In 2019, food prices have been among the main driving forces behind the rise of the inflation in Cameroon. That year indeed, inflation surged to 2.5%, the highest since 2015.

Among the food products that contributed to the rise was beef, the National Institute of Statistics (NIS) reported. According to NIS,after a drop of 2.1% in 2018 the price of beef in Cameroon increased by 3.5% in 2019. This sharp rise is mainly due to the resumption of beef trades with neighbouring countries (Nigeria in particular), the INS explained.

Indeed, because of the exactions started by Nigerian Islamist sect Boko Haram in 2013, Cameroon closed its northern borders with Nigeria in 2015. The northern region is the main beef production area in Cameroon.

In 2019, following the relative peace that ensured after fights led by the Cameroonian army against Boko Haram, Cameroon decided to open some of its borders with Nigeria. This is the case of the Amchidé border, officially reopened since May 15, 2019. This town is the hub of trade between Nigeria and Cameroon in the Far North region.

At the same time, several livestock markets, closed for years due to the insecurity created by Boko Haram, were also relaunched. Consequently, exports of Cameroonian beef to Nigeria have been boosted, leading to higher prices on the local market.

 Business in Cameroon

Banana exports from Cameroon are on the slide. This is a direct fallout of the armed struggle by the Ambazonia people of South West Cameroon who want to secede from Cameroon Republic.

In February 2020, the two banana exporters still active in Cameroon exported 14,965 tons of the products. According to the banana exporters’ association Assobacam, these exports were down by 6,532 tons compared with the 21,497 tons exported during the same period in 2019.

This drop is mainly due to a decrease in the year-over-year exports of Plantations du Haut Penja (PHP), the local subsidiary of French group Compagnie fruitière de Marseille. During the period under review, PHP (leader of the Cameroonian banana market) only exported 13,847 tons against 19,737 tons in February 2019.

State-owned agribusiness unit CDC is still absent from the Cameroonian banana exporters’ registry. The main economic victim of the pro-independent crisis in the Anglophone regions [since 2016] stopped operations since September 2018, because of the insecurity created by separatists on its plantations and factories.

Source: Business in Cameroon

South African Airways (SAA) said on Friday that it would immediately suspend all intercontinental flights until the end of May in response to a government travel ban aimed at stopping the spread of the coronavirus.

State-owned SAA, which is under a form of bankruptcy protection, flies to the United States, Britain, Germany, Australia and Brazil on its intercontinental routes.

Earlier this week it said that it had already cancelled 162 intercontinental and regional flights until the end of this month.

President Cyril Ramaphosa on Sunday announced bans on travel to countries considered “high-risk” for the coronavirus, including the United States, Britain and Germany.

Separately, the specialists appointed in December to try to save SAA on Friday asked creditors for a two-month extension for their business rescue plan for the cash-strapped airline until May 29.

SAA hasn’t made a profit since 2011 and has received more than 20 billion rand ($1.2 billion) in bailouts over the last three years.

Another struggling state-owned airline, SA Express, suspended operations until further notice from Wednesday.

Source: Africa news

A five-member delegation of African Development Bank Executive Directors has concluded a week-long fact-finding mission to Cameroon during which they met with the country’s Prime Minister and other senior officials.

During the mission which began on 2 March 2020 in the capital, Yaoundé, the Executive Directors also held consultations with stakeholders, including private sector operators and development partners. They also toured Bank-financed projects.

“We are glad to host you here to understand the reality on the ground,” said Prime Minister Joseph Dion Ngute, welcoming the delegation. “The government shall endeavor to address the concerns you may raise.”

The meetings with the government Ministers reviewed Cameroon’s economic and political situation and prospects, as well as cooperation with the African Development Bank, which the Premier Ngute described as productive, noting that the Bank was “one of the most prominent players” in the country’s economy.

The Bank’s investments are channeled through infrastructure, health, energy, education, sanitation and water sectors. “The projects have contributed tremendously to transforming the country and improving the living conditions of Cameroonians, both in rural and urban areas,” Ngute said.

