Business

23, April 2024

Douala: Investment Forum wraps up with honors for investment champions ⁰

The 4th edition of the Cameroon Investment Forum (CIF), hosted by the Investment Promotion Agency (API), concluded on April 19 in Douala with the “Investors’ Night.” During this event, seven companies, administrations, and institutions were honored for their contributions to promoting investments in Cameroon. Shinwinsoh Boma Donatus, the acting CEO of API, kicked off the awards ceremony by presenting the Best Investment Advisory Firm in Cameroon award to the Cameroonian firm JMJ Africa.

Led by Cameroonian legal expert, banker, and financier Patrice Yantho, JMJ Africa has played a key role in major investment projects in Cameroon in recent years. This includes involvement in projects like the construction of cocoa processing plants Neo Industry and Atlantic Cocoa, the Douala Grand Mall, the Pafic soap factory, and the Novia Industries plant, a producer of refined oil, soaps, and other food products based in the Douala-Bonabéri industrial zone. JMJ Africa, which was also involved in the Société International de ciment (SIC) project being developed in the Kribi industrial port zone and owned by Ivorian billionaire Kone Dossongui, is also advising steel giant Prometal Groupe.

Prometal Groupe, the leader in steel processing in Central Africa, received an award at the ” Investors’ Night “. Founder Hayssam El Jammal received the Foreign Investment Champion Award in Cameroon. With a long-standing presence in the country, Prometal Group currently operates six factories (three built in the last five years) for steel processing and agro-food product manufacturing in the industrial zones of Bassa and Bonabéri (Douala). The group is currently finalizing plans for Proalu, its 7th factory, dedicated to aluminum processing.;

Cameroonian businessman Albert Kouinché was awarded the National Investment Champion Award. As the founder of Express Union, a company dominating the domestic money transfer market with a presence in the Central African sub-region, Albert Kouinche is currently leading an industrial aquaculture project (Fish&Co), aiming to reduce Cameroon’s heavy reliance on imported frozen fish. As a shareholder of Banque Atlantique Cameroun, this investor also controls the Cameroonian Equipment Company (SCE), a financial institution providing credits to clients for purchasing goods and small household equipment.

Ecogreen was honored with the Innovation in Investment Award. Specializing in plastic waste recycling, this company is led by Nassrallah El Sahely, who also heads Source du Pays, a leading mineral water brand. Cameroonian bank Afriland First Bank, a market leader ahead of foreign multinational subsidiaries, received the award for Best Financial Institution in Investment Support.

In addition to private entities, a public administration, and an international institution also received awards during the event. The General Directorate of Customs at the Ministry of Finance received the award for Best Institutional Support, while the United Nations Industrial Development Organization (UNIDO) was honored as the Best Development Partner.

Source: Business in Cameroon

19, April 2024

CPDM Crime Syndicate repays CFA39.8bn debt with new borrowings ⁰

On April 17, Cameroon reimbursed CFA39.8 billion on the public securities market of the Central African States Bank (BEAC). Renowned for its solvency since the establishment of this market nearly 13 years ago, Cameroon used its usual borrowing strategy to make this repayment.

To this end, two new issuances of fungible Treasury bills (BTA) were carried out on April 15, two days before the repayment date. These issuances, consisting of securities with maturities of 26 weeks for CFA40 billion and 52 weeks for CFA25 billion, raised CFA49.4 billion from investors. This sum not only covered the due repayment but also generated a cash surplus of CFA10 billion for Cameroon.

The interest rates applied in these operations reflected the increasing tension in the market, which has seen its requirements rise over the months due to a restrictive monetary policy. Cameroon offered an average interest rate of 6.3% on the 26-week BTAs and 6.5% on the 52-week ones. The rates are significantly higher than the 3% ceiling commonly practiced by the Cameroonian Treasury on these securities a few years ago.

