Despite resuming operations in 2020 after a suspension in September 2018 due to the Anglophone crisis, CDC continues to struggle with paying its employees’ salaries. This challenge persists despite various financial support from the state, the sole shareholder of the company.

“The operational challenges faced by CDC do not allow it to honor its financial commitments. There is a notable overall increase in its debt… For social debt, the increase is linked to the evolution of salary arrears as of December 31, 2022, by 17.78%, despite state support, as well as the accumulation of unpaid social security contributions increasing by 15%. As of June 30, 2023, salary arrears stand at CFA35.7 billion, and the social debt to the National Social Security Fund (CNPS) is CFA26.7 billion,” reveals the report on the situation of public and parastatal enterprises in 2022 recently published by the Technical Commission for the Rehabilitation of Public and Parastatal Sector Enterprises (CTR). This equates to approximately 17 months of accumulated salary arrears, given a monthly payroll estimated at CFA2 billion according to official figures.

CDC recorded cumulative losses of CFA38.7 billion between 2019 and 2021, according to CTR data. This made it the local company bearing the heaviest burden of ongoing separatist demands in the Northwest and Southwest regions. In 2018, for instance, 12 production sites out of the company’s 29 were completely halted due to insecurity created by separatists in the plantations. The separatists even transformed some of these sites into bases for their armed militias, resulting in the killing and severe injury of several workers.

This challenging situation officially led to the loss of 6,124 jobs out of the more than 22,000. Job losses likely increased during 2022 due to the precarious situation of the CDC. “There is an increasingly significant staff turnover, despite government subsidies allocated for partial salary payments,” reveals the CTR report.

Source: Business in Cameroon

Cameroon’s inflation rate over the past year averaged 7.5% in November 2023, according to information released by the national statistics agency INS.

Although this indicator is down by 0.2% compared to October 2023’s 7.7%, it still represents more than double the 3% threshold tolerated in the Cemac. According to the document, inflation rates remain above 7% in 9 out of 10 regions in the country, with the highest recorded in Bertoua (East) at 8.9%. Bamenda, the regional capital of the Northwest, has the lowest rate at 6.1%, but it still surpasses the community norm.

INS explains that this inflation mainly stems from “an 11.6% increase in food product prices, a 13.8% rise in transportation costs, and a 7.7% increase in the prices of furniture, household items, and everyday maintenance products.” However, the stats agency notes that food inflation has decreased by 0.4% during the period under review, following the decline in the prices of bread and cereals (-1.1%), fish and seafood (-1.1%), oils and fats (-1.1%), as well as vegetables (-0.4%). On the other hand, meat and fruit prices increased during the same period, by 0.6% and 1.9%, respectively. For non-food products, the decrease only concerns alcoholic beverages, tobacco, and narcotics (-0.1%).

In the 2024 budget, the Cameroonian government anticipates that inflation will decrease to 4% next year, compared to 6.7% at the end of December 2023, although this rate remains above the community threshold. In response to the inflationary situation, the Bank of Central African States (BEAC) tightens liquidity in banks through repeated increases in its main policy rates, suspension of liquidity injection operations into the CEMAC banking system, and intensification of liquidity absorption operations from banks. However, BEAC acknowledges that only 20% of inflation is of monetary origin.

Source: Business in Cameroon

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

A sharp rise in the price paid for cocoa beans has boosted the incomes of farmers in Cameroon as top global producers Ivory Coast and Ghana suffer a supply shortage this season.

Several farmers told Reuters that they have been selling their beans at prices ranging from 2,000 to 2,200 CFA francs ($3.67) per kilogram, up from 750 to 1,290 CFA francs/kg last season.

New York cocoa futures rose to a 46-year high on Monday as crop problems in West Africa tightened global supplies. Ghana cocoa port arrivals are down around 50% year-on-year so far this season, while Ivory Coast’s are down more than 35%.

Cameroon is not expecting a similar drop in production. It targets around 300,000 metric tons of cocoa annually, making it the world’s fourth biggest producer in recent years.

“I have made much more money from cocoa sales, which has enabled me to clear an overdue loan,” said Susan Itoe, a cocoa farmer near Konye in the South West region.

Cameroon’s guaranteed cocoa farmgate price for the 2023/24 season was set at 1,500 CFA francs/kg. But the actual prices paid to farmers are flexible depending on the market and have risen even higher.

In Ivory Coast and Ghana, by contrast, prices are fixed for the entire season.

“Cameroon is benefiting from the malaise of Ghana and Ivory Coast following flooding and cocoa swollen shoot virus,” said Epie Promise Ngolepie, a cocoa consultant at agri-tech company Help Farmers Cameroon, who told Reuters that prices were expected to fall by 2025 as production picks up again in West Africa.

The high cost of inputs and high cost of transporting the produce due to bad roads were, however, eroding the gains, he added.