The Executive Directors welcomed the government’s efforts to reduce debt and called for steadfast reforms to shore up economic growth. They emphasized the need for swift government action to accelerate the implementation of projects and programs approved by the Bank. They also discussed progress in the opening of the Bank’s Regional Office in Yaoundé, a key step in the implementation of its new business development model.

“This consultation mission is part of the Board’s efforts to enhance its members’ understanding of in-country developments,” said Mbuyamu Ilankir Matungulu, Executive Director for Cameroon, Central African Republic, Burundi, Congo, Chad and the Democratic Republic of Congo and spokesman for the delegation.

To conclude their mission in Yaoundé, the Executive Directors held discussions with the State Minister and Secretary-General of the Presidency of the Republic, Ferdinand Ngoh Ngoh.

They took note of security concerns in the northern-west and southern-west regions which have caused delays in the implementation of Bank-funded projects. The delegation encouraged the authorities to stay the course with reforms to ease political tensions and facilitate the return of peace and security, and ensure the resumption of orderly development work in the affected areas.

Bank-funded projects visited by the team included the Yaoundé sanitation project (PADY), which has helped to reduce the incidence of flooding in the capital; electricity transmission and distribution networks (PREREDT), which has provided power to nearly 12,000 households in southern Cameroon with plans to power additional 16,000 households; and the 200 MW Kribi Power Development Corporation (KPDC) power plant which is supporting social initiatives for local communities in the areas of education, health, and environment.

In Kribi, the delegation also visited Cameroon’s new deep-sea port and shared perspectives with its management.

Other members of the Bank delegation include Mmakgoshi Lekhethe, Executive Director for South Africa, Lesotho and Eswatini; Cornelius Karlens Dekop for Botswana, Malawi, Mauritius, and Zambia; Takuji Yano, representing Japan, Saudi Arabia, Argentina, Austria, and Brazil; Christopher Chalmers for the United Kingdom, Italy, and Netherlands. They were accompanied by senior advisers and acting Director-General for Central Africa, Solomane Koné.

The Bank’s portfolio in Cameroon, estimated at $3 billion, is the most prominent in Central Africa in terms of commitments.

Source: The Devdiscourse

Cameroonian authorities say smuggling from Nigeria is increasing, five months after Abuja banned land border trade to crack down on the illegal business. 

At the Limbe market in southwestern Cameroon, both local and Nigerian traders say their businesses are suffering with Abuja’s ban. Traders say they regularly run short of supplies from both countries, leading to price increases of up to 15 percent.

Nigerian Miracle Ademola, 35, sells dresses to Cameroon and buys rice to sell back home. But she said she can’t afford to pay the high shipping costs to take the goods back and forth by boat.

“It has drastically affected the economy of Nigeria and the economy of Cameroon,” she said. “Smuggling things as it is now is actually not beneficial and we find it risky. We just look forward and hope for the borders to be opened any moment from now so businesses can go on as they used to.”

Cameroon depends on goods from Nigeria for 70 percent of its basic commodities.    

Cameroon’s National Institute of Statistics says about 15,000 Cameroonians trade across the 2,000-kilometer-long border with Nigeria. Nigerians also buy agricultural produce including cattle, rice, onions and cotton from Cameroon for its booming market of some 190 million people.    

But in October 2019, Nigeria closed its land borders to all trade to end rampant smuggling.

In Cameroon, the move seems to be having the opposite effect.    

Cameroonian police and customs in the southwestern town of Buea burned a huge pile of smuggled medicines from Nigeria on Sunday. Police seized the unregulated pills and tonics, which included anti-malarial and anti-inflammatories, as they were being delivered to pharmacies.

Cameroonian health official Victor Mbome said authorities are seizing more of such smuggled shipments of drugs since Nigeria closed its border.

