The Board of Directors of the African Development Bank Group on 29 November 2023 granted financial support of EUR 73.44 million to Cameroon for the construction of a bridge over the River Ntem, which forms a natural boundary with Equatorial Guinea. The bridge building is part of the Regional Trade and Transport Facilitation Project for the economic corridor between Cameroon, Equatorial Guinea and Gabon.

The financial support consists of two separate loans: the first, of EUR 48.96 million, from the African Development Bank and the second, of EUR 24.48 million, from the African Development Fund, the Bank Group’s concessional loans window.

The new bridge, which will link Campo, in Cameroon to Rio Campo, in Equatorial Guinea, will not only improve the service level for the transport logistics chain along the corridor between Yaoundé, Bata and Libreville, but will also contribute to the emergence of an industrial-port activities hub in the area between the deep-water port in Kribi (Cameroon) and its counterpart in Bata (Equatorial Guinea).

In practical terms, the project will contribute to increasing the volume of trade between the two countries; reducing travel time, shipping and transport costs along the Yaoundé-Bata-Libreville multinational corridor; creating favourable conditions for promoting an industrial-port activities hub in the same area, and improving the living conditions of various populations, including women, young people and vulnerable groups in its area of influence.

Implementation of the project is due to start in December 2023, with completion scheduled for November 2028.

Source: AFDB

During its second trading day on November 24, 2023, 24 hours after being listed on the Central African Securities Exchange (Bvmac), the Cameroon government’s multi-tranche bond for 2023-2031 recorded no transactions.

According to the official market bulletin published by the Cemac Unified Financial Market, various investors expressed interest in acquiring 700 of these bonds during the trading session.

However, the bondholders refrained from selling them. This cautious reaction from Cameroon’s bondholders, according to market observers, may stem from the purchase price (CFA10,000), which currently does not yield any profit for the holder compared to its initial value. The refusal to sell the bond, despite the relatively modest demand (only 700 bonds out of 17.6 million), reflects a certain confidence in the bond, which has just begun trading on the Bvmac and could potentially increase in value over subsequent trading days.

On the first trading day (November 23, 2023), the bondholders used the same approach. In that inaugural session, as revealed by the Bvmac’s official bulletin, 892 bonds were traded out of a demand for 1,592. A reliable source indicates that this trading volume is more related to the commitment of brokerage firms to contribute to the excitement of the very first listing rather than a genuine desire to sell the securities involved.

During the trading sessions on November 23 and 24, 2023, all the purchase offers for bonds that were made and subsequently refused by bondholders concerned longer maturity values (7 years). This is further proof that despite the long maturity period, holders of this category of securities remain confident in the stock’s upward trend in the market.

First time in the Cemac Region

As a reminder, the 2023-2031 bond issuance is the 7th such operation successfully carried out by Cameroon on the sub-regional financial market and the first with multiple tranches experienced in the Cemac zone. Cameroon embarked on this experiment due to increasingly challenging market conditions, with high interest rates resulting from the tightening of monetary policy by the central bank.

This type of operation allows investors the flexibility to subscribe to longer maturities at higher interest rates or shorter maturities at lower interest rates. This flexibility offered to subscribers undoubtedly contributed to the success achieved by Cameroon in this operation, during which the government was able to raise more than the targeted CFA150 billion.

Investors holding these Cameroonian bonds, who do not wish to hold them until maturity, can now sell them on the financial market for cash. Transactions may result in a capital gain or discount, depending on the interest investors show (demand) in the market during trading sessions.

Source: Business in Cameroon

Fitch Ratings has altered Cameroon’s outlook from stable to negative while maintaining its long-term foreign-currency issuer default rating at the “B” level.

The adjustment in outlook is attributed to rising liquidity pressures arising from heightened spending requirements, as well as challenging conditions in both domestic and external market financing, as stated in a statement by the rating agency on Friday.

Furthermore, Fitch highlighted structural deficiencies in public finance management and noted the country’s exposure to downside risks in the budget balance stemming from political and social pressures as contributing factors to the outlook revision.

“It was revealed in July that the authorities were late in making external debt service payments to one commercial creditor on four occasions between January and November 2022, underscoring weak debt management capacity and the extent of liquidity pressures,” the report mentioned.

Fitch anticipates that Cameroon will maintain a moderate budget deficit of 1.3 percent of GDP in cash terms in 2023 and 1.4 percent in 2024.

