion. Between 2019 and 2024, the Bank approved 20 regional operations, totalling $824.41 million, for Central Africa.

Source: Apanews

During the March 21 inauguration ceremony for the extension of the Yaoundé factory, the CEO of Société Anonyme des Boissons du Cameroun (SABC) addressed several government members, including Commerce Minister Luc Magloire Mbarga Atangana. “The resilience we have shown for months, and the resilience demonstrated by the entire sector, is reaching its limits (…) While it’s true that we are the undisputed leaders in our market and are fully committed to developing and maintaining our top position, we are not invincible,” he said hinting that the current situation could impact the operations of the Castel Group subsidiary in the country.

He explained that for the past three years, the beverage industry has faced an “inflationary tsunami” on raw materials, consumables, fuel, gas, electricity, and wages, yet beverage prices have not increased in Cameroon. “This country is unique in that respect,” he claimed. In just two years, SABC has seen a more than CFA33 billion increase in input costs: CFA16 billion for the 2021-2022 period and CFA17 billion for 2022-2023. With over 50% of its revenue already going to the state in the form of taxes and duties (VAT, excise duties, customs duties, corporate tax…), “the recent increase in excise duties decided in the 2024 finance law only adds to the already palpable fragility,” Descazeaud said.

“We’ve contributed and helped the government fight the high cost of living for years. But 2024 brings a new round of increases, not to mention excise duties and other taxes that have also risen in the 2024 Finance Act. Now, I think it’s time to give a helping hand to producers to ensure that they continue to invest and produce to meet demand and market needs in the years ahead,” he said, emphasizing that SABC, like other Cameroonian companies, needs a stable business environment characterized by tax policies that foster development.

To cushion these shocks, Stéphane Descazeaud advocates for a CFA100 increase in beer prices. “They need to be raised significantly for a simple reason: every time you raise the price of beer by CFA100, the state takes CFA50 in taxes and duties. Thus, to achieve a real increase of CFA50, the minimum amount we should recover after the multiple increases suffered in recent years, it would be necessary to increase the price of beer by CFA100. But these are discussions that must be held with the government,” he explained.

According to the CEO of SABC, this would actually formalize the situation. “Prices have already increased in the market, but unfortunately, this does not benefit the sector or the producers, which is very unfortunate,” he said. Indeed, finding a bar that sells beer at the recommended retail price is difficult. For example, for a 65 cl beer, the recommended price is CFA650, but today it is nearly impossible to buy a beer for less than CFA700, except for takeout.

This request from the leader of the brewing market in Cameroon echoes that of the Association of Alcohol Producers of Cameroon (CAPA). On December 20, this group, which includes SABC, the Cameroon Union of Breweries (UCB), Guinness Cameroon, the Cameroonian Society of Fermentations (Fermencam), and the Society for the Manufacture of Wines of Cameroon (Sofavinc), asked the government for a CFA50 increase in the prices of beers and soft drinks due to their rising tax burdens in 2024.

Electricity outages

According to Descazeaud, this increase is all the more vital as the brewing industry is affected by other issues. “Like all other industrialists, we are fully experiencing the numerous electricity outages that have reduced our production capacities since last December and damaged much of our equipment, for which spare parts are not always available. The same is true for our local suppliers, whose disruption rate has peaked in recent months due to their production difficulties,” he stated. The consequences on the market are numerous: repeated stockouts, threats to entire sectors, and logically, market selling prices are no longer respected, he listed.

This is compounded by the unfair competition from smuggled Nigerian beer, which “floods the markets at the expense of the Cameroonian sector, which pays all its taxes.” A phenomenon that intensifies as taxes increase in Cameroon, industry players argue.

Source: Business in Cameroon

The Cameroonian government has issued a 60-day ultimatum to major mobile operators, MTN and Orange, demanding updated subscriber information. This move, directed by Minister of Territorial Administration Paul Atanga Nji, aims to clamp down on the use of unregistered SIM cards for extortion and ransom demands. This phenomenon is particularly prevalent in regions that have been grappling with socio-political crises and security problems since the end of October 2016.

About 450 unregistered SIM cards are reportedly in circulation within conflict zones, according to Minister Nji. He revealed that separatists in the country’s Anglophone regions have collected over CFA320 million using such cards over the past 12 months. Meanwhile, kidnappers in the Far North and Adamawa regions have collected about CFA75 million. “This is an extremely serious situation. Mobile operators will not profit at the expense of Cameroon’s security,” Nji stated during a meeting on April 8, with representatives from Orange Cameroon, MTN Cameroon, and the National Agency for Information and Communication Technologies (Antic).

To address the issue, Nji has demanded the systematic identification of every SIM card sold in these regions, in line with existing regulations, emphasizing that at least twenty unregistered SIM cards are confiscated during each takedown of terrorist groups. “After using a card, its owner simply destroys it, making them untraceable especially since they were not identified,” he explained, citing concerns about the ease with which individuals can avoid detection.

Furthermore, Nji has ordered Orange and MTN to provide a comprehensive list of their product sellers and Orange Money and Mobile Money kiosk operators in the Northwest and Southwest regions within the specified timeframe. He warned of “severe sanctions” should the companies fail to comply with this directive.

