(Business in Cameroon) - In Cameroon, many SMEs accuse Turkish construction company Yenigün, building the Japoma stadium in Douala, of owing them several months of invoices.
“The company owes me up to 11 months of arrears. It has paid some but, we are still waiting for the rest. We have obligations towards our own suppliers, especially the tax authorities who are waiting for us to pay various kinds of taxes on our turnover while we have not yet collected anything,” confided one of the promoters of one of these SMEs.
At Yenigün Cameroon, it is difficult to get any information because the worksite is barricaded and the company carefully screens the entries. Nevertheless, according to sources close to the case, these arrears have been existing since the beginning of Q2, 2019. Yenigün’s executives have always explained that they are waiting for the government’s payments to pay everyone.
In late December 2019, Cameroon, through the Ministry of Finance, signed an agreement with the local subsidiary of the United Bank for Africa (UBA). The operation has not been greatly covered by the media and the exact amount granted is not known. However, sources close to UBA admitted on condition of anonymity that several billions had been made available.
Payment arrears are one of the main challenges for SMEs in Cameroon, as most of them have low cash flow and have to face many short-term expenses, including those related to tax payments. Several promoters questioned by Ecofin Agency acknowledged that those arrears undermine their financial stability and relationship with banks.
The Cameroonian law gives the possibility to open a legal dispute for recovery. However, since the 2018 Finance Law, an appeal of this type is accompanied by the deposit of a guarantee representing between 10% and 15% of the amount of the requested payment. This requirement repels many SMEs that have no guarantee that the court will rule in their favour.