Despite this, the rating agency projects an increase in real GDP growth, reaching 3.8 percent in 2023 compared to 3.6 percent in 2022. Additionally, Fitch foresees a further rise to 4.1 percent in 2024 and 4.4 percent in 2025.

Source: MENAFN

On 31 October 2023, two staff members of the African Development Bank Group based in Addis Ababa were unlawfully arrested, physically assaulted, and detained for many hours by elements of the security forces without any official explanation.

We are pleased that the Prime Minister of Ethiopia immediately acted when he learnt of the incident, ordered the immediate release of the affected staff and promised to order an immediate investigation into the incident.

This is a very serious diplomatic incident, and the African Development Bank has since lodged a formal complaint with the Ethiopian authorities. For their part, the government has formally acknowledged our complaint, recognised the gravity of the incident, and reassured us that all those involved in breaking the law will be thoroughly investigated and brought to justice, ensuring transparency and full accountability.

Furthermore, the government has also reassured the African Development Bank that its staff in Ethiopia and those travelling to the country on mission will continue to enjoy full respect of their rights, privileges and diplomatic immunities under the Vienna Convention on Diplomatic Relations as well as the African Development Bank’s Host Country Agreement with the Government of Ethiopia.

The African Development Bank values its excellent relations with the government of Ethiopia and is currently engaged with the authorities, through diplomatic channels, concerning the incident.

The African Development Bank’s management would like to reiterate its commitment to the safety, security, rights and privileges of all its staff in all countries where the Bank operates.

The African Development Bank wishes to assure all its partners that its operations in Ethiopia have not been affected by this incident.

Culled from ADBG

Seventy-seven private companies were denied government contracts last year, according to a document presented last October 27 by the National Anti-Corruption Commission (Conac).

The decision followed cases of irregularities identified in the execution of the contracts previously awarded to them. These include issues such as incomplete projects, abandoned construction sites, and financial shortcomings.

As per the Public Contracts Code, the ban on participating in public procurement cannot exceed two years. Further violations by the same companies might lead to permanent exclusion, under regulatory guidelines. Apart from these bans, Conac did not outline any additional sanctions imposed on the affected companies.

Individuals or companies facing these restrictions are not eligible for administrative purchase order procedures or public contracts. While the government sees this as an effective means to filter bidders, some industry players believe it’s not effective against providers who simply change their company names or managers and reapply. In 2020, the Ministry of Public Contracts published a list of 369 providers suspended from public procurement, particularly for abandoning construction sites.

Source: Business in Cameroon

Banque Atlantique Cameroun, a banking institution of systemic importance, has been in legal operations in the Cameroon’s banking market since 2009 and today, posts exceptional results driven by a dynamic evolution of its main indicators. These results served as basis for the award of the prize to the Best Performance in 2022 during Finance Week organized by EcoMatin Magazine.

In a bid to reach operational excellence and sustainably improve its infrastructure, banque atlantique Cameroun has embarked on a complete overhaul of its information systems, to acquire the best-in-class technologies and provide its valued customers with the best experience at its touchpoints.

Interieur

Based on the foregoing, banque atlantique Cameroun wishes to announce the migration of its core banking system and other technological and communication infrastructures, towards more modern, more stable, more efficient, more automated, and more secured systems.

For this purpose, banque atlantique Cameroun will observe a necessary shutdown of its systems, services, platforms and applications from Wednesday, November 1st to Saturday, November 4th, 2023. However, our Automated Teller Machines (ATMs) will remain in operation throughout this period. The restart of the systems is scheduled for Monday, November 6th, 2023 at 8:00 a.m.

banque atlantique Cameroun wishes to reassure the public and especially its valued customers that this operation aims to sustainably improve the quality of its products and services; to standardize its operations; and to make the customers’ experience exceptional across its network.

The Bank is aware of the inconvenience caused by this situation and sincerely apologizes in advance, and as well appreciates its customers’ sense of patience and understanding.

Note that our Customer Relationship Center will be available to assist you from 8 a.m. to 6 p.m. by call to 8086.

