Business

16, November 2023

Statement by the African Development Bank Group following the illegal arrest of its staff in Ethiopia ⁰

On 31 October 2023, two staff members of the African Development Bank Group based in Addis Ababa were unlawfully arrested, physically assaulted, and detained for many hours by elements of the security forces without any official explanation.

We are pleased that the Prime Minister of Ethiopia immediately acted when he learnt of the incident, ordered the immediate release of the affected staff and promised to order an immediate investigation into the incident.

This is a very serious diplomatic incident, and the African Development Bank has since lodged a formal complaint with the Ethiopian authorities. For their part, the government has formally acknowledged our complaint, recognised the gravity of the incident, and reassured us that all those involved in breaking the law will be thoroughly investigated and brought to justice, ensuring transparency and full accountability.

Furthermore, the government has also reassured the African Development Bank that its staff in Ethiopia and those travelling to the country on mission will continue to enjoy full respect of their rights, privileges and diplomatic immunities under the Vienna Convention on Diplomatic Relations as well as the African Development Bank’s Host Country Agreement with the Government of Ethiopia.

The African Development Bank values its excellent relations with the government of Ethiopia and is currently engaged with the authorities, through diplomatic channels, concerning the incident.

The African Development Bank’s management would like to reiterate its commitment to the safety, security, rights and privileges of all its staff in all countries where the Bank operates.

The African Development Bank wishes to assure all its partners that its operations in Ethiopia have not been affected by this incident.

Culled from ADBG

6, November 2023

Yaoundé: 77 private companies barred from public procurement ⁰

Seventy-seven private companies were denied government contracts last year, according to a document presented last October 27 by the National Anti-Corruption Commission (Conac).

The decision followed cases of irregularities identified in the execution of the contracts previously awarded to them. These include issues such as incomplete projects, abandoned construction sites, and financial shortcomings.

As per the Public Contracts Code, the ban on participating in public procurement cannot exceed two years. Further violations by the same companies might lead to permanent exclusion, under regulatory guidelines. Apart from these bans, Conac did not outline any additional sanctions imposed on the affected companies.

Individuals or companies facing these restrictions are not eligible for administrative purchase order procedures or public contracts. While the government sees this as an effective means to filter bidders, some industry players believe it’s not effective against providers who simply change their company names or managers and reapply. In 2020, the Ministry of Public Contracts published a list of 369 providers suspended from public procurement, particularly for abandoning construction sites.

Source: Business in Cameroon

31, October 2023

banque atlantique Cameroun rises to improve the quality of its service ⁰

Banque Atlantique Cameroun, a banking institution of systemic importance, has been in legal operations in the Cameroon’s banking market since 2009 and today, posts exceptional results driven by a dynamic evolution of its main indicators. These results served as basis for the award of the prize to the Best Performance in 2022 during Finance Week organized by EcoMatin Magazine.

In a bid to reach operational excellence and sustainably improve its infrastructure, banque atlantique Cameroun has embarked on a complete overhaul of its information systems, to acquire the best-in-class technologies and provide its valued customers with the best experience at its touchpoints.

Interieur

Based on the foregoing, banque atlantique Cameroun wishes to announce the migration of its core banking system and other technological and communication infrastructures, towards more modern, more stable, more efficient, more automated, and more secured systems.

For this purpose, banque atlantique Cameroun will observe a necessary shutdown of its systems, services, platforms and applications from Wednesday, November 1st to Saturday, November 4th, 2023. However, our Automated Teller Machines (ATMs) will remain in operation throughout this period. The restart of the systems is scheduled for Monday, November 6th, 2023 at 8:00 a.m.

banque atlantique Cameroun wishes to reassure the public and especially its valued customers that this operation aims to sustainably improve the quality of its products and services; to standardize its operations; and to make the customers’ experience exceptional across its network.

The Bank is aware of the inconvenience caused by this situation and sincerely apologizes in advance, and as well appreciates its customers’ sense of patience and understanding.

