Cameroon’s oil revenues in Q1 2019 reached XAF125.7 billion, up 31.6% (XAF30.2 billion) compared to the XAF95.5 billion in Q1 2018. A performance spurred by the year-on-year increase in world prices, according to the finance ministry.

Revenues include XAF113.8 billion as royalties from the National Hydrocarbon Corporation (SNH) and XAF11.9 billion as oil corporate tax. Based on revenues in FY2018 and contemporary payments, the oil corporate tax should reach XAF91.5 billion this year. Expected SNH royalty is based on a production projected to be 24.5 million barrels and a Brent oil price expected at $69. With current tax relief at $3.5, final barrel price in Cameroon is $65.5.

S.A

Over the first three months this year, Cameroon’s public debt was XAF7,494 billion, about 35% of GDP, according to the finance department (Minfi).

The amount consists of 76.6% external debt estimated at XAF5,737 billion, XAF718 of which was received as budget support under the IMF economic program ; 22.8% of domestic debt estimated at XAF1,710 billion and 0.6% (XAF47 billion) of guaranteed debt.

The external debt, the ministry says, covers 40.4% of concessional debt, the remaining 59.6% being non-concessional debt. Government securities accounted for 30.5% of the public debt and include 32.5% of short-term loans (BTAs) and 67.5% of mid-term loans (OTAs). Securities owned by non-residents are included in the external debt.

Last year, outstanding debt was XAF7,318 billion (34.4% of GDP) against XAF6,255 billion (30.8% of GDP) in late 2017. Higher debt, Minfi explained, is subsequent to drawings on statutory advances granted by development partners (IMF, World Bank, AfDB and France) as part of the IMF economic and financial program signed in June 2017. Debt increase is also motivated by acceleration in big infrastructure projects.

Sylvain Andzongo

During the first quarter this year, Dangote Cement sold in Cameroon the equivalent of 229 kilotons (229,000 tons), down 10% compared to the 332 kilotons (332,000 tons) the same period last year.

Lower sales, the group said, is mainly linked to trouble issues in the northwest and southwest which disrupt activities. The company experienced broadly a tough quarter on the continent with delayed Nigerian elections which dropped sales and stiff conditions on markets including South Africa, according to Joe Makoju, the company’s Acting Group Chief Executive.

Plus, the manager said, Dangote's variable costs were affected by currency effects, as well as higher fuel and distribution costs. These factors, combined with the growth in muted volumes in all activities, contributed to a slight drop in revenue (240.2 billion naira or nearly XAF391.5 billion down 0.8%) and a greater impact on profitability, he said.

Let’s note that consumption in Cameroon is spurred by individual and government construction projects as well as the continuation of AfCON-related works. Dangote controls 40% of Cameroon’s cement market, estimated at 750,000 tons in Q1 2019.

S.A

Cameroon is on the path towards an impending amendment of its 2019 Finance Law. Modification is motivated by the outcomes of the 4^th ECF review recently carried out by the International Monetary Fund IMF.

Indeed, the IMF mission found that the country will adjust the 2019 budget (XAF4,850.5 billion) as to take the expected hike in revenue into account and fully include spending linked to upcoming elections and fuel subsidies, while maintaining the overall deficit at 2% of GDP.

“The revised budget of Cameroon also provides for the speeding up of the implementation of ongoing externally funded investment projects, on the basis of a disbursement plan with well-defined priorities. Higher external support will allow for the restoration of budgetary flexibility and the payment of expenditure arrears that accumulated at the end of 2018,” said Corinne Deléchat who led the IMF mission.

Back on June 4, 2018, following the 3rd ECF review, President Paul Biya signed an order amending and supplementing the 2018 Finance Law. Cameroon's general budget expenses thus increased from XAF4,513.5 billion to XAF4,689.5 billion, up XAF176 billion. And Deléchat said the 2018 budget execution was broadly in line with the IMF economic program.

Sylvain Andzongo

Net result of the Development Bank of Central African States (Bdeac) in 2018 increased to XAF12 billion, more than 400% higher than the XAF2.3 billion in 2017, official sources said.

The good performance was spurred by better control of bank expenditures, including procurement contract costs. “We approved many contracts without a proper evaluation of costs,” acknowledged Bdeac Chairman Fortunato-Ofa Mbo Nchama.

Futher progress, according to Mbo Nchama, is expected since “Bdeac put in place an ad hoc commission and set an annual procurement plan that already shortened by one third the cost of certain contracts in 2018.”

BRM

Wafa Assurance, the insurance arm of Moroccan group Attijariwafa Bank, has just signed an agreement to acquire a majority stake in Cameroonian companies Pro Assur SA and Pro Assur Vie, Moroccan media said.

As a result of this double operation, it is reported, “Wafa Assurance acquires 65% of the voting rights within Pro Assur SA and acquires a controlling interest representing 89.4% of the shares and voting rights of Pro Assur Vie.”

The transaction, which remains subject to approvals by insurance regulatory authorities in the two countries, will enable the Moroccan company to strengthen its position in Cameroon.

Since it settled in Cameroon in June 2016, through its subsidiary Wafa Assurance Vie Cameroun, the Moroccan company has only operated in Douala distributing its bancassurance products through the branch network of SCB Cameroon, also controlled by Attijariwafa group.