About BACM

banque atlantique Cameroun is a subsidiary of Atlantic Financial Group (AFG), a panafrican banking group founded in 2006 by the Ivorian businessman, Bernard KONE DOSSONGUI. In 2020, for the first time in its history, the Bank is listed among domiciliary banks for World Bank and African Development Bank projects, thereby consolidating its credibility and financial stability. With 23 branches across the national territory, the Bank successfully improved its footprint in the market, with an outstanding growth of its main indicators, closing the financial year with a total balance sheet of XAF 806 billion, compared to XAF 570 billion in 2021, thus an increase of 41.3%. In October 2023, banque atlantique Cameroun was awarded the 2022 Best Performance Prize during the Finance Week organized by Ecomatin Magazine. Find out more on our website at www.banqueatlantique-cmr.com or follow us on our social media networks.

Source: Business in Cameroon

Cameroon’s Treasury raised a total of CFA49.8 billion on the Beac public securities market during the week of October 16 to 20, 2023, we learned. According to the operations report published by the central bank, these funds were raised through issues of 26-week fungible Treasury bills (BTA) (CFA39.8 billion raised out of CFA40 billion sought) and 52-week bills (the 10 billion sought were oversubscribed).

The weighted average interest rates for these transactions were 5.59% for 26-week BTAs and 5.85% for 52-week securities, for an overall average of 5.7%, well above the usual 3%. This rate is even slightly higher than the 5.67% average offered by the Cameroon Treasury on this market in September2023 but remains below the general market average, estimated at 6.29% that month.

Investor interest in Cameroonian bonds, which picked up again in September, continued in October, after the lack of interest seen at the start of the year. According to central bank data, the subscription rate for the 26-week BTAs was 99.80%, while 52-week securities were 140% oversubscribed. By way of comparison, the average subscription rates for this category of securities in Cameroon were 46.7% and 68.8% in June and August 2023 respectively.

Source: Business in Cameroon

Cameroon’s power company Eneo just released its 2022 annual report, outlining the damages it has suffered in 5 years in the North-West and South-West regions where the Anglophone crisis rages.

According to the report, “Eneo has maintained its operations in the North-West and South-West, despite the particularly deteriorated security conditions, which have jeopardized its agents, equipment, deployment and finances. A commitment to continue providing electrical service, while recording losses of around CFA15 billion per year, or over CFA75 billion in unbilled distributed energy and unpaid billed energy over the last 5 years”.

Continuity of service in the face of insecurity has been maintained, thanks to the good condition of distribution lines and transformers. As of the end of 2022, the availability rate stood at 84% in the South-West region and 80% in the North-West.

However, as the company points out, the above-mentioned condition of the distribution network and transformers during the period under review contrasts with the deterioration of other electrical equipment installed in this part of Cameroon.

Vandalized equipment

Many out-of-service facilities are primarily concentrated in what are termed “red zones,” where approximately 50% of infrastructure in the South-West and 80% in the North-West are affected. These facilities have fallen victim to vandalism or natural deterioration. Efforts to rehabilitate these structures are underway, taking into consideration safety measures.

Eneo is working with both willing residents and the authorities. The risk to field teams is permanent. “It is in this context that network extension work (some twenty kilometers more in the Fako region) and the reconstruction of destroyed networks have been carried out”, the company said.

The Anglophone crisis has been a burden on businesses operating in the affected regions. Many of them have experienced vandalism of their equipment and have had their employees abducted, subjected to violence, and even killed. Faced with this climate of insecurity, numerous economic operators have had to relocate their activities. Others, like the CDC, a state-owned agro-industrial unit and the second-largest employer in the country after the central administration, had to temporarily suspend their operations. However, they have gradually resumed activities following an observed period of calm on the ground.

According to government estimates, the crisis led to a national loss of 0.8 percentage points of GDP growth in 2019 and 0.3 percentage points in 2020. “These growth point losses correspond to a cumulative real loss in national GDP of CFA421.3 billion between 2017 and 2020,” said the Minister Delegate to the Minister of the Economy, Paul Tasong, while addressing the members of parliament on November 23, 2021. He was presenting the Reconstruction Plan for the North-West, South-West, and Far North regions. Similarly, due to this crisis, the value of trade between Cameroon and Nigeria between 2015 and 2019 decreased from CFA15.6 billion to CFA2.9 billion, representing an 81% decline. “These declines are observed in both exports (-68.9%) and imports (-85%),” Paul Tasong explained.