Source: Business in Cameroon

18, April 2024

Cocoa Farmer Household Income New Methodology: Any hope for African farmers? ⁰

The World Cocoa Foundation (WCF) on April 3, 2024, announced the launch of an important new methodology for measuring cocoa household income and living incomes. Led and funded by WCF and the German Federal Ministry for Economic Cooperation and Development (BMZ) in collaboration with the German Development Cooperation (GIZ) and the Swiss Platform for Sustainable Cocoa (SWISSCO), the methodology is expected to go a long way in help experts and actors in the cocoa sector gain a better understanding of the impact of sustainability interventions on cocoa farmer households and the environment.

The methodology was delivered by Wageningen University & Research (WUR) and the Royal Tropical Institute (KIT) who partnered with the Centre Ivoirien de Recherches Economiques et Sociales (CIRES) and Etudes de Marché et Conseils (EMC) from Côte d’Ivoire. Until recently, there has not been any authoritative way to measure cocoa farmer household income across the sector, yet accurately measuring cocoa farmer household income is key to understanding the impact of sustainability interventions on cocoa farmer households and the environment.

Existing methods still struggle to account for the costs of cocoa production and to capture non-cocoa income whilst data gathered by individual companies offers a picture based solely on their direct supply chains – leaving cocoa growers, especially in African countries where data does not drive processes and there are no organized systems, in the indirect supply chain underrepresented. Individual data gathering by companies and other institutions also currently relies on a variety of different methods.

This new methodology solves many of these challenges and offers a standard that can be applied to all future studies, research and data collection to make them more widely comparable and better representative of the sector as a whole. It includes groups that have not been intensively involved in sustainability interventions in the past as well as underrepresented groups such as sharecroppers, women and cocoa farmers on the African continent who are not in the indirect supply chain.

It also includes robust means of collecting data on diversified household income that does not stem from cocoa. The methodology was completed with inputs from numerous stakeholders across the cocoa sector including the Alliance on Living Income in Cocoa (ALICO), Living Income Community of Practice (LICOP), representatives from producing country governments, NGOs and civil society organizations and WCF member companies. It is designed to determine the living income status of cocoa farming households and the impact of sustainability interventions on household incomes. These two elements are essential to defining and aligning stakeholders’ efforts around the interventions that are most effective.

“To understand what works in helping raise cocoa farmers’ incomes we first need to be able to consistently measure how activities affect those incomes,” said Michael Matarasso, WCF Director of Monitoring and Evaluation. “This methodology gives everyone in the sector a firm foundation to stand on and will help us to drive collective progress to improve cocoa farmers’ incomes.”

As the second phase of this collaboration, WCF, GIZ and SWISSCO will use this methodology to conduct baseline studies on cocoa farmer household income in three landscapes in Côte d’Ivoire. WCF will implement an income study in the Yapo Abbé Forest, GIZ in Bossématié whilst SWISSCO plans to deliver a cocoa household income study in the Cavally Forest Reserve in having recently completed an income study in Ghana aligned with this new measurement methodology. Similarly, other academic institutions, companies and government agencies can use the methodology in their own research and data collection, reinforcing a common standard for the entire industry.

“This methodology is important as it enables evidence-based policy and intervention design based on the analysis of good quality data for different household groups. We hope that it contributes to greatly reducing or closing the living income gaps of farming households,” said Yuca Waarts, Senior Researcher at Wageningen University & Research.

Lisa Kirfel-Rühle, overseeing cocoa supply chains at BMZ, emphasizes the significance of the methodology, stating: “Through this methodology, we and our partners advocate for standardized high-quality income data of cocoa farmers to strengthen political discourse, whether past interventions have been sufficient to ensure decent incomes for cocoa farmers in Côte d’Ivoire or whether we still have to address imbalances in value chain distributions.”

“Helping cocoa farmers succeed requires everyone in the cocoa sector to work together. Therefore having a common methodology to measure and compare the income of cocoa farmer families is important to accurately understand their economic situation,” said Nicoletta Lumaldo, Manager Innovation and Member Engagement at SWISSCO.