“Each time the security forces apprehend somebody who has contraband medication, the security forces seize them. In about six months, we have destroyed contraband medication to the tune of about 50 million [CFA],” Mbome said, which is about $85,000 worth of smuggled medicine in a town of about 300,000 people.  

Cameroonian customs officials say it’s not just medicine coming from Nigeria. Smuggling of most basic goods, electronic appliances, and engine parts have all increased in the past few months.

A senior customs official for the southwest, Pierre Engamba, said customs revenue dropped 2 percent a month from October to December because of the smuggling.    

“We have more than 100 entrances in the sea. More than one hundred. We can [control] about 50, but the other 50 is a problem,” he said. “We take major strategies like night patrols with police and gendarme teams. Even [the navy]. Another strategy is to sensitize the traditional rulers, to sensitize the population. To tell them that those activities are killing our economy.”

Critics argue Nigeria’s closed border pours doubt on Africa’s continent-wide free trade agreement signed in July 2018. But Nigeria says the country is still open to trade through its ports and that the land border closure means it’s simply better regulated.    

Officials at Nigeria’s embassy in Yaounde were not available for comment.

Source: VOA

A top minister in the Biya Francophone regime in Yaounde recently told local divisions of Orange and MTN to impose mandatory identification for senders and recipients of mobile money transactions, in the wake of a spate of ransom payments made over cash transfer services.

Territorial administration minister, Paul Atanga Nji took the hard-line position following a meeting with the two operators, highlighting the issue of payments being made following demands from armed militia the regime reportedly created in Southern Cameroons to stifle the Ambazonia uprising.

Minister Paul Atanga Nji wanted by the Special Criminal Court for financial crimes against the state of Cameroon revealed that an estimated XAF540 million ($916,064) in ransoms had been paid by Southern Cameroonians, using a range of cash transfer services in the last four months.

Although not specifying the sums which came from Orange or MTN users, Nji informed representatives from the companies they must introduce an identification process for both senders and recipients of funds.

Mobile money transfers between users of the same platform are traced as both parties have to be registered. However, when transfers are sent to those on another operator, the transaction goes via a code, which is then redeemed at a physical agent rather than deposited directly in an account.

Operators were given 45 days to comply with the request, with both reportedly supportive of the move.

By Staff lady Chi Prudence Asong with files from Mobile worldlive.com

Cameroon finally held its repeatedly postponed legislative and municipal elections in February for the first time in seven years. It came amid the continuing swell of separatist fervour from the Anglophone community situated in the northwest and southwest regions bordering Nigeria. The elections took place without notable social upheaval, but have done little to usher in a calmer political environment. A partial boycott was spurred by the main opposition Movement for the Rebirth of Cameroon (MRC) – the party led by Maurice Kamto, who was living in exile until Thursday, when he returned to Cameroon. This invariably handed an easy victory to the Cameroon People’s Democratic Movement (RDPC) supporting the octogenarian president Paul Biya, despite the other large opposition party, the Social Democratic Front (SDF), participating.

Euromoney’s panel of experts is only too aware of the high risks associated with investing in Cameroon, which remains outside the top-100 sovereign borrowers, ranking a lowly 132nd out of 174 countries ranked in Euromoney’s survey. On a score of 34.7 out of a maximum 100 risk points (where a higher score implies safety), Cameroon is far riskier than neighbouring Gabon or Nigeria, and more in line with Gambia and Madagascar, while similar to Algeria and Ukraine in the crowd-sourcing survey:

One of Euromoney’s Cameroon contributors is Patrick-Nelson Essiane, an economist at the Bank of Central African States, and financial manager at the Initiative for Research and Analysis in Sustainable Development in Central Africa (IRADDAC). He brings to attention several political risks, including the constitutional council ordering the annulment of legislative elections in some parts of the southwest and northwest regions, where re-runs are expected in 20 to 40 days. He also notes that in mid-February an incident involving the army and secessionists resulted in the death of women and children in Ngarbuh (northwest region), highlighting the insecurity.

