As banks across Africa navigate a challenging economic climate and come to terms with an increasingly digitised continent and the immense opportunity this brings, there’s an opportunity for bankers and banks to battle it out for top honours in the prestigious pan African competition, Battle of the Banks Africa 2023.

The winning bank and their team of star bankers will be regarded as the best new talent on the continent in terms of business and financial performance, with a sharp understanding of risk management strategies and corporate governance.

In the first-of-its-kind in Africa, ICAP Training Solutions has partnered with global Capital Markets Professional Services firm Andile, to bring ProBanker’s Battle of the Banks simulation engine to market. Inviting Africa’s young bankers to enter. The Battle of the Banks Africa is a robust competition and training opportunity that will see entrants gain insight into how different areas of a bank interact to enhance overall business and financial performance.  In addition to this, entrants will develop important skills and understanding of how macroeconomic indicators impact the decision-making process at the highest levels of bank leadership.

ICAP Training Solutions’ CEO Yonatan Rom says: “The Battle of the Banks Africa provides a simulated environment where young bankers must think about what it takes to run an entire organisation and make strategic, corporate governance, risk and financial decisions. The simulated banking market provides practical experience and learning in a hands-on manner.”

The simulation provides bankers with skills that cannot be obtained anywhere else, other than through years of experience. Those banks who enter teams also benefit from the training as entrants can apply their learnings to their everyday roles and responsibilities back in the office.

Alongside the learning and upskilling, the top performing teams progress to the final four “shoot-out” on 22 November. Here teams will prepare a 4-quarter performance report which will be delivered via a 25-minute presentation on their simulated bank’s performance.

The ‘Battle’ is based on stock performance, net income, loan performance, Basel ratio and capitalisation usage. Each of these areas is afforded its own weighting metric and has an overall weighting of 65%. Making up the other 35% is the conceptual learning (15%) and the simulated assignments (20%).

“Our intention behind Battle of the Banks Africa is to drive practical experience, provide a unique learning simulation, develop skills and business acumen, give access to online training tools and webinars and enable networking with other young bankers from across Africa. The winners will emerge as the best young bankers in Africa,” says Pieter Kelbrick, Andile’s Managing Director.

To enter as a team, visit www.battleofthebanks.org and sign-up before 15 September 2023. Entrance costs $2,750 for a team of four. First prize winners will receive a prestigious floating trophy for the best performing young bankers on the continent, other prizes to be awarded are individual winners’ trophies, gold medals and certificates as well as a $2000 ICAP Academy coupon. There are also prizes for the second, third and fourth winners. The Most Aggressive Bank, Most Cautious Bank and Best Bank presentation in the Grand Finale will also receive prizes.

MTN Cameroon borrowed CFAF91.5 billion (at the current South African Rand value) in the first half of 2023, according to data collected by Business in Cameroon. The funds, which represented almost 98% of the company’s operating expenses during the period, were raised in the form of syndicated loans from undisclosed banks.

In 2022, it took no new loan and even settled almost CFAF18 billion of debt. What’s more, as of January 1, 2023, its net cash position was positive, at CFAF29.15 billion.  However, at the end of June this year, its cash position showed a net debt of CFAF13 billion.

One plausible hypothesis to explain this situation is the impact of its accounts being frozen following the legal action initiated by Cameroonian business mogul Baba Danpullo to dispute what he considers the illegitimate expropriation of his assets in South Africa. According to internal MTN sources, the telecom operator had to indebt itself to ensure the continuation of its operations.

Uncertainties

MTN Cameroon’s solid performance –with a CFAF156 billion turnover, a 36% operating margin, and 51.4% market share– as of the end of the first half of 2023 strengthens its credibility with Cameroonian banks. However, this confidence could be challenged.

Financial data for the first half of 2023 show that its interest-bearing liabilities (CFAF95.8 billion) exceed its liquidity (CFAF83 billion). What’s more, some of this cash has been seized by the courts, making it impossible to use it for day-to-day operations. It is also uncertain if the telecom operator’s holding company (based in South Africa) will easily intervene in the event of challenges since its debt has also grown to 1.5 times its equity.

If the Cameroonian courts do not quickly rule on the case, MTN Cameroon could have to face short-term liquidity issues. Developments in the telecommunications sector will also be decisive for the operator. A slowdown in activity could exacerbate its difficulties in meeting its financial commitments. This should be of concern to creditors and suppliers because, in an unfavorable economic climate, they may have to wait longer for payment.

Source: Business in Cameroon

Nigeria has cut its electricity supply to Niger after West African neighbours imposed sanctions on the junta that ousted the country’s elected leader last week, a Niger power company source has told AFP.

“Since yesterday, Nigeria has disconnected the high-voltage line transporting electricity to Niger,” a source at Niger’s power company Nigelec said.

Niger depends on Nigeria for 70 percent of its power.

Source: France 24

Moody’s downgraded Cameroon’s credit rating to Caa1 from B2, citing delayed external debt payments in late 2022 and this year, including one to Deutsche Bank Spain that the ratings agency said it classed as an “incident of default”.

“Moody’s rating action reflects the emergence of cash management and liquidity challenges for the government,” the ratings agency said late on Thursday as it cut both the country’s foreign-currency and local-currency ratings.

“The missed payments came after a series of liquidity demands on the government, including higher fuel subsidies and increased off-budget spending on growing security needs.”

The government of Cameroon, which has both French and English-speaking regions, has been fighting Anglophone separatists in the north west since 2017, while Islamist Boko Haram militants carry out periodic attacks in its Far North region.

