(Business in Cameroon) - Cameroon recently made a huge step towards transparency in the extractive industries. Indeed, since its penultimate edition (2016), published in 2019, the EITI (Extractive Industries Transparency Initiative) report now devotes an entire section to the "direct interventions" that earned the National Hydrocarbons Corporation (SNH) the nickname of Cameroon’s  "slush fund".

Still called "indirect transfers", the said "direct interventions" are payments directly made by the state-owned oil company (with the revenues from oil sold on behalf of the state) for the expenses of some public institutions and agencies at the request of the Presidency of the Republic.  

From the 2016 and 2017 reports, we learn that within two years (2016 and 2017), the SNH disbursed XAF383.4 billion as direct interventions.

The reports do not provide details on the type of expenditures funded but they do list the recipient institutions and agencies. From those revelations, it appears that the bulk of those direct interventions were made for security administrations and institutions attached to the presidency of the republic.  

The Rapid Intervention Battalion (BIR)’s expenditures

Thanks to this new step towards transparency in the management of the oil windfall in Cameroon, we now have an idea of the annual expenditures of the Rapid Intervention Battalion (Bir). The 2017 EITI report (published in early 2020) indicates that this elite unit of the Cameroonian army (the unit has nearly 5,000 agents) received XAF109.1 billion as direct interventions from the SNH in 2017.

In the last thirty years, Western backers (the IMF notably) that consider such expenditure financing mechanism to be contrary to good budgetary and governance practices have been pressing Cameroon to put an end to it. But, the government is always opposed to doing so arguing that "the urgency and sensitivity of certain security and sovereignty expenditures" require the use of slush funds.

In the framework of its latest 3-year (June 2017-June 2020) program with the IMF,  Cameroon committed to reducing "direct interventions" to 50% of all SNH transfers to the Treasury. However, the country is still unable to meet this commitment. In 2017, those direct interventions were 54% of the total transfers made by the SNH to the public treasury. As the government failed to meet its commitment, it decided to lift some of the mysteries surrounding this expenditure.  

There is still more efforts to make    

Let’s note that, since 2007 when it joined the EITI initiative,  Cameroon has been implementing actions to obtain the EITI Compliant country status. In a decision released on January 22, 2021, the EITI Board found that Cameroon's progress in achieving transparency in the management of extractive resources is not sufficient to become an EITI Compliant country.

The Board then asked the country to implement 15 corrective measures by April 1, 2023, when the third review to get this status for the country will start. That status will improve the quality of Cameroon's signature on regional and international capital markets and its cooperation with Western bilateral and multilateral backers.  

Effective January 1, 2021, Cameroon is now required to disclose all the contracts and licenses that are granted, concluded, or modified. Also, by December 31, 2021, it is expected to publish the "beneficial owners of all the companies" that have an extractive license or have submitted a license application, by the publication date. The country must also ensure that the terms and conditions of government and SNH’s investments in oil and gas companies and projects are publicly available. The information should include the amount they will invest at each stage of the project.

Aboudi Ottou  

Direct interventions by the SNH

Source: ITIE Cameroon