Shareholders in YUP Cameroon, a mobile payment subsidiary of Société Générale, have lost nearly $8 million (around CFA4.8 billion) as the company shut down in 2022, according to a liquidation notice disclosed by Africa Intelligence. Société Générale Cameroon held over 80% of the company, while other shareholders included the State of Cameroon and Allianz Cameroon, though their stakes weren’t specified.

On March 1, 2022, Nicolas Pichou, CEO of Société Générale Cameroon, informed employees of YUP’s closure. Launched in 2017 across seven African countries Côte d’Ivoire, Senegal, Burkina Faso, Cameroon, Guinea, Ghana, and Madagascar—the platform struggled to maintain profitability despite its reach. Pichou explained that despite efforts to expand market share and enhance customer experience, YUP could not create a viable model, and market conditions made its continuation unsustainable.

Following the announcement, YUP set a three-month deadline from March 15, 2022, to reimburse customer deposits. During an extraordinary shareholders’ meeting on December 29, 2023, in Douala, YUP entered liquidation, with financial expert Manfred Penda appointed as liquidator.

YUP’s Mobile Market Struggle: 96% of Accounts Remained Inactive

Despite five years of effort in Cameroon’s dynamic mobile money market, YUP’s offering failed to achieve profitability. The dominant positions of established operators, MTN and Orange, posed a significant challenge. These two companies, having entered the market nearly a decade before YUP, established extensive networks with their MTN Mobile Money and Orange Money services, leaving little room for new players.

A 2022 report from the Bank of Central African States (BEAC) highlights the scale of YUP’s struggle. By the time it shut down in March 2022, YUP Cameroon had attracted 689,071 mobile money customers,pale in comparison to the more than 21 million accounts registered in Cameroon that year. Even more telling, only 22,332 of YUP’s accounts were active, meaning that over 96% of accounts saw little to no use after their initial setup.

Meanwhile, Orange and MTN continue to vie for dominance. In 2021, Orange Cameroon claimed 70% of the mobile money market with 10 million accounts and over 100,000 business partners. However, MTN Cameroon’s CEO, Mitwa Ng’ambi, countered this, stating that MTN’s Mobile Money Corporation now boasts the country’s largest active user base, solidifying its leadership in mobile financial services.

Source: Business in Cameroon

Cameroon’s public debt rose significantly in the first nine months of 2024. According to data from Cameroon’s debt management agency, the national sinking fund (CAA), the country’s Treasury borrowed CFA1.079 trillion from international lenders between January and September. Ten new loans were signed with various financial institutions to support development projects and help accelerate domestic debt payments.

Breaking down the figures, the largest borrowing occurred in July 2024 when Cameroon secured CFA323.8 billion from American bank Citi Group. These funds aimed to speed up the payment of overdue domestic bills that had been pending at the Treasury for over three months, in line with Cameroon’s economic program with the IMF.

Besides the international bond from Citi Group, Cameroon also signed project loans totaling CFA775.4 billion in the first three quarters. These project loans represent almost 72% of the total foreign borrowings so far, achieving 79.5% of the annual target set in the 2024 revised budget law, which capped project loans at CFA950 billion.

Higher Interest Rates

The CAA report highlighted that 60.1% of these loans were at non-concessional, market-level interest rates, amounting to CFA446.5 billion. In contrast, 39.9% were concessional loans, totaling CFA308.8 billion, which typically carry lower rates. This reliance on higher-interest loans means Cameroon is now borrowing more from commercial banks like Standard Chartered, Exim Bank USA, and Citi Group, which generally don’t offer reduced rates like multilateral institutions such as the World Bank or IMF.

This shift towards non-concessional loans increases Cameroon’s interest obligations, further straining public finances. For example, in just the first nine months of 2024, Cameroon’s Treasury paid CFA250 billion in interest to international lenders. To put this in perspective, this amount could fund projects like the construction of Douala’s second bridge over the Wouri River (estimated at CFA140 billion) and cover the CFA100 billion needed to rehabilitate the Lagdo Dam (72 MW) in northern Cameroon, which remains critical for electricity supply in the region.