“The international community called for a deeper and independent investigation of this tragedy,” he says. “While between February 4 and 22, according to local media, 14 civilians and one of the military were killed by Boko Haram in the far north region, yet there were no special mentions of these incidents internationally.”

On top of that, three out of 10 regions have faced some instability recently, though with most of the violence occurring away from the biggest cities relatively close to the border with Nigeria.

Economic risk

However, on macro-fiscal metrics, Cameroon’s risks do appear to be slowly improving. That is the impression given by the IMF’s latest extended credit facility (ECF) programme review, showing accelerating GDP growth, the non-oil primary fiscal deficit narrowing and ample imports coverage. Cameroon can access the pool of regional forex reserves and also received a $76.1 million disbursement from the IMF in January, on completion of the fifth programme review, bringing the total up to $590 million.

If recent forecasts from the IMF, central bank and government are assessed as one, economic growth was around 3.3% in 2019, and could rise to around 4.5% in 2020, on the back of an increase in gas production, and decent prospects for manufacturing and telecommunications. “As economic activity in Cameroon is relatively well balanced geographically, the episodes of violence in the southwest, northwest and far north regions would have probably a moderated impact on the macroeconomic performance of Cameroon,” says Essiane. “In addition, the key industrial centre of Cameroon (Douala) is not fundamentally affected by the crisis, even if we see an increase of the workforce in this city due to migrations from the northwest and southwest regions.”

Yet Essiane admits there are some prominent risks to figure. “The northwest and southwest crisis has affected agriculture in these two regions since 2017, with a huge decrease of the Cameroon Development Corporation (CDC) production of banana, palm oil and rubber. “Informal food agricultural production also decreased, with farmers leaving their plantations, leading to an increase in food inflation in urban centres of the country.”

 Oil

Moreover, last year, Sonara, the national oil refinery, suffered a fire, contributing to lower-than-projected tax revenue, constraining budget implementation. Treasury finances have become stretched by the government’s military expenses to address Boko Haram in the far north and the Anglophone crisis. Plus, Cameroon is acutely vulnerable to a global downturn caused by trade friction and/or the spread of the coronavirus disease (Covid-19), especially to any related falls in oil prices. The implications are non-trivial. For while Cameroon’s debt remains stable, there is “high risk of debt distress”, according to the IMF, with the debt servicing-to-exports ratio breaching the accepted threshold continuously until 2025, and significantly so until 2022. This is due, first, to the inclusion of Sonara’s maturing short-term liabilities and later because of a maturing Eurobond.

The IMF’s comprehensive debt sustainability analysis factors in various scenarios and indicates the debt load can be sustained and properly addressed. However, that assumes there are no shocks, including any undisclosed liabilities. There is nothing to suggest there might be, but the experience of Mozambique and Zambia should certainly temper the enthusiasm for investing in Cameroon.

Culled from Euromoney.com

This week in business on The Morning Call, Amelia Martha Nakitimbo looks at Nigeria’s call for a delay in the launch of the West African single currency.

The Nigerian Presidency in a tweet sent out on Monday “the convergence criteria between states” which have “not been met by the majority of countries.”

Meeting the convergence criteria has been a sort of glass ceiling hindering the realisation of this single currency over the last twenty years.

Also this week, Ghanaian President, Nana Akufo-Addo assured his counterparts that the Secretariat of the African Continental Free Trade Area will be operational by the 31st of March, 2020.

In a closed door session during the during the 33rd AU Summit in Addis Ababa, Ethiopia, President Akufo-Addo indicated that the premises have been already been furnished based on the specific requirements agreed with the AU Commission including the installation of critical Data and IT Infrastructure facilities and Security Systems.

The summit voted South Africa’s Wamkele Mene to be the first head of the AfCFTA Secretariat.

Source: Africa News

London-listed Tower Resources has started the site survey at its Thali license offshore Cameroon, ahead of the planned drilling operation at the NJOM-3 well.

Tower Resources said Tuesday that the Geoquip Marine geotechnical drillship vessel MV Investigator was at the proposed site for the NJOM-3 well, and was conducting the site survey.

