(Business in Cameroon) - As of December 31, 2020, the public corporation's non-guaranteed debt was about XAF922 billion, according to the latest report published by the Sinking Fund of Cameroon (CAA). Year-on-year, this debt is down by XAF131 billion compared to the peak of XAF1,053 billion recorded as of December 31, 2019. Nevertheless, the non-guaranteed debt of several public corporations is still undetermined.
The said debt is constituted of XAF452.5 billion incurred from external partners and XAF470 billion from the local banking sector, we learn. A retrospective analysis of that debt shows that in Cameroon, it has been rising exponentially since 2016.
According to CAA data, at end 2016, it was XAF698 billion. At end 2017, it dropped to XAF551 billion and dropped further to 515 billion at end 2018. At end 2019 however, public corporation’s non-guaranteed debt rose almost two folds to XAF1053 billion.
High operating costs
CAA data also shows that Cameroonian public corporations raise more funds from the local banking sector than from external partners. For instance, in 2016, they raised XAF603 from the local banking market. That amount is the highest they raised in the local banking market in the past four years. The lowest amount was raised in 2018 (XAF393 billion).
The XAF516 billion raised from external partners was the highest raised by Cameroonian corporations over the past four years. In fact, it is significantly higher than the XAF95, 97 and 124 billion raised from eternal partners in 2016, 2017, and 2018 respectively.
Despite this debt, which is bothering both the government and international partners, Cameroonian public corporations still deliver poor results, according to an IMF report. For the Technical Commission for the Rehabilitation of Public and Parastatal Enterprises (CTR), those results are due to the high operating costs.
Based on the results of 50 public corporations, the CTR explains that personnel costs exceed 30% of the annual turnover of these state-owned corporations. In some cases, those charges exceed 70% of the companies’ turnover, we learn. Those high expenses affect the optimal operation of public corporations and do not allow them to fund their investment projects or even repay their debts.
Brice R. Mbodiam