(Business in Cameroon) - In the aftermath of the May 31, 2019, fire outbreak at Société nationale de raffinage (Sonara) in Cameroon, the Central African countries’ banking commission (Cobac) published an analysis on the said company it qualifies as "grandstanding”.
According to the commission, the suspension of the activities of Sonara has a great impact on defaulted debts in Cameroon.
“The estimate of gross credits granted to Sonara was XAF119.3 billion at end April 2019, representing 3.3% of the volume of overall credits. Let’s suppose that Sonara is unable to face its financial commitment due to the suspension of its activities, despite the about XAF87 billion deposit at end April 2019, for urgent cases mainly, the volume of defaulted debts in the Cameroonian banking system would be 19.6% instead of 16.2% at end April 2019,” Cobac writes. This shows a greater worsening of the client portfolio, the institution adds.
The commission’s analysis is not reassuring for a sector where the defaulted debts owed to commercial banks in Cameroon in 2016 was XAF489 billion. Worse, with XAF106 billion defaulted debts in the microfinance sector in 2017, Cameroon concentrated 79% of the overall bad debts within CEMAC at the time.
Let’s note that Sonara is the main refinery in Cameroon with a yearly production capacity of 2.1 million tons of crude oil.