Source: Business in Cameroon

Cameroon’s Directorate General of Customs (DGD), under the Ministry of Finance, held its 196th session today to approve customs violation cases covering October 15 to October 30. According to the customs communication office, over CFA1 billion in compromised or evaded duties was recovered. CFA1.3 billion in fines was imposed on various violators of customs regulations.

Common violations observed included undeclared goods imports (55 cases), false declarations of goods values (51 cases), and missing Value and Classification Reports (RVC) for calculating applicable duties and taxes on imports (45 cases).

An internal DGD source stated that the goal for 2024 is to reach the 200th approval session, surpassing the 15 sessions held in 2023. This milestone aims to secure higher revenues from importers and exporters who often sidestep customs regulations.

Source: Business in Cameroon

On October 22, the Bank of Central African States (BEAC) launched a new liquidity injection operation for commercial banks. Unlike the previous two operations, where BEAC offered CFA340 billion, the offer on October 22 was reduced to CFA300 billion.

This reduction seems more in line with the current needs of the banks, based on recent results. Despite the gradual increase in liquidity offers by the central bank since resuming operations in June 2024, the volumes requested and actually taken up by the banks in the last two operations barely exceeded CFA270 billion. This is far from the CFA400-500 billion demands expressed by banks between June and September 2024.

The surge in liquidity needs during this period can be explained by the austerity imposed on credit institutions from late 2021 to May 2024 by the central bank. This period saw the implementation of measures aimed at draining banks’ coffers, including raising key interest rates, intensifying liquidity withdrawal operations, and suspending liquidity injections. These actions were officially intended to combat inflation by restricting access to credit.

BEAC notes that 20% of inflation in the Cemac region is of monetary origin. The central bank explains that injecting large volumes of liquidity into the economic system, particularly through bank financing, contributes to inflation, especially in Cemac countries where most goods and services are imported.

However, with the easing of inflationary pressures in Cemac markets since the start of 2024, BEAC has loosened its grip on bank liquidity. Consequently, the central bank resumed its liquidity injection operations in June 2024, after more than a year of suspension.

Source: Business in Cameroon

Cameroonian dollar bonds dropped for a third consecutive day as speculation about the health of the nation’s president raised concerns about a potential succession battle.

The country’s debt ranked among the worst performers Wednesday in an index tracking frontier and emerging market sovereign bonds. President Paul Biya has been absent from public view since early September, though the government said the 91-year-old leader was healthy.

Source: Bloomberg

On October 2, Cameroon successfully issued CFA10 billion in treasury bonds on the Beac public securities market. The results of this loan have not yet been disclosed.

This issuance coincided with a scheduled repayment of CFA12 billion from the Cameroonian treasury, which was due on the same day. This repayment relates to a loan taken out 26 weeks earlier. This suggests that, as is customary, the Cameroonian government sought to secure the repayment by obtaining a new loan.

This practice has become common in the sub-regional public securities market, allowing Cameroon to avoid dipping into its cash reserves to meet obligations to BEAC market investors.

It is worth noting that since the launch of the BEAC public securities market in 2011, the Cameroonian treasury has never recorded a single payment default. This track record makes Cameroon one of the most creditworthy countries in the market for the past 13 years.

Source: Business in Cameroon

Last year, CFA1,665.4 billion was recorded as suspicious financial flows in Cameroon. This figure represents an increase of 180% compared to the previous year, according to a report by the Anti-Graft Commission (Conac), which cited statistics from the National Financial Investigation Agency (ANIF). The result comes from analyzing 965 Suspicious Activity Reports (SARs) submitted to ANIF by banks, microfinance institutions, mobile money operators, money transfer companies, lawyers, notaries, and other public agencies.