The Prime Minister’s decree of December 3, 2015, mandates that operators must identify their subscribers and terminal equipment at the time of any electronic communications service subscription. The decree also limits individuals to owning no more than three SIM cards per operator. In July 2019, Orange, MTN, and Nexttel were fined a total of CFA3.5 billion by the Telecommunications Regulatory Agency (ART) for “recurring failures” to implement this decree, including the pre-activation of SIM cards, street sales of SIM cards, individuals owning more than three SIM cards, and activating numbers without prior identification.

Source: Business in Cameroon

Cameroonian Abdoulaye Mouchili has been appointed as the country representative for Ernst & Young (EY) in Cameroon and Chad on April 1. With a rich background of more than 20 years in auditing across four countries, including experience at EY in Canada, Mouchili is described by his peers as a highly experienced professional.

He steps into the role following the interim leadership of Erik Watremez, who was appointed at the end of 2023 amid a dispute between EY Global and its then-Cameroon country director, lawyer Joseph Pagop Noupoué. This internal conflict led Pagop to rename Ernst & Young Cameroon Sarl and ECA Ernst & Young Cameroun S.A. to ECA Tax & Legal and ECA S.A., respectively. Since then, a struggle over the assets of ECA Ernst & Young Cameroun, including its clientele, has ensued between the two factions.

Despite the ongoing legal battle, Mouchili’s appointment as country representative is poised to provide reassurance to both the 120 EY employees in Cameroon and the local clients who have been caught in the crossfire of this dispute. Among them are major companies such as BGFIBank Cameroon, Société Générale Cameroun, MTN Cameroon, Chococam, UBA Cameroon, and the Cameroonian subsidiaries of Globeleq (KPDC and DPDC).

This conflict prompted the Board of Directors of the Bank of Central African States (Beac) to “authorize Ernst & Young Congo to carry out the certification of Beac’s accounts for the 2023 and 2024 fiscal years” instead of EY Cameroon. This was during an extraordinary session on February 29 in Yaoundé.

Source: Business in Cameroon

The EU agreed to disburse over CFA12 billion to support growth-driven projects in Cameroon. The two related deals were signed in Yaoundé on March 26 between Cameroon’s Minister of Economy, Alamine Ousmane Mey, and the Head of the European Union delegation to Cameroon, Jean-Marc Chataigner.

They align with the EU’s “Global Gateway” strategy, aimed at forging sustainable investment partnerships in climate/energy, transportation, digital, health, education, and research sectors, as highlighted by the EU delegation in Cameroon.

The first agreement, comprising a mix of grants and loans amounting to CFA9.8 billion, is designed to bolster the competitiveness of national enterprises. It seeks to enhance the business climate and ease access to financing for companies by supporting the development of value chains with direct aid and financial facilities. The second agreement, combining grants and loans as well, provides CFA2.6 billion. It aims to expand access to electricity in Cameroon, increasingly sourced from renewable energies. It focuses on two main strategies: improving the capacities of regulatory authorities and mobilizing project financing from private developers.

According to the EU delegation, these financing agreements are part of Cameroon’s Multiannual Indicative Program (MIP) for 2021-2027. They are strategically aligned with the objectives of Cameroon’s National Development Strategy for 2030 (SND30), which is currently being implemented in the country.

Source: Business in Cameroon

The Bank of Central African States (Beac) plans to initiate three bond issuances targeting the community’s banks between March 18 and April 1, 2024. According to the timetable just published by Michel Dzombala, Beac’s vice-governor, these operations aim to withdraw a total of CFA150 billion from bank vaults (CF50 billion per operation), as part of the restrictive monetary policy implemented by the central bank since 2022 to combat inflation.

In detail, the bank will apply an interest rate of 3.5% for 28-day maturity bonds and 2.5% for 14-day securities. To participate in these operations, aimed at reducing bank liquidity, credit institutions are required not to seek any facilities from the central bank for the duration of the bonds’ maturity. Also, these securities will not be eligible for Beac’s refinancing operations.

Following the increase in benchmark interest rates, the cessation of liquidity injection operations, and the ramping up of weekly liquidity withdrawal activities, Beac’s bonds are the central bank’s latest strategy to drain banks and restrict credit access. The goal is to mitigate the portion of inflation that is attributed to monetary factors, currently at 20%. Beac received authorization to implement this new tool following the Monetary Policy Committee meeting on December 12, 2023, which recognized persistent inflationary pressures despite tighter monetary policy.

“We will invite the banking community holding surplus funds to submit their interest rate proposals based on the amount of liquidity we aim to extract from the system. Each bank will place their bids, and we will ultimately select a rate to eliminate the surplus liquidity found in these institutions. Our objective at Beac is to swiftly eliminate the excess liquidity from banks in the very short term and to keep a closer watch on its trends,” stated Abbas Mahamat Tolli, the former governor of Beac, in a press conference after the December 12 meeting.

Following the guidelines set by the Monetary Policy Committee, Beac launched its inaugural bond offering on February 9 with the goal of raising CFA50 billion (about $83 million) at a 3.5% interest rate. This initial effort did not yield expected results and the Beac has now set a more ambitious goal, aiming at CFA150 billion from the banking sector. This strategy indicates an ongoing surplus of bank liquidity in the Cemac zone, a key driver of inflation, particularly as fuel prices rise in nations like Cameroon and Chad.

Source: Business in Cameroon