The new methodology measuring cocoa farmer household income is the result of several months of work and deep collaboration among all the organizations involved.

Culled from WCF By Cecilia M. Manjang

18, April 2024

4th Cameroon Investment Forum opens in Douala ⁰

The 4th edition of the Cameroon Investment Forum, a flagship biennial event that brings together high-level government officials, development partners, and various business stakeholders from around the world, opened on Wednesday in the commercial hub of Douala.

Organized by the state-run Cameroon Investment Promotion Agency (CIPA), the forum aims to intensify the import substitution dynamic in Cameroon by mobilizing and directing investments into niche sectors such as rice, maize, fish, milk, and palm oil, said CIPA Acting General Manager Donatus Boma.

“It is a platform for high-level consultations and exchange of experiences. It is an excellent opportunity for investors to understand why Cameroon is an investment destination,” Boma said during the opening ceremony, which was attended by African, Chinese, Russian, and European investors.

“The main objective is to encourage local investors and attract foreign direct investment in products aimed at increasing local production and processing. This initiative should help reduce Cameroon’s deficit caused by the importation of staple foods in large quantities,” he added.

The forum, held after years of postponement due to the COVID-19 pandemic, will end on Friday.

Source: Xinhuanet

15, April 2024

Cameroonian beer and soft drinks exports soar by 73% and 46.6% in 2022 ⁰

Cameroon’s brewing companies saw a significant boost in their beer exports in 2022. According to data from the National Statistics Agency (INS), exports surged by 73% over the period to 12,602 tons, bringing in a total of CFA5.7 billion. The previous year, beer exporters sold 7,285 tons of beer and collected CFA3 billion.

Soft drink shipments have followed a similar trend. INS reported that these beverages generated CFA3.5 billion in 2022, from exports totaling 7,124 tons. This represents increases of 46.6% in volume and nearly 61% in revenue compared to 2021, when the country exported 4,860 tons for CFA2 billion.

Although neighboring countries of Cameroon have brewing facilities that are often owned by the same multinationals operating in Cameroon, the beers and beverages from this CEMAC country are highly sought after, especially in countries like Gabon and Equatorial Guinea.

Source: Business in Cameroon

15, April 2024

World Bank says despite high potential, 75 vulnerable economies face ‘Historic Reversal’ ⁰

Despite their high potential to advance global prosperity, one-half of the world’s 75 most vulnerable countries are facing a widening income gap with the wealthiest economies for the first time in this century, a new World Bank report has found. Taking full advantage of their younger populations, their rich natural resources, and their abundant solar-energy potential can help them overcome the setback.

The report, The Great Reversal: Prospects, Risks, and Policies in International Development Association Countries, offers the first comprehensive look at the opportunities and risks confronting the 75 countries eligible for grants and zero to low-interest loans from the World Bank’s International Development Association (IDA). These countries are home to a quarter of humanity—1.9 billion people. At a time when populations are aging nearly everywhere else, IDA countries will enjoy a growing share of young workers through 2070—a huge potential “demographic dividend.” These countries are also rich in natural resources, enjoy high potential for solar-energy generation, and boast a large reservoir of mineral deposits that could be crucial for the world’s transition to clean energy.

Yet a historic reversal is underway for them. Over 2020-24, average per capita incomes in half of IDA countries—the largest share since the start of this century—have been growing more slowly than those of wealthy economies. This is widening the income gap between these two groups of countries. One out of three IDA countries is poorer, on average, than it was on the eve of the COVID-19 pandemic. The extreme-poverty rate is more than eight times the average in the rest of the world: one in four people in IDA countries struggles on less than $2.15 a day. These countries now account for 90 percent of all people facing hunger or malnutrition. Half of these countries are either in debt distress or at high risk of it. Still, except for the World Bank Group and other multilateral development donors, foreign lenders—private as well as government creditors—have been backing away from them.