Note that our Customer Relationship Center will be available to assist you from 8 a.m. to 6 p.m. by call to 8086.

About BACM

banque atlantique Cameroun is a subsidiary of Atlantic Financial Group (AFG), a panafrican banking group founded in 2006 by the Ivorian businessman, Bernard KONE DOSSONGUI. In 2020, for the first time in its history, the Bank is listed among domiciliary banks for World Bank and African Development Bank projects, thereby consolidating its credibility and financial stability. With 23 branches across the national territory, the Bank successfully improved its footprint in the market, with an outstanding growth of its main indicators, closing the financial year with a total balance sheet of XAF 806 billion, compared to XAF 570 billion in 2021, thus an increase of 41.3%. In October 2023, banque atlantique Cameroun was awarded the 2022 Best Performance Prize during the Finance Week organized by Ecomatin Magazine. Find out more on our website at www.banqueatlantique-cmr.com or follow us on our social media networks.

Source: Business in Cameroon

30, October 2023

Conflict in Middle East could bring ‘dual shock’ to global commodity markets ⁰

Although the global economy is in a much better position than it was in the 1970s to cope with a major oil-price shock, an escalation of the latest conflict in the Middle East—which comes on top of disruptions caused by the Russian invasion of Ukraine—could push global commodity markets into uncharted waters, according to the World Bank’s latest Commodity Markets Outlook.

The report provides a preliminary assessment of the potential near-term implications of the conflict for commodity markets. It finds that the effects should be limited if the conflict doesn’t widen. Under the Bank’s baseline forecast, oil prices are expected to average $90 a barrel in the current quarter before declining to an average of $81 a barrel next year as global economic growth slows. Overall commodity prices are projected to fall 4.1% next year. Prices of agricultural commodities are expected to decline next year as supplies rise. Prices of base metals are also projected to drop 5% in 2024. Commodity prices are expected to stabilize in 2025.

The conflict’s effects on global commodity markets have been limited so far. Overall oil prices have risen about 6% since the start of the conflict. Prices of agricultural commodities, most metals, and other commodities have barely budged.

The outlook for commodity prices would darken quickly if the conflict were to escalate. The report outlines what might happen under three risk scenarios based on historical experience since the 1970s. The effects would depend on the degree of disruption to oil supplies. In a “small disruption” scenario, the global oil supply would be reduced by 500,000 to 2 million barrels per day—roughly equivalent to the reduction seen during the Libyan civil war in 2011. Under this scenario, the oil price would initially increase between 3% and 13% relative to the average for the current quarter—-to a range of $93 to $102 a barrel.

In a “medium disruption” scenario—roughly equivalent to the Iraq war in 2003—the global oil supply would be curtailed by 3 million to 5 million barrels per day. That would drive oil prices up by 21% to 35% initially—to between $109 and $121 a barrel. In a “large disruption” scenario—comparable to the Arab oil embargo in 1973— the global oil supply would shrink by 6 million to 8 million barrels per day. That would drive prices up by 56% to 75% initially—to between $140 and $157 a barrel.

“The latest conflict in the Middle East comes on the heels of the biggest shock to commodity markets since the 1970s—Russia’s war with Ukraine,” said Indermit Gill, the World Bank’s Chief Economist and Senior Vice President for Development Economics. “That had disruptive effects on the global economy that persist to this day. Policymakers will need to be vigilant. If the conflict were to escalate, the global economy would face a dual energy shock for the first time in decades—not just from the war in Ukraine but also from the Middle East.”

“Higher oil prices, if sustained, inevitably mean higher food prices,” said Ayhan Kose, the World Bank’s Deputy Chief Economist and Director of the Prospects Group. “If a severe oil-price shock materializes, it would push up food price inflation that has already been elevated in many developing countries. At the end of 2022, more than 700 million people—nearly a tenth of the global population—were undernourished. An escalation of the latest conflict would intensify food insecurity, not only within the region but also across the world.”

