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Cameroon: SNH pays XAF10 bln dividend to the State for 2020 operations

Cameroon: SNH pays XAF10 bln dividend to the State for 2020 operations
  • Comments   -   Tuesday, 15 June 2021 13:52

(Business in Cameroon) - For the 2020 operational year, SNH paid XAF10 billion of dividends, XAF8.44 billion of corporate tax, and XAF2.16 billion as miscellaneous taxes and duties into the public treasury. The figures were revealed in the release published at the end of this year’s first general meeting of the board of the national hydrocarbons corporation SNH held between June 1 and 4, 2021.

For some uninformed observers, the volume of the dividend paid to the State of Cameroon by the SNH may seem low given the performance of the company, which has always been highly profitable (XAF25.3 billion in 2019) and has been among the most performing national hydrocarbon corporations on the African continent for years now. The financial support provided by the SNH to the public treasury goes beyond just dividends, taxes, and duties. The hydrocarbons corporation also provides direct assistance, “direct interventions” and “indirect transfers.”

Due to the direct assistance, the corporation earned the name “State secret fund”. The assistance aims to cover the government’s security and sovereignty expenditures at the request of the Presidency of the Republic. For that assistance, the SNH, which also has assets in other companies, mostly uses the funds generated from crude oil it sells on behalf of the State.

Financing the Rapid Intervention Battalion (BIR)’s operations

In the EITI Report 2016 (published in 2019), the Extractive Industries Transparency Initiative reveals that in 2016 and 2017, the SNH disbursed XAF383.4 billion of “direct interventions” for the State. In 2019, those interventions amounted to XAF183.7 billion, it added. Usually, a significant portion of those interventions is channeled towards the Rapid Intervention Battalion (BIR), an elite unit (comprising close to 5,000 agents) of the Cameroonian army. In 2017 for instance, XAF109.1 billion of the direct interventions was used for the BIR’s operations, the EITI report claims.

Over the past thirty years, international financial partners (notably the IMF, which deems these funding mechanisms to be contrary to good budgetary and governance practices) have been urging the Cameroonian government to stop resorting to direct interventions.

In its recent technical report on the problems affecting state-owned companies in Cameroon, the IMF notably stressed the “particular case of SNH”.

The financial relationship between the State and the SNH are particular in many respects. Institutionally, according to its articles of incorporation, it is under the sole technical ad financial supervision of the General Secretariat of the Presidency of the Republic (…) The SNH's intervention mechanism is not specified by the law, and the expenses covered by the SNH are integrated into the budgetary accounts after the fact, just to regularize[the accounts]," the report informs.

However, the government regularly opposes the partners’ suggestions claiming that the urgency and the sensitiveness of some of the security and sovereignty expenditures call for direct intervention mechanisms.

Brice R. Mbodiam     

 

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