12, June 2019
When Cameroon’s lone refinery went down, many thought it would take long for the adverse effects to start showing. But less than two weeks after the event, the government is scrambling for solutions to clog the revenue gap left behind by the refinery’s meltdown.
SONARA has always been a huge contributor to the government’s annual budget and now that it has gone up in smoke, it implies that the country’s budget has to be amended and new sources of revenue sought. The country’s Parliament is already considering amending the budget. This is a clear sign that the meltdown is biting the government where it hurts the most.
The government’s major ATM has vanished in smoke and this is leaving government officials awake all night. The refinery used to deliver almost 50,000 barrels of oil a day and this was a guaranteed source of revenue for the government. The disappearance of this stream of revenue has really destabilized the government which is yet to find new sources of revenue.
Within government circles, officials are praying day and night that global oil prices should not escalate as this will spell more problems for the beleaguered government. Escalating oil prices will imply the government will run out of foreign exchange very fast as it will look for resources to import oil and oil products so as to meet rising domestic demand.
The fear is that in the absence of those products, prices of other products, especially food stuff, may also escalate and this would trigger inflation that might make life unbearable for millions of Cameroonians who, for many decades, have only been scrapping a living.
Escalating prices might spell a disaster for the government which is on its last foot. Cameroonians have been scared of pouring into the streets to confront a government that has made corruption and nepotism its hallmarks, but if food prices soar beyond their financial ability, it is obvious that millions will take to the streets to challenge the corrupt and inefficient government.
The first signs of a disaster are already on the horizon. Gas stations across the country are already complaining of fuel shortages and this is just the beginning. According to the government’s thinking, it could take over a year for SONARA to come back to business. This is, indeed, bad news for many Cameroonians who are already out of work and those whose businesses were closely tied to the jinxed refinery.
If government officials are talking about a year, it is clear that it will take more than three years for real business to start at SONARA. Currently, the government is looking for financial resources to rebuild the facility. It is counting on the African Development Bank and the World Bank which do not hold the country’s authorities in high esteem.
Investors in the world have very low appetite for Cameroon’s debt. The corruption for which the government is known is making it hard for foreign money to make its way into the country’s economy. Putting SONARA back to international standards will require more than USD 20 billion and the cash-strapped Yaoundé government is yet to figure out how to get such resources given that it has a very bad reputation abroad.
Though the refinery had an insurance policy, it is obvious that after such an accident, there must be investigations to determine the cause of the accident before insurance companies start paying out the benefits. They must also determine if the facility was up-to-date with its premium payments.
Cameroon has been defaulting on lots of commitments and it will not be surprising to know that it could have also defaulted on the payment of its premiums. For now, lawyers of the facility are working with their foreign counterparts to seek a way forward on how to make the once viable SONARA a going concern again.
The government has also been looking at other options which could net it some huge amounts of money. It has been talking with the French government on how to rebuild SONARA which had delivered huge amounts of oil to the French for peanuts.
The French are open to the idea of granting the corrupt Yaoundé government some of the money, but they are unhappy with the way the government has handled most of the crises that have put the country in the spotlight for all the wrong reasons.
France’s closest allies are walking away from it as it is believed that Paris is supporting the Yaoundé government in its resolve to kill the people of Southern Cameroons. Many EU countries are insisting on Yaoundé calling for an inclusive dialogue that will help normalize things in Cameroon.
But Yaoundé has been indifferent to those calls. Many EU countries have already allied with the United States and Canada on how the Southern Cameroons crisis could be addressed. America’s determination and its ability to mobilize other countries, including some of Cameroons neighbors like Equatorial Guinea, have rattled the regime and its supporters.
Over the last two days, regime supporters, including the Speaker of the House and the Senate President have been shouting from rooftops that there is a global conspiracy to destabilize Cameroon. They blame this on Southern Cameroonians and government forces seem to have been irritated by the enormous pressure coming from Brussels and Washington D.C.
The last few days have witnessed massive killings in many villages in Southern Cameroons. In Ossing and Ndekwai in the Southwest region, government troops slaughtered more than ten innocent civilians in a situation many observers say was unnecessary. In Esu and Jakiri in the Northwest region, army soldiers beheaded unarmed civilians. The killings have intensified over the last couple of days as the regime suspects that international pressure may increase in the days ahead.
Army soldiers have also been burning homes and destroying food crops, believing that such tactics will cause the population to yield and betray the fighters. This strategy has been in effect for more than two years, but the Southern Cameroons population is very determined. Most southern Cameroonians are for independence and will not settle for anything less.
The Yaoundé government is really frustrated. Its international allies are walking away and this is creating brand new problems even in the North where Boko Haram remains a lethal threat. The withdrawal of American military support in the North has exposed Cameroon’s army soldiers to more attacks from Boko Haram.
Yesterday, some 23 Cameroon soldiers were slaughtered by Boko Haram fighters in the country’s northern region. The ill-equipped soldiers were surprised by the fighters and were sent to an early grave. Their checkpoints and offices were demolished and weapons seized by Boko Haram fighters. American sanctions have already begun biting and if care is not taken, the days ahead may be bloodier.
According to sources close to the government, the stress is obvious. Government officials seem to be seeing the writing on the wall. The government is out of money and the West’s decision to turn the heat on the collapsing Yaoundé government seems to spell the end for a regime that has thrived on corruption and tribalism.
As the oil refinery has gone, the government does not have money to buy and corrupt more people. Some of its fervent supporters are already jumping ship. Many senior government officials are already sending their families abroad as they know that America’s determination to bring change to Cameroon can never be underestimated.
There is panic in Yaounde. The “river of money” in the southwest region has gone dry. CDC, PAMOL and SONARA are all facing problems and these are corporations that have stood the government in good stead over the last fifty years.
With these corporations facing tough challenges, it is clear that Cameroon is in real trouble. The government is at its wit’s end. The challenges are only mounting. It is the SONARA meltdown that will finally take the government down if care is not taken.
Before long, civil servants and the military will not be receiving their salaries. The military, in particular, has stood solidly behind the government during its bad days. Will it still stand with the government now that its coffers are empty? The stress is obvious and for cause. The military might just as well jump ship.
Cameroon is in for tough times and only a resolution of the country’s multiple crises can help bring some stability to the country. Without an inclusive dialogue as advocated by the international community, Cameroon will continue to be caught in a turbulence of epic proportions and the stress will continue.
By Soter Tarh Agbaw-Ebai at the Global Headquarters in the UK, with contributions from Kingsley Betek and Bamba Gaoussou in Malabo