These conflicts “create significant off-budget spending pressures and weigh on the government’s available liquid resources,” Moody’s said, adding that there was “very weak cash and debt management capacity.”

Cameroon’s finance ministry did not immediately reply to requests for comment. Deutsche Bank declined to comment.

Cameroon’s only dollar-denominated international bond, a 10 year issue maturing in 2025, fell around 0.2 cents to 95.9 cents on the dollar on Friday, in line with broader market moves US133653AA31=TE. A 10-year euro-denominated international bond was fractionally lower too at 72.5 cents US133653AA31=TE.

Moody’s put a “stable outlook” on its new ratings.

Source: Reuters

Camair-Co is amongst four state-owned enterprises to be placed under a performance contract by November 2023 in line with Cameroon’s commitment to improve the viability of its public enterprises under the supervision of the International Monetary Fund (IMF).

This is according to the IMF’s Fourth Review in July 2023 of its Extended Credit Facility (ECF) and Extended Fund Facility (EFF) to Cameroon, which allowed for an immediate disbursement of about USD73.6 million to the West African country. The latest allocation brings total IMF disbursements to Cameroon under the arrangements to about USD493.6 million.

While the medium-term outlook for the country remains positive, provided reforms continue, the IMF called for structural reforms to be accelerated. According to the IMF, the Cameroonian government has committed to strengthening public enterprise management and the performance of its SOEs to improve service delivery and limit fiscal risks.

To this end, diagnostic studies have been completed at four state enterprises – the technically-bankrupt national carrier Camair-Co; the Port Authority of Douala (PAD); Cameroon Telecommunications (CAMTEL); and Cameroon Water Utilities Corporation (CAMWATER). In the first phase, these companies will be placed under performance contracts by November 2023 which will specify their obligation to meet a public service mission, the evaluation of unit costs (as a basis for paying subsidies) and quality indicators to be published with evaluation reports.

During the second phase, the government will gradually reduce subsidies to underperforming public enterprises. Large industrial SOEs, notably PAD, will be listed on the Central African Stock Exchange (BVMAC). A planned listing of Camair-Co is not mentioned in the IMF report.

Still, as reported, the airline’s possible listing was alluded to in a report of a technical committee for the rehabilitation of SOEs (Commission Technique de Réhabilitation des Entreprises du Secteur Public – CTR). In 2020, Cameroon’s president, Paul Biya, also told the government to urgently develop a plan that restructures and revives Camair-Co to facilitate selling off 51% to a strategic private investor.

According to the CTR, Camair-Co needs to clean up its balance sheet and consolidate its financial standing before any divestment. To settle part of its liabilities, it would transfer its overall debt as of December 31, 2020, to the Cameroonian state and undergo financial restructuring. The government would then set up a civil aviation fund to compensate the state-owned carrier for losses on domestic routes.

Yet the IMF recommends that government subsidies to SOEs be better prioritised. “As part of the diagnostic studies of each public enterprise, the authorities will assess the subsidies with the aim of reducing those allocated to the weakest performance. In this context, the authorities have initiated a study to be finalised in November 2023 of all the approved or administered prices of the products of public enterprises with the aim of reviewing, if necessary, their formula for determining prices and/or their possible liberalisation,” it stated.

Camair-Co has been loss-making since its inception in 2011. It ended 2021 with negative equity of XAF115 billion Central African francs (USD190.4 million) against a share capital of XAF21.8 billion (USD36.1 million), meaning the airline is technically insolvent.

Camair-Co was the subject of a recovery plan proposed by Boeing Consulting in 2016, which included settling its debt at the time, injecting new capital, resizing its network, and modernising its fleet, but the plan was never implemented.

The airline has a fleet of nine aircraft, of which only five are in service. The fleet includes two B737-700s (of which only one is active); one parked B767-300ER; two DHC-8-Q400s, two parked MA-60s, one EMB-135LR and one EMB-145LR (both wet-leased), according to the ch-aviation fleets advanced module.

Source: ch-aviation

Cameroon opened, Monday (July 17), subscriptions to its 13-week treasury bills (T-bill) on the central bank BEAC’s money market. The subscriptions, which will close today (July 19), aim to fetch the country a CFAF10 billion envelope to pay off a CFAF8 billion debt contracted 26 weeks earlier. 

This new fund-raising follows Cameroon’s first major success in that market since January 2023. Indeed, after several unsuccessful operations, on July 10, at the end of a 26-week T-bill issue, the country attracted CFAF54.5 billion in subscriptions, higher than its CFAF50 billion target. 

To keep the weighted average interest rate at 5%,  the country retained just CFAF49 billion. It is worth noting nevertheless that to attract investors, Cameroon agreed to a 5% interest rate on its short-term securities, which is the same rate it was offering for 4-year bonds ten days earlier. The rate is higher than the 3% it used to offer investors for the same type of security in the same market.

To succeed in its fundraising operations, Cameroon is adapting to the generalized rise in interest rates in that market following the tightened monetary policy adopted by the BEAC. It will surely do the same for the ongoing issue.

Source: Business in Cameroon

Cameroon’s recovery has continued, despite security concerns and external risks, including tight global financial conditions and increased oil price volatility.

Cameroon is a fragile and conflict affected state, with drivers of fragility ranging from insurgency and conflicts along its borders and in neighboring countries, to poor governance, social exclusion, and climate change.

Nevertheless, economic prospects remain positive in the medium term, provided reforms continue, and the external environment is supportive.

The three-year arrangements under the Extended Credit Facility (ECF) and the Extended Fund Facility (EFF