The fact that the conflict has so far had only modest impacts on commodity prices may reflect the global economy’s improved ability to absorb oil price shocks. Since the energy crisis of the 1970s, the report says, countries across the world have bolstered their defenses against such shocks. They have reduced their dependence on oil—the amount of oil needed to generate $1 of GDP has fallen by more than half since 1970. They have a more diversified base of oil exporters and expanded energy resources, including renewable sources. Some countries have established strategic petroleum reserves, set up arrangements for the coordination of supply, and developed futures markets to mitigate the impact of oil shortages on prices. These improvements suggest that an escalation of the conflict might have more moderate effects than would have been the case in the past.

Policymakers nevertheless need to remain alert, the report says. Some commodities—gold in particular—are flashing a warning about the outlook. Gold prices have risen about 8% since the onset of the conflict. Gold prices have a unique relationship to geopolitical concerns: they rise in periods of conflict and uncertainty often signaling an erosion of investor confidence.

If the conflict escalates, policymakers in developing countries will need to take steps to manage a potential increase in headline inflation. Given the risk of greater food insecurity, governments should avoid trade restrictions such as export bans on food and fertilizer. Such measures often intensify price volatility and heighten food insecurity. They should also refrain from introducing price controls and price subsidies in response to higher food and oil prices. A better option is to improve social safety nets, diversify food sources, and increase efficiency in food production and trade. In the longer term, all countries can bolster their energy security by accelerating the transition to renewable energy sources—which will mitigate the effects of oil-price shocks.

Source: World Bank

27, October 2023

Biya regime raises CFA50bn on the Beac market with higher rates ⁰

Cameroon’s Treasury raised a total of CFA49.8 billion on the Beac public securities market during the week of October 16 to 20, 2023, we learned. According to the operations report published by the central bank, these funds were raised through issues of 26-week fungible Treasury bills (BTA) (CFA39.8 billion raised out of CFA40 billion sought) and 52-week bills (the 10 billion sought were oversubscribed).

The weighted average interest rates for these transactions were 5.59% for 26-week BTAs and 5.85% for 52-week securities, for an overall average of 5.7%, well above the usual 3%. This rate is even slightly higher than the 5.67% average offered by the Cameroon Treasury on this market in September2023 but remains below the general market average, estimated at 6.29% that month.

Investor interest in Cameroonian bonds, which picked up again in September, continued in October, after the lack of interest seen at the start of the year. According to central bank data, the subscription rate for the 26-week BTAs was 99.80%, while 52-week securities were 140% oversubscribed. By way of comparison, the average subscription rates for this category of securities in Cameroon were 46.7% and 68.8% in June and August 2023 respectively.

Source: Business in Cameroon

25, October 2023

Eneo reports CFA75 billion losses in 5 years in Southern Cameroons ⁰

Cameroon’s power company Eneo just released its 2022 annual report, outlining the damages it has suffered in 5 years in the North-West and South-West regions where the Anglophone crisis rages.

According to the report, “Eneo has maintained its operations in the North-West and South-West, despite the particularly deteriorated security conditions, which have jeopardized its agents, equipment, deployment and finances. A commitment to continue providing electrical service, while recording losses of around CFA15 billion per year, or over CFA75 billion in unbilled distributed energy and unpaid billed energy over the last 5 years”.

Continuity of service in the face of insecurity has been maintained, thanks to the good condition of distribution lines and transformers. As of the end of 2022, the availability rate stood at 84% in the South-West region and 80% in the North-West.

However, as the company points out, the above-mentioned condition of the distribution network and transformers during the period under review contrasts with the deterioration of other electrical equipment installed in this part of Cameroon.