The MV Investigator is expected to complete its boreholes in a few days, Tower said, adding that analysis of the data and preparation of final reports “will take a little longer, but should allow the Company to move to more concrete scheduling of the NJOM-3 well on the Thali block later in February.”

Tower was last month given a one-year extension to the initial period of the exploration phase of the Thali PSC.

The company then said that, once the MV Investigator survey is complete, it would discuss the survey results with the drilling company COSL before finalizing arrangements for the well itself.

Tower and COSL in August 2019 signed a letter of intent for the supply of the COSL Seeker rig to drill NJOM-3 instead of the Topaz Driller jack-up previously agreed with Vantage Drilling.

The NJOM3 well is planned to be drilled to a total depth of 1,100 meters intersecting at least three reservoir zones already identified by the NJOM1B and NJOM2 discovery wells drilled on the Njonji structure by the previous operator Total.

The well is designed to confirm the greater reservoir thicknesses observed on the reprocessed 3D seismic in the up-dip area of the structure, and also evaluate additional reservoirs that were not present in the areas where Total’s wells are located.

The NJOM3 well is designed to supplement Total’s well data with a suite of measurement and logging tools and drill stem test (DST) flows to surface. The company’s intention is then to suspend the well with a view to subsequent completion as one of four initial production wells on the structure.

Source: oedigital

The representatives of Cameroon’s top employers are calling for the sacking of Cameroon’s tax chief, a sign of deteriorating relationships across the business and government sectors as the economy underperforms.

The president of the Groupement Inter-Patronal du Cameroun (GICAM), Célestin Tawamba, in a letter dated 16 January and addressed to President Paul Biya, complained about the attitude of the current head of the Direction Générale des Impôts (DGI), Modeste Mopa Fatoing.

An observer of the country’s economic environment, summed up the letter, saying it was “an indictment and, above all, an explicit demand for [Fatoing’s] dismissal”.

In what was obviously a deliberate leak, the letter made the front page of the economic newspapers. One headline dated 22 January, stated: “Consummate breakdown of relations between the Directeur Général des Impôts and companies”, and carried substantial extracts from the letter. Naturally, this ignited activity on social media.

Gicam’s tax reform in question

According to a copy of the letter, seen by Jeune Afrique, the bosses’ boss openly criticised the DGI boss for, among other things, “his inability to engage in dialogue and to deal with contradiction, the refusal to issue administrative documents which has led to considerable delays in making investments, his inability to devise a short- and medium-term fiscal policy likely to boost growth while ensuring an appreciable level of revenue for the state, his lack of knowledge of the reality for companies”.

For Tawamba, it seems, the straw that broke the camel’s back was Fatoing’s “hostility to a GICAM tax reform proposal in which he [Fatoing] thought he perceived an attempt by the private sector to replace the state, despite instructions from his superiors”.

The cornerstone of GICAM’s 300-page tax reform proposal, submitted in 2018, was to reduce the minimum collection rate on turnover from 2.2% to 1.1%. This would provide companies with a tax break worth 51bn CFA francs ($8.7bn). Tawamba, who is also the founder of the Cadyst Invest Group, has continually advocated abandoning taxation based on activity in favour of a tax based on profit.

Cameroon and the IMF

DGI Fatoing dismissed the complaints. “The DGI is not opposed to anything,” he said.

A tax administration official said: “Arbitrations in budgetary and fiscal matters are made by the presidency” and pointed out that 71% of GICAM’s proposals were validated by a steering committee set up in 2018 by finance minister Louis Paul Motaze, most of which are gradually being implemented.

“The remaining 29% of the proposals, which include the issue of minimum collection, require in-depth studies of their impact, all this while Cameroon is under a programme with the IMF. Moreover, the minister of finance had made this known to employers on 3 November 2018, in Douala,” said our source.

Recipient of the letter, President Paul Biya, has remained silent.

Culled from The Africa Report