Source: Business in Cameroon

The Cameroonian Ministry of Finance issued a note Tuesday informing of the signing of a new cooperation deal with China. The document, signed as part of a visit by Minister Louis Paul Motazé to Beijing, aims to “eliminate double taxation on income and prevent tax evasion and avoidance.”

According to the Organization for Economic Co-operation and Development (OECD), double taxation, recognized as a barrier to trade and investment between countries, “arises when comparable taxes are imposed in two or more states on the same taxpayer in respect of the same taxable income or capital, e.g. where income is taxable in the source country and the country of residence of the recipient of such income.” To avoid this practice, which experts believe hampers international trade, cross-border investment, and the movement of people, states generally signs tax treaties.

National Development Strategy 2020-30

The Ministry of Finance revealed that the new agreement between Cameroon and China is the fruit of “a long negotiation process that began in 2013”. It marks “a decisive step in the implementation of the National Development Strategy 2020-30 (SND30) and towards the emergence of our country by 2035″. “Since China is one of Cameroon’s leading economic and trade partners, it was necessary to negotiate a tax agreement to remove tax obstacles to trade between the two countries, in particular the double taxation of companies operating in both countries,” the ministry explained.

Over the past two decades, China has become Cameroon’s leading customer (25.8% market share in 2021, according to the INS) and supplier (17.5% market share in 2020) as well as a leading investor. According to data contained in the 2021 World Investment Report published by UNCTAD, the stock of foreign direct investment (FDI) captured by Cameroon between 2000 and 2020 is estimated at $9,026 million (CFA 5,434.3 billion), mainly thanks to China. “Between 2000 and 2014, Cameroon captured CFA 2,750 billion in foreign direct investment, including CFA 1,850 billion from China. This represents around 67% of FDI entering Cameroon”, points out a document from the Presidency of the Republic, citing UNCTAD data.

The Cameroonian government seeks through the new agreement with China to further enhance the existing level of economic cooperation with the Asian country. “This agreement will undoubtedly boost trade between Cameroon and China, and attract even more Chinese investment to Cameroon,” the Finance Ministry said.

New mining projects in the pipeline?

The signing of this tax agreement occurs at a time when the Cameroonian government is embarking on several mineral exploitation projects, many of which are of significant interest to China. One such project is the Mbalam-Nabeba mining project, a world-class iron ore deposit spanning Cameroon and Congo.

Cameroon has chosen Bestway Finance, an investment vehicle allied with China’s AustSino, to build the railroad that will make the deposit exploitable. The license to mine the deposit was awarded on August 17, 2022, to Cameroon Mining Company, also linked to Bestway Finance, which recently announced agreements with at least four Chinese companies for the project. At the Lobé iron ore deposit in Kribi, in the southern region of Cameroon, China’s Sinosteel was awarded the operating license signed on July 1, 2022.

By inking this agreement with China, Cameroon now has 15 double taxation treaties and two global multilateral agreements. On a bilateral basis, these include agreements signed with France (1976), Canada (1988), Switzerland (1990), Tunisia (1999), Morocco (2012), South Africa (2015), the United Arab Emirates (2017), Germany (2017), the Czech Republic (2023) and the six Cemac member countries. However, these agreements do not always guarantee an increase in FDI for Cameroon. For example, despite signing the agreement with the United Arab Emirates in 2017, the first investment from that country has yet to materialize.

Source: Business in Cameroon

Only a few months after their release, forgers have already found a way to make the counterfeit versions of the new range of banknotes put into circulation on December 15, 2022.

Pending the dismantling of the counterfeiting network, Beac Governor Abbas Mahamat Tolli (pictured) called on the population to be more vigilant when handling these banknotes. “I invite users to be very careful every time they make transactions, and to make sure that the bills they receive are genuine”, he said at the end of the FY2023 third session of the Monetary Policy Committee (CPM), held on September 25 in Douala.

Abbas Mahamat Tolli pointed out that the new range of banknotes currently in circulation contains several security features that enable users to detect the real from the fake. “So far, there hasn’t really been a forgery that we’re afraid of. And the level of forgery is very minimal. People are not very vigilant”, he continued.

Indeed, the banknotes put into circulation on December 15 feature numerous security features, between nine and eleven in all, depending on the denomination. These features are visible and sometimes invisible to the naked eye. A special feature of these bills is that they can be identified by the visually impaired, thanks to tactile lines, which can be felt when touched, depending on the notes.

Source: Business in Cameroon