In addition to Cameroon, Wafa Assurance is also present in Senegal and Tunisia, where it operates with banking subsidiaries of its parent company (Attijariwafa Bank).

BRM

Cameroon’s national social security fund (CNPS) announced it collected XAF178.9 billion in social contributions in 2018, up 6.61% compared to the XAF167.8 billion a year earlier.

Good performance is linked to increased number of online declared workers (368,643 in 2017 to 421,129 in 2018, up 14.24%).

In addition, despite the increase in the number of employers, the number of online-declarers remained almost stable at 30,622 (compared to 30,623 in 2017). Other Services (32.5%), trade (12.63%) and Agriculture (10.36%) are the sectors with the most social security coverage.

In the social insurance sector, 65,362 new registrations of the compulsory system were observed in 2018, compared with 60,196 the previous year, an increase by 8.6%, with 67.57% of registered persons being male, and 73.41% under 35 years of age. Overall, there are 780,745 workers active in the compulsory scheme.

With regard to the voluntary scheme, which was introduced in 2014, there was a total of 16,216 new registrations in 2018; 59% of which were male and 79% under 35. A total of 134,883 insured persons are active on this segment.

Total workers registered on both regimes (compulsory and voluntary) in Cameroon in 2018 is estimated at 915,628.

S.A

Cameroon's International Bank of Savings and Credit (Bicec), local arm of French BPCE, is presented in a Beac recent report as the top grantor of banking credit over the last 6 months of 2018.

According to the document, Bicec alone controlled 36.66% of market shares ; followed by Société Générale of Cameroon (21.43 %). Together, the two subsidiaries granted 58.09% of credit amount. Société commerciale de banque Cameroun (SCB), subsidiary of Attijariwafa, and Commercial Bank Cameroon (CBC), which saw their market shares grow over the period, granted 9.34% and 9.03% of credit, respectively.

“Afriland First Bank and Ecobank Cameroun which used to be major credit providers during the first half 2018 only provided 6.18% and 3.39%, respectively in H2 2018,” Beac noted.

In general, all financial institutions operating in Cameroon received 517,486 credit requests (402,690 overdraft cases and 106,468 of depreciable loans) for a total of XAF2,887.75 billion in H2 2018. The amount is down 14.3% compared to that of the previous half-year which stood at XAF3,372.11 billion. Also, 2018’s whole year credit request, XAF6,260 billion, is 7.11% lower compared to 2017 when credit requests amounted to XAF6,739 billion.

Let’s note that Banks are major credit grantors in Cameroon, providing 99.2% of monies.

S.A

The Cameroonian government needs about XAF3,307 billion, including budget aid of XAF354 billion, to handle the 3-year period from 2019 to 2021. Figures were provided by the national debt committee.

For 2019 alone the country needs XAF1,260 billion, the committee said, and this deficit is expected to be offset through actual mobilization of 74.2% of external debt (XAF935 billion including XAF347 billion as budget support) and 25.8% of internal debt (XAF325 billion). The limit of new external commitments for the 3-year period is set at XAF2,150 billion, including XAF650 million for this year. According to the committee, the limit is set in accordance with constraints imposed by the ongoing economic program with the International Monetary Fund IMF. These require maintaining sustainability of Cameroon’s public debt with a risk of debt distress at most moderate level.

Over the same period, the limit of new internal commitments was XAF1,055 billion, including XAF325 billion for 2019. Government support’s limit is XAF120 billion (XAF40 billion for 2019).

S.A

Since 2014, Camrail’s freight transport has been increasingly weakening, according to MD Pascal Miny. “Freight transport is now less profitable than before and demands much more investments,” he said speaking during a press conference held April 15 in Douala to commemorate 20 years of Camrail.

The company attributes the decline in activity to the strong economic slowdown in Chad which happened at the end of 2014 due to fall in world oil prices. Subsequently, sources said, between 2015 and 2018 Camrail lost about 50% of the Chadian freight transport (mainly hydrocarbons). Chadian market accounted for 35% of the company’s freight portfolio, according to Sales Manager Mesmin Tchoua. Further, the company is facing stiff challenge from road carriers who offer lower prices ; a situation that forces Camrail to often review its tariffs downward and seek new markets. New markets include CAR where Camrail plans to get 10% of market shares this year.

Another reason for weaker activity over the period reviewed is the attractiveness problems at the port of Douala (extended transit time for goods, congestion in the port area, etc.), Cameroon's main port platform, as well as hassles experienced on the Douala-Ndjamena and Douala-Bangui corridors.

As a result, many economic operators mainly Chadian and Central African operators now resort to the ports of Sudan or Benin. Since 2014, the volume of goods transported on Cameroonian corridors has been reduced by 600,000 tons, causing port operators and carriers an estimated loss of nearly XAF200 billion.

Figures were revealed July 11, 2018 in Douala by Cyrus Ngo'o, MD of the Douala Port Authority (PAD) during a three-day seminar on the implementation of the recommendations of the 2nd Cameroon-Chad-RCA Tripartite Forum on Port Issues.

Brice R. Mbodiam