“The world cannot afford to turn its back on IDA countries,” said Indermit Gill, the World Bank Group’s Chief Economist and Senior Vice President. “The welfare of these countries has always been crucial to the long-term outlook for global prosperity. Three of the world’s economic powerhouses today—China, India, and South Korea—were all once IDA borrowers. All three prospered in ways that whittled down extreme poverty and raised living standards. With help from abroad, today’s batch of IDA countries has the potential to do the same.”

More than half of all IDA countries—39 in all—are in Sub-Saharan Africa. Fourteen of them—mainly small island states—are in East Asia, and eight are in Latin America and the Caribbean. In South Asia, all countries except for India are IDA countries. Thirty-one IDA countries have per capita incomes of less than $1,315 a year. Thirty-three are fragile and conflict-affected states.

IDA countries share similar opportunities. The “demographic dividend”—a deep and growing reserve of young workers—is one of them. Abundant natural resources is another. These countries account for about 20 percent of global production of tin, copper, and gold. In addition, some IDA countries possess critical mineral deposits essential for the global energy transition. Because of their abundant sunshine, most IDA countries are well situated to take advantage of solar energy. On average, their long-term daily solar-electricity generation potential is among the highest in the world.

This potential, however, comes with risks that must be managed. To reap the demographic dividend, IDA governments will need to undertake policies to improve education and health outcomes and make sure that jobs are available for the rising number of young people who will enter the workforce in the coming decades. To seize the full potential of their natural-resource wealth, IDA countries will need to improve policy frameworks and build stronger institutions capable of better economic management. All of this will require ambitious domestic policy reforms—and significant financial support from the international community.

“IDA countries have incredible potential to deliver strong, sustainable, and inclusive growth. Realizing this potential will require them to implement an ambitious set of policies centered on boosting investment,” said Ayhan Kose, the World Bank’s Deputy Chief Economist and Director of the Prospects Group. “This means improving fiscal, monetary, and financial policy frameworks and advancing an array of structural reforms to strengthen institutions and enhance human capital.”

IDA countries today have large investment needs. In the poorest of them, closing existing development and infrastructure gaps and building resilience to climate change will require investment that amounts to nearly 10 percent of GDP. The costs of climate disasters have doubled in IDA countries over the past decade: Economic losses from natural disasters average 1.3% of GDP a year—four times the average of other emerging market and developing economies. Such needs will require IDA countries to generate sustained investment booms—the type that boosts productivity and incomes and reduces poverty. Historically, such investment booms have often been sparked by a comprehensive package of policy measures—to bolster fiscal and monetary frameworks, ramp up cross-border trade and financial flows, and improve the quality of institutions. Such reforms are never easy, the report notes. They need careful sequencing and implementation. But previous IDA countries have shown they are possible.

IDA countries will need significant international financial support to make progress and lower the risk of “protracted stagnation,” the report notes. Stronger cooperation on global policy issues—including fighting climate change, facilitating more timely and effective debt restructurings, and supporting cross-border trade and investment—will also be crucial to help IDA countries avert a lost decade in development.

11, April 2024

Biya regime unveils first enclosed gold processing unit in Central Africa ⁰

The Ministry of Mines, Industry, and Technological Development of Cameroon has officially opened the country’s first enclosed gold ore processing unit in the town of Kana, Eastern region. This groundbreaking facility, a first for Central Africa, was announced on April 5 by the acting head of the ministry, Fuh Calistus Gentry. The project, spearheaded by the companies Codias, Yucam, and Xin Wang, represents a significant leap in mining technology and practices within the region.

Boasting a maximum processing capacity of 500 tons of ore per day, the innovative gold processing system set up at the Shunda Mining site is expected to increase production efficiency to over 90%, boost national reserves, and ensure greater transparency in actual production figures. In addition to being profitable for both the state and operators, it is also lauded for its environmental benefits and as an effective solution to combat child labor in mining operations.