Vandalized equipment

Many out-of-service facilities are primarily concentrated in what are termed “red zones,” where approximately 50% of infrastructure in the South-West and 80% in the North-West are affected. These facilities have fallen victim to vandalism or natural deterioration. Efforts to rehabilitate these structures are underway, taking into consideration safety measures.

Eneo is working with both willing residents and the authorities. The risk to field teams is permanent. “It is in this context that network extension work (some twenty kilometers more in the Fako region) and the reconstruction of destroyed networks have been carried out”, the company said.

The Anglophone crisis has been a burden on businesses operating in the affected regions. Many of them have experienced vandalism of their equipment and have had their employees abducted, subjected to violence, and even killed. Faced with this climate of insecurity, numerous economic operators have had to relocate their activities. Others, like the CDC, a state-owned agro-industrial unit and the second-largest employer in the country after the central administration, had to temporarily suspend their operations. However, they have gradually resumed activities following an observed period of calm on the ground.

According to government estimates, the crisis led to a national loss of 0.8 percentage points of GDP growth in 2019 and 0.3 percentage points in 2020. “These growth point losses correspond to a cumulative real loss in national GDP of CFA421.3 billion between 2017 and 2020,” said the Minister Delegate to the Minister of the Economy, Paul Tasong, while addressing the members of parliament on November 23, 2021. He was presenting the Reconstruction Plan for the North-West, South-West, and Far North regions. Similarly, due to this crisis, the value of trade between Cameroon and Nigeria between 2015 and 2019 decreased from CFA15.6 billion to CFA2.9 billion, representing an 81% decline. “These declines are observed in both exports (-68.9%) and imports (-85%),” Paul Tasong explained.

Source: Business in Cameroon

18, October 2023

The flow of Chinese investment in Cameroon is expected to strengthen ⁰

The Cameroonian Ministry of Finance issued a note Tuesday informing of the signing of a new cooperation deal with China. The document, signed as part of a visit by Minister Louis Paul Motazé to Beijing, aims to “eliminate double taxation on income and prevent tax evasion and avoidance.”

According to the Organization for Economic Co-operation and Development (OECD), double taxation, recognized as a barrier to trade and investment between countries, “arises when comparable taxes are imposed in two or more states on the same taxpayer in respect of the same taxable income or capital, e.g. where income is taxable in the source country and the country of residence of the recipient of such income.” To avoid this practice, which experts believe hampers international trade, cross-border investment, and the movement of people, states generally signs tax treaties.

National Development Strategy 2020-30

The Ministry of Finance revealed that the new agreement between Cameroon and China is the fruit of “a long negotiation process that began in 2013”. It marks “a decisive step in the implementation of the National Development Strategy 2020-30 (SND30) and towards the emergence of our country by 2035″. “Since China is one of Cameroon’s leading economic and trade partners, it was necessary to negotiate a tax agreement to remove tax obstacles to trade between the two countries, in particular the double taxation of companies operating in both countries,” the ministry explained.

Over the past two decades, China has become Cameroon’s leading customer (25.8% market share in 2021, according to the INS) and supplier (17.5% market share in 2020) as well as a leading investor. According to data contained in the 2021 World Investment Report published by UNCTAD, the stock of foreign direct investment (FDI) captured by Cameroon between 2000 and 2020 is estimated at $9,026 million (CFA 5,434.3 billion), mainly thanks to China. “Between 2000 and 2014, Cameroon captured CFA 2,750 billion in foreign direct investment, including CFA 1,850 billion from China. This represents around 67% of FDI entering Cameroon”, points out a document from the Presidency of the Republic, citing UNCTAD data.

The Cameroonian government seeks through the new agreement with China to further enhance the existing level of economic cooperation with the Asian country. “This agreement will undoubtedly boost trade between Cameroon and China, and attract even more Chinese investment to Cameroon,” the Finance Ministry said.

New mining projects in the pipeline?

The signing of this tax agreement occurs at a time when the Cameroonian government is embarking on several mineral exploitation projects, many of which are of significant interest to China. One such project is the Mbalam-Nabeba mining project, a world-class iron ore deposit spanning Cameroon and Congo.