The document found that “various fraud cases” were the most common, nearly tripling between 2022 and 2023. These cases represented over half (50.6%) of the reports made in 2023. The detected activities included tax fraud (60% of cases), customs fraud (40%), land transaction fraud (7%), and credit card fraud (5%). Common methods involved the illegal transfer of funds abroad using misused credit cards, hiding business revenues in third-party bank accounts, and illegal business operations by some economic actors. In addition to the relevant courts, information about tax and customs fraud has been shared with the General Tax Directorate (DGI) and the General Directorate of Customs (DGD).

The report emphasized that after “various frauds,” cases related to terrorism financing rose by 38% compared to 2022. These cases ranked second in terms of reports and accounted for 31.54% of submissions in 2023, totaling 141 cases. This rise may be attributed to security concerns, including the presence of Boko Haram in northern Cameroon and the activities of separatist movements in the Northwest and Southwest regions. Identified funding mechanisms involved internet scams, using fake identities to receive funds from abroad, as well as transfers through mobile money and money transfer companies.

Also, while the number of cases related to public fund embezzlement rose by 140% between 2022 and 2023, Conac noted that these cases represent only 2.68% of the reports submitted by ANIF to the authorities. However, they accounted for 4.3% (over CFA71 billion) of the total suspicious financial flows recorded by ANIF this year, compared to 94.7% (approximately CFA1,577 billion) for “various frauds.” Activities linked to terrorism financing accounted for only 0.14% of the suspicious financial flows reported, totaling around CFA2.3 billion.

Source: Business in Cameroon

CAMTEL is facing intentional vandalism targeting its optical fiber, disrupting internet services across Cameroon since September 20.

Cameroon Telecommunications (CAMTEL), the country’s leading telecommunications provider, has reported a significant deterioration in Internet service following a rise in acts of vandalism targeting its optical fiber infrastructure. Since September 20, the company has faced an upsurge in deliberate attacks that have severely impacted its ability to maintain reliable electronic communications across Cameroon.

CAMTEL’s management believes that these incidents are intentional and aim to undermine the company’s reputation and its capacity to deliver high-quality Internet services.

As the backbone of Cameroon’s digital connectivity, CAMTEL’s optical fiber network plays a critical role in ensuring seamless communication, making the recent disruptions particularly concerning for businesses and individuals who rely on stable online access.

“Our teams on the ground are working tirelessly to restore connection as soon as possible.

CAMTEL apologises for the inconvenience caused by the deterioration of service due to these incidents and remains committed to providing its partners with quality Internet service” Camtel said in a statement.

Source: Techafricanews

Minister of Trade, Luc Magloire Mbarga Atangana, met with South Africa’s High Commissioner, Mandla Langa, to discuss revitalizing the joint commission between the two nations. This body, crucial for monitoring and evaluating the Cameroon-South Africa trade agreement, last convened in 2018, its activities disrupted by the Covid-19 pandemic. Signed in September 2006, the trade agreement led to the creation of an interministerial committee overseen by the Minister of Trade, serving as a platform to discuss priority sectors for cooperation and trade exchanges between the two countries. During the meeting, the South African diplomat expressed his commitment to personally facilitate the resumption of the commission’s vital work.

Beyond trade, Cameroon and South Africa’s relationship includes agreements on air transport, double taxation avoidance, and various political and economic initiatives. On July 24, 2024, President Paul Biya ratified a bilateral agreement to enhance air operations and trade exchanges, a deal initially signed in Cape Town in 2011. Economically, South African companies have a strong presence in Cameroon, MTN being one of them.

In 2023, South Africa solidified its position as Cameroon’s second-largest African trading partner, exporting 143.8 tons of goods worth 47.9 billion CFA franc, representing 1.6% of Cameroon’s imports, according to the National Institute of Statistics. Cameroon’s exports to South Africa also increased, reaching 46 billion CFA francs in 2023, up from 44.5 billion CFA francs the previous year.

Minister Mbarga Atangana praised the “excellence and diversity” of relations between Yaoundé and Pretoria, reaffirming President Paul Biya’s commitment to attracting more South African investors. He highlighted Cameroon’s favorable business environment and the opportunities available to foreign investors.

Source: Sbbc