“This system for processing mineralized gravel in a closed tank will significantly reduce the waste of resources, marking a significant change from the precarious situation that currently prevails in the East and Adamaoua regions. It will also significantly reduce the environmental footprint of the mining industry as it is practiced today using methods that are three centuries old,” said Minister Fuh Calistus Gentry, as reported by Cameroon Tribune.

Traditionally, gold ore processing in Cameroon has been done using open systems, which experts say results in a mere 30% average gold recovery rate. This method leads to a 70% waste of resources, which end up being released into the environment. The new system triples the metal recovery rate from 30% to as high as 90% or even 95%. Moreover, what used to be discarded as waste is now seen as a potential deposit for further gold extraction.

The government aims to establish 10 such enclosed system operations across the country. Companies Codias SA, Yucam, and Xing Wang are fully committed to meeting the activity schedule for setting up an enclosed mining system by August 2024 at the Colomine small gold mine project site and at the Batouri-East site for semi-mechanized artisanal mining. Moreover, two more installations are planned at the mining sites in Bétaré-Oya, also in the East, alongside the inauguration of an enclosed system designed by a French company later this month and another by a Canadian company in June 2024.

The government’s goal is to completely abandon artisanal methods. Previously, some semi-mechanized artisanal operators used chemicals like mercury and cyanide for gold recovery, leading to uncontrolled environmental effluent discharge and exposing local populations to heavy metal contamination risks.

In July 2023, Fuh Calistus Gentry urged mining operators to adopt enclosed processing units (or closed circuits) to eliminate any risk of accidental effluent discharge into the environment. On April 5, he reiterated his call for operators in the sector to transition “as soon as possible” to this system or face the withdrawal of their exploration permits. Gentry emphasized that it will no longer be possible to issue a semi-mechanized mining exploitation permit without an enclosed system installation plan or partnership with a company that has such a system. He also gave a six-month deadline for existing permit holders to comply with the new requirement.

Source: Business in Cameroon

11, April 2024

Douala: Célestin Tawamba elected first president of unified business federation ⁰

During the significant electoral meeting on April 9 in Douala, Célestin Tawamba was elected with an overwhelming majority as the first president of the Cameroon Business Consortium (Gecam), garnering more than 98% of the vote. He was the only candidate. Tawamba, who leads Cadyst Invest, takes on the presidency in the aftermath of a highly debated merger. This merger brought together the Inter-Patronal Group of Cameroon (Gicam), the nation’s premier business organization, and the smaller, yet significant, business group Entreprises du Cameroun (Ecam), which itself was born out of dissent within Gicam.

The merger treaty between Gicam and Ecam was signed on April 5, 2023, and ratified on July 11, 2023, amidst attempts by some Gicam members opposed to the merger to block the assembly. These dissenters, who also initiated legal proceedings, suspected Tawamba of seeking to dissolve Gicam for personal gain. Critics argued that Tawamba, having served two terms as the president of Gicam and ineligible for a third term, orchestrated the merger to head the nascent organization.

Despite opposition claims, the decision for a merger-creation rather than a merger-absorption was made, a choice that did not alleviate suspicions surrounding Tawamba’s motives. This led to the establishment of Gecam, effectively dissolving Gicam despite reservations from both the council of elders and the board of the then-leading business organization in Cameroon.

Tawamba has faced criticism since the inception of his merger proposal but maintained that his goal was simply to unify the business community for a more effective representation of corporate interests. On January 29, 2024, in a letter to the members of the newly formed organization, he responded to the widespread call for his leadership, stating, “I must, in truth, confess that there are requests that duty compels one to accept, lest one commits betrayal. Many of you, individually or collectively, have asked me to take my share of responsibility by continuing beyond just the entry point in the process of solidifying this important edifice that we have built together.