Cameroon has chosen Bestway Finance, an investment vehicle allied with China’s AustSino, to build the railroad that will make the deposit exploitable. The license to mine the deposit was awarded on August 17, 2022, to Cameroon Mining Company, also linked to Bestway Finance, which recently announced agreements with at least four Chinese companies for the project. At the Lobé iron ore deposit in Kribi, in the southern region of Cameroon, China’s Sinosteel was awarded the operating license signed on July 1, 2022.

By inking this agreement with China, Cameroon now has 15 double taxation treaties and two global multilateral agreements. On a bilateral basis, these include agreements signed with France (1976), Canada (1988), Switzerland (1990), Tunisia (1999), Morocco (2012), South Africa (2015), the United Arab Emirates (2017), Germany (2017), the Czech Republic (2023) and the six Cemac member countries. However, these agreements do not always guarantee an increase in FDI for Cameroon. For example, despite signing the agreement with the United Arab Emirates in 2017, the first investment from that country has yet to materialize.

Source: Business in Cameroon

14, October 2023

IMF agrees funding boost, extra Africa board seat ⁰

The IMF announced Saturday member nations agreed to increase their contributions to the global lender and give sub-Saharan Africa a third seat on its executive board at its first meetings on the continent since 1973.

Boosting the International Monetary Fund’s quota resources and giving Africa a bigger voice within the institution were among the priorities of the week-long talks of the IMF and World Bank in Marrakech, Morocco.

Spanish Economy Minister Nadia Calvino, who chairs the IMF Financial Committee, said at a press conference that there was “agreement on a meaningful increase of quotas by the end of the year.”

The quotas, which are based on the size of a country’s economy, determine how much funding a nation should provide to the IMF, its voting power and the maximum amount of loans it can obtain.

IMF chief Kristalina Georgieva and World Bank President Ajay Banga used this week’s meetings to urge members to step up funding so their institutions can better support nations hit by poverty and climate change.

The conflict between Israel and Palestinian militant group Hamas has raised concerns about its impact on already weak global economic growth in the wake of the Ukraine war, elevated inflation and high interest rates.

Georgieva said the agreement on quotas was “very heartwarming.”

The goal, she said, was “to make the fund strong financially in terms of our ability to step up should we be hit by yet another shock.”

Asked when the IMF will change its voting shares, Georgieva said: the “membership has agreed that this is going to be the next step and that there will be a clear pathway and plan to go there.”

Giving countries like China, which is now the world’s second biggest economy, a larger voting share has been a controversial issue.

China has a 6.08 percent share of votes compared to 6.14 percent for Japan, the third global economy.

“At some point, a revision of the IMF’s quota distribution will be inevitable,” French central bank governor Francois Villeroy de Galhau said in Marrakesh on Wednesday.

“But the emerging countries that will benefit from this — including China — will have to accept common rules of the game,” he said.

While voting shares were not changed, the IMF agreed to expand its executive board from 24 to 25 members to give Africa another seat.

Sub-Saharan Africa will now have three executive board members instead of two.

“I will finish with what warmed my heart the most: uniform support for a third African chair on our executive board,” Georgieva said.

“That is so important for meetings that take place on African soil,” she said.

“Despite all the difficulties I can only praise our members for finding this pathway to solidarity on which hundreds of millions of people depend.”

Source: AFP

4, October 2023

World Bank Expects Solid Growth but Risky Outlook for South Asia ⁰

South Asia is expected to grow by 5.8% this year—higher than any other developing country region in the world, but slower than its pre-pandemic pace and not fast enough to meet its development goals, says the World Bank in its twice-a-year regional outlook.

Released today, the latest South Asia Development Update, Toward Faster, Cleaner Growth forecasts growth to slow to 5.6% in 2024 and 2025, as post-pandemic rebounds fade and a combination of monetary tightening, fiscal consolidation, and reduced global demand weigh on economic activity.