“Price has always been our problem… So this increase is well appreciated especially as we have improved the quality of our cocoa,” said Esapa Patrick Enyong, president of the South West Farmers’ Cooperative Union, which groups thousands of farmers in the country’s largest cocoa production basin.

Cameroon was recently added to Annex ‘C’ of the International Cocoa Agreement, which places it on the list of countries producing fine flavoured cocoa.

The liberalisation of the country’s cocoa trade since the 1990s has also contributed to the higher prices, said Michael Ndoping, General Manager of the National Cocoa and Coffee Board (NCCB).

“All these factors put together make the cocoa trade these days very encouraging and we hope this will last for some time,” Ndoping said.

Source: Reuters

Cameroon’s President Paul Biya opposes the privatization of the country’s incumbent telecoms operator, Camtel. The decision was the subject of a letter addressed on December 4, 2023, by the Secretary-General of the Presidency (SGPR) to the Minister of Finance (Minfi).

Ferdinand Ngoh Ngoh instructs Minister Louis Paul Motazé, also the president of the Interministerial Committee for the Rehabilitation of Public and Parastatal Enterprises, to suspend any rehabilitation plan aiming at privatizing Camtel or any segment of its operations. The SGPR’s letter follows Minister Motazé’s appearance before the National Assembly’s Finance and Budget Committee on November 15, 2023, where he defended the 2022 budget settlement. Responding to questions about Camtel’s underwhelming performance compared to other telecom operators, the Finance Minister revealed the government’s intention to restructure the telecom giant into three entities, forming a holding.

“Referring to Camtel’s low level of competitiveness, given the dynamism observed in the telecommunications sector, the Finance Minister acknowledged that the company’s performance was not up to expectations. For this reason, an inter-ministerial committee has been set up to examine the restructuring of the company. The government is currently considering how to improve the company’s performance. It is envisaged that the company will be transformed into a holding company made up of three entities”, reads the report on the work of the National Assembly’s Finance and Budget Committee, on the defense of the 2022 Settlement Act by the Minister of Finance.

The report also mentions the plan to alleviate the significant burden on Camtel, including its 4,000 employees and a heavy debt of CFA600 billion. However, the minister did not explicitly mention privatization during his presentation to the deputies.

Furthermore, sources close to Camtel’s rehabilitation discussions disclosed that a ministerial-level meeting took place to address the alarming situation of Camtel. Representatives from the Ministry of Posts and Telecommunications (Minpostel), the Ministry of the Economy (Minepat), and Camtel’s Director-General were present alongside the Minister of Finance (Minfi) and a representative from the Presidency. Contrary to claims of privatization, major proposals focus on reinforcing the autonomy of business units (fixed, mobile, transport) under Camtel, reducing staff, and addressing the substantial debt.

Since 2020, Camtel has held three licenses, covering the operation of electronic communications transport networks, fixed communications networks, and mobile networks. The Finance Minister’s revelation of the transformation project into a holding with three subsidiaries corresponds to the specifics of these licenses.

In response to the President’s opposition to privatization, discussions arise about the suggested holding structure. A holding, or “mother company,” can have its assets predominantly or wholly owned by the state or its entities, maintaining the company in the public domain. However, assets in both the holding and its subsidiaries could also be majority or wholly owned by private operators, aligning with the concept of privatization.

This proposed option, which the President opposes according to the SGPR’s letter, appears more reassuring to many telecom operators in Cameroon. Critics argue that Camtel, operating as a wholesaler managing infrastructure leased by other actors, competes directly with retailers, such as mobile operators and internet service providers.

A 2017 report entitled “Cameroon Economic Memorandum” by the World Bank supports this perspective, suggesting the government ends the monopoly of companies like Camtel and Bolloré in sectors producing essential inputs for other activities. During a workshop in March 2017 in the Cameroonian capital on determining reforms for improving the competitiveness of the ICT sector in Cameroon, the World Bank recommended transforming Camtel into a holding with two entities: one controlled by the state, managing infrastructure and fixed telephony networks; and another dedicated to mobile services and the marketing of home fiber optics, open to private investors.

Source: Business in Cameroon

The Cameroonian government is launching a mobile app for non-intrusive air passenger control. In a December 1 statement, Edwin Fongod Nuvaga, the Director-General of Customs, said the “Douane Cmr” in French or “Customs Cmr” in English app is set to go live on January 1, 2024, and will be available for download on Google Play and the App Store.

The app will replace the traditional paper forms handed out to travelers by airlines. The Customs Department encourages all passengers heading to Cameroon to promptly download this application. Through this user-friendly platform, travelers will now validate and systematically submit their declarations using an electronic questionnaire before landing at Cameroonian airports.

Passengers will be required to provide details such as their travel number, passenger identity, passport number, details of goods or luggage carried, currencies, and any other relevant information. Customs officials explain that storing these declarations on passengers’ phones will generate a reference number in the form of a QR code. This code will be remotely scanned by customs agents upon arrival for necessary checks.

