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Yaoundé - 25 November 2020 -
Public management

Cameroon plans to orient public companies towards non-sovereign loans to relieve the public treasury

Cameroon plans to orient public companies towards non-sovereign loans to relieve the public treasury
  • Comments   -   Tuesday, 14 July 2020 13:52

(Business in Cameroon) - Cameroon plans to control the debts generated by public institutions and enterprises over the 2021-2023 period, according to the provisions included in the Budget Orientation Document, which is a precursor to the 2021 Budget.

 "The actions that will be deployed during the triennium (2021-2023) will aim at reducing the demands on the state budget from these structures carrying conditional liabilities, by orienting them towards non-sovereign loans from development partners or private banks," the orientation document explains.

According to the document, the main need will be to improve financial reporting and strengthen the supervision over the management of these entities thanks to the innovations brought by the ongoing reforms. For existing debts, whose audits are either in progress or planned, they will be gradually cleared by being included in the budgets of these entities.

The Government notes that public enterprises, although autonomous, repeatedly request support from the State budget in financial years for one-off support and fairly large amounts without these amounts being planned in their initial budgets. Yet, their original mission is to pay dividends to fund the State budget, not the other way round.

Examples of companies, in that case, include the Camair-Co, Sonara, the Port Authority of Douala (PAD), the Port Authority of Kribi (PAK), Douala Port Authority (PAD), the Kribi Port Authority (PAK), Société de développement du Coton (Sodecoton), telecom operator Camtel, postal service Campost, audiovisual channel CRTV, and the national printing house.

In 2017, the total debt of the country's 37 public or publicly owned enterprises was over CFAF 2,624.4 billion. Sonara, the national telecommunications company (Camtel) and the national water company (Camwater) were among the top three indebted public enterprises with respective debts of CFAF 763.2 billion, CFAF 554.5 billion, and CFAF 352.4 billion. The other public enterprises that closed the top 5 are Electricity Development Corporation (CFAF 140.4 billion) and Sodecoton (CFAF 113.1 billion). The main issue other than their indebtedness is their inability to generate enough income to repay creditors.

S.A.

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