Growth prospects are subject to downside risks, including due to fragile fiscal positions. Government debt in South Asian countries averaged 86% of GDP in 2022, increasing the risks of defaults, raising borrowing costs, and diverting credit away from the private sector. The region could also be affected by a further slowdown in China’s economic growth and natural disasters made more frequent and intense by climate change.

“While South Asia is making steady progress, most countries in the region are not growing fast enough to reach high-income thresholds within a generation,” said Martin Raiser, World Bank Vice President for South Asia. “Countries need to urgently manage fiscal risks and focus on measures to accelerate growth, including by boosting private sector investment and seizing opportunities created by the global energy transition.”

In India, which accounts for the bulk of the region’s economy, growth is expected to remain robust at 6.3% in FY23/24. Output in Maldives is expected to grow by 6.5% in 2023 and in Nepal is expected to rebound to 3.9% in FY23/24, thanks to the strong rebound in tourism in both countries. Several countries in the region are still suffering from the aftermaths of recent currency crises. In Bangladesh, growth will slow to 5.6% in FY23/24. In Pakistan, growth is forecast at only 1.7% in FY23/24, below the rate of population growth. Sri Lanka is showing signs of recovery after a severe recession and the economy is expected to grow by 1.7% in 2024, after contracting by 3.8% in 2023.

Constrained by fiscal challenges, governments have limited room to help their economies fully capitalize on the global energy transition. Though often seen as an additional burden for developing countries, for South Asia, the energy transition could present an opportunity for future growth and job creation—if it leads to more investments by firms, cuts air pollution, and reduces the reliance on fuel imports. Even with limited fiscal space, countries can encourage firms to adopt more energy-efficient technologies through market-based regulations, information campaigns, broader access to finance, and reliable power grids.

“South Asia’s energy intensity of output is about twice the global average and the region lags in the adoption of more advanced energy-efficient technologies,” said Franziska Ohnsorge, World Bank Chief Economist for South Asia. “Improvements in energy efficiency, in the context of a rapid global energy transition, are an opportunity for South Asia to make progress toward both environmental and economic goals.”

The energy transition will also have significant impacts on South Asia’s labor markets. Almost one-tenth of the region’s workers are employed in pollution-intensive jobs. These jobs are concentrated among lower-skilled and informal workers who are more vulnerable to labor market shifts. While the energy transition can help create more new jobs, it could also leave some workers stranded in declining industries. The report recommends a wide range of policies to protect such workers, including providing better access to high-quality education and training, finance, and markets; facilitating worker mobility; and strengthening social safety nets.

Culled from the World Bank

1, October 2023

CPDM Crime Syndicate: BEAC governor calls for vigilance against counterfeit banknotes ⁰

Only a few months after their release, forgers have already found a way to make the counterfeit versions of the new range of banknotes put into circulation on December 15, 2022.

Pending the dismantling of the counterfeiting network, Beac Governor Abbas Mahamat Tolli (pictured) called on the population to be more vigilant when handling these banknotes. “I invite users to be very careful every time they make transactions, and to make sure that the bills they receive are genuine”, he said at the end of the FY2023 third session of the Monetary Policy Committee (CPM), held on September 25 in Douala.

Abbas Mahamat Tolli pointed out that the new range of banknotes currently in circulation contains several security features that enable users to detect the real from the fake. “So far, there hasn’t really been a forgery that we’re afraid of. And the level of forgery is very minimal. People are not very vigilant”, he continued.

Indeed, the banknotes put into circulation on December 15 feature numerous security features, between nine and eleven in all, depending on the denomination. These features are visible and sometimes invisible to the naked eye. A special feature of these bills is that they can be identified by the visually impaired, thanks to tactile lines, which can be felt when touched, depending on the notes.

Source: Business in Cameroon