The Customs Department emphasizes that this new free service aligns with the goal of streamlining exchanges and simplifying customs procedures. It aims to expedite customs operations and combat fraudulent activities.

Source: Business in Cameroon

The Board of Directors of the African Development Bank Group on 29 November 2023 granted financial support of EUR 73.44 million to Cameroon for the construction of a bridge over the River Ntem, which forms a natural boundary with Equatorial Guinea. The bridge building is part of the Regional Trade and Transport Facilitation Project for the economic corridor between Cameroon, Equatorial Guinea and Gabon.

The financial support consists of two separate loans: the first, of EUR 48.96 million, from the African Development Bank and the second, of EUR 24.48 million, from the African Development Fund, the Bank Group’s concessional loans window.

The new bridge, which will link Campo, in Cameroon to Rio Campo, in Equatorial Guinea, will not only improve the service level for the transport logistics chain along the corridor between Yaoundé, Bata and Libreville, but will also contribute to the emergence of an industrial-port activities hub in the area between the deep-water port in Kribi (Cameroon) and its counterpart in Bata (Equatorial Guinea).

In practical terms, the project will contribute to increasing the volume of trade between the two countries; reducing travel time, shipping and transport costs along the Yaoundé-Bata-Libreville multinational corridor; creating favourable conditions for promoting an industrial-port activities hub in the same area, and improving the living conditions of various populations, including women, young people and vulnerable groups in its area of influence.

Implementation of the project is due to start in December 2023, with completion scheduled for November 2028.

Source: AFDB

During its second trading day on November 24, 2023, 24 hours after being listed on the Central African Securities Exchange (Bvmac), the Cameroon government’s multi-tranche bond for 2023-2031 recorded no transactions.

According to the official market bulletin published by the Cemac Unified Financial Market, various investors expressed interest in acquiring 700 of these bonds during the trading session.

However, the bondholders refrained from selling them. This cautious reaction from Cameroon’s bondholders, according to market observers, may stem from the purchase price (CFA10,000), which currently does not yield any profit for the holder compared to its initial value. The refusal to sell the bond, despite the relatively modest demand (only 700 bonds out of 17.6 million), reflects a certain confidence in the bond, which has just begun trading on the Bvmac and could potentially increase in value over subsequent trading days.

On the first trading day (November 23, 2023), the bondholders used the same approach. In that inaugural session, as revealed by the Bvmac’s official bulletin, 892 bonds were traded out of a demand for 1,592. A reliable source indicates that this trading volume is more related to the commitment of brokerage firms to contribute to the excitement of the very first listing rather than a genuine desire to sell the securities involved.

During the trading sessions on November 23 and 24, 2023, all the purchase offers for bonds that were made and subsequently refused by bondholders concerned longer maturity values (7 years). This is further proof that despite the long maturity period, holders of this category of securities remain confident in the stock’s upward trend in the market.

First time in the Cemac Region

As a reminder, the 2023-2031 bond issuance is the 7th such operation successfully carried out by Cameroon on the sub-regional financial market and the first with multiple tranches experienced in the Cemac zone. Cameroon embarked on this experiment due to increasingly challenging market conditions, with high interest rates resulting from the tightening of monetary policy by the central bank.

This type of operation allows investors the flexibility to subscribe to longer maturities at higher interest rates or shorter maturities at lower interest rates. This flexibility offered to subscribers undoubtedly contributed to the success achieved by Cameroon in this operation, during which the government was able to raise more than the targeted CFA150 billion.

Investors holding these Cameroonian bonds, who do not wish to hold them until maturity, can now sell them on the financial market for cash. Transactions may result in a capital gain or discount, depending on the interest investors show (demand) in the market during trading sessions.

Source: Business in Cameroon

Fitch Ratings has altered Cameroon’s outlook from stable to negative while maintaining its long-term foreign-currency issuer default rating at the “B” level.

The adjustment in outlook is attributed to rising liquidity pressures arising from heightened spending requirements, as well as challenging conditions in both domestic and external market financing, as stated in a statement by the rating agency on Friday.

Furthermore, Fitch highlighted structural deficiencies in public finance management and noted the country’s exposure to downside risks in the budget balance stemming from political and social pressures as contributing factors to the outlook revision.

“It was revealed in July that the authorities were late in making external debt service payments to one commercial creditor on four occasions between January and November 2022, underscoring weak debt management capacity and the extent of liquidity pressures,” the report mentioned.

Fitch anticipates that Cameroon will maintain a moderate budget deficit of 1.3 percent of GDP in cash terms in 2023 and 1.4 percent in 2024.

Despite this, the rating agency projects an increase in real GDP growth, reaching 3.8 percent in 2023 compared to 3.6 percent in 2022. Additionally, Fitch foresees a further rise to 4.1 percent in 2024 and 4.4 percent in 2025.

Source: MENAFN