(Business in Cameroon) - The International Monetary Fund (IMF) has just carried out a study on Cameroon's economy suggesting that the National Refining Company (Sonara) is the main source of risk for the country’s banking system.
Indeed, explains the IMF, Sonara accounts for 65% of the deposits of public companies and 62% of loans; 87.9% of its debt is due within one year. This made the company “the main culprit responsible for the direct risk to the banking system from state-owned enterprises, in terms of large exposure and liquidity and credit risks,” the Bretton Woods institute said.
“Of the 6 banks with positive net exposure to Sonara, one has negative equity, three will not meet the minimum capital requirement in the event of Sonara's default and two banks will lose 85% and 50% of their respective excess equities,” the study reveals.
However, IMF added, the decline in debt (nearly CFA1,800 billion) with suppliers between 2014 and 2016 is subsequent to a collapse in oil prices. As well, the investment of CFA100 billion of the CFA750 million Eurobonds issued in 2015 helped repay government bonds held by Sonara in 2016.