As Tawamba takes the helm of Gecam, numerous legal challenges initiated by members of Gicam opposed to the merger, which resulted in Gecam’s creation, are still pending in court.

Source: Business in Cameroon

6, April 2024

BEAC withdraws CFA63bn in a week to curb CEMAC inflation ⁰

The Bank of Central African States (BEAC) has successfully withdrawn a total of CFA63 billion from the banking system in two operations. This move is part of the central bank’s efforts to combat monetary inflation, which accounts for 20% of the inflation in the region.

The first withdrawal operation took place on March 28, when the central bank targeted CFA50 billion through the issuance of 14-day BEAC bonds at a 2.5% interest rate. However, it only managed to attract an offer of CFA15 billion, resulting in a relatively low demand coverage rate of just over 30%.

On April 2, BEAC launched another operation for CFA230 billion but only one bank participated, allowing the central bank to withdraw CFA48 billion at an interest rate of 1.25%. In total, the central bank managed to collect CFA63 billion from commercial banks in a week.

Let’s note that the escalation of liquidity withdrawals, including increasing the amounts sought by the BEAC and issuing BEAC bonds, are among the strategies employed by the CEMAC central bank to fight soaring inflation within the region. In addition to these measures, the BEAC has recently increased its key interest rates multiple times to slow down the refinancing pace of commercial banks and has suspended its liquidity injection operations into the banking system.

The central bank’s goal is to drain the banks and thus restrict economic agents’ access to credit. According to the BEAC, injecting significant financing into economic circuits contributes to inflation, especially in countries like those in the CEMAC region, where most goods and services are imported.

Source: Business in Cameroon

31, March 2024

Yaoundé cuts tax on new tire imports to spur quality use and local production ⁰

The government of Cameroon has announced a 10% reduction in the taxable value of newly imported tires. This move, reported by the Minister of Finance -Louis Paul Motazé, aims to lower the cost of new tire imports into the territory. It is set to last for six months, with the possibility of an extension if required.

Minister Louis Paul Motazé stressed that the decision was taken following “the very high instructions of the Head of State… prescribing additional support measures after pump fuel prices were adjusted,” starting from February 3, 2024. These presidential directives were communicated to him in a letter from Ferdinand Ngoh Ngoh, the Secretary-General of the Presidency of the Republic, dated February 23, 2024.

Beyond the official reasons provided by the Finance Minister, the reduction in the cost of importing new tires in Cameroon also aims to encourage the use of quality tires in the land transport sector. This sector often experiences road accidents caused by the use of poor-quality tires. However, although the decision by Minister Motazé appears to be a temporary measure, it emerges amidst the implementation of an import-substitution policy, which is designed to reduce imports while introducing incentives to foster the development of local production.

In this context, several projects for tire production facilities are in the pipeline. An example is the Cameroon Tyre Factory (CTF), a subsidiary of Neptune Holding owned by Cameroonian business operator Antoine Ndzengué. Currently marketing “Double Star” tires from the German company Double Star Industry, CTF plans to establish a production unit in Bomono, a suburb of Douala, for an investment of CFA400 billion. With an annual production capacity of 4.6 million units, the factory is expected to create about 2,500 jobs.

Such a project could potentially reduce consumer prices for new tires and narrow the country’s trade deficit caused by the massive importation of both new and used tires. According to a report on Cameroon’s external trade by the National Institute of Statistics (INS), the country spent CFA32.6 billion to import 23,164 tons of new tires in 2022. This expenditure represents a decline of approximately CFA1.2 billion from the previous year, as revealed by the INS report.

Furthermore, the INS document disclosed that Cameroon imported 6,596 tons of retreaded or used tires in 2022, costing just over CFA2 billion. The previous year saw imports of 6,913 tons of such tires, amounting to CFA1.8 billion. Contrary to popular belief, the INS data indicates that new tires, despite being more expensive, are more marketed and used in Cameroon than so-called second-hand tires.

Source: Business in Cameroon