(Business in Cameroon) - As of end-August 2021, the National Refining Company SONARA and Cameroon Airlines Corporation (Camiar Co) were owing a total of XAF808.7 billion to banks as well as local and international suppliers and contractors. The figure is revealed by the national sinking fund CAA in its recent sectoral report. 

The two companies’ debt represents 90% of the XAF899.4 billion presented by the CAA as the overall debt of state companies and institutions. Specifically, the two companies’ domestic debt represents 86.5% of all of the reviewed state companies and institutions’ domestic debt. At the same time, their foreign debts represent 93.3% of the overall foreign debt revealed by the CAA in its report.  

With XAF684.4 billion of debt, SONARA is the most indebted state company in Cameroon. As of end-August 2021, it was owing XAF328.7 billion to local banks, suppliers, and contractors. At the same time, international suppliers are awaiting the payment of XAF355.7 billion debt from this national refinery whose plant was partially destroyed by a fire outbreak in May 2019. 

Camair-Co’s debt is less but it is still concerning for its financial stability. According to figures published in the CAA report, as of August 30, 2021, Camair-Co was owing XAF62.4 billion to local banks and contractors against XAF61.6 billion to foreign partners. 

Non-sovereign financing 

Over the years, in Cameroon,  state companies and institutions’ debt has become a great concern for the government and development partners. Both the government and development partners agree that those companies and institutions’ debt affects the budget equilibrium. So, to mitigate the risk posed by that debt, the government has initiated measures to direct them towards non-sovereign loans. 

“The measures that will be taken during the three years (2021-2023) will aim to reduce the pressure the companies are putting on the state budget (...), by leading them to resort to non-sovereign loans from development partners or private banks," informs the document prepared by the Ministry of Finance as part of the 2021 budget orientation debate.

In June 2015, a workshop was organized by the Ministry of Finance to detail how to access the French dvelopment Agency’s various  non-soveriegn funding mechanisms to the management of seven public corporations (Camtel, société des Aéroports du Cameroun, Sonara, Feicom, Port autonome de Douala, Camwater and Société camerounaise des dépôts pétroliers).

Since then, however, only CAMTEL was able to obtain the financial rating (from Bloomfield), which is usually a prerequisite for companies seeking non-sovereign loans from international backers.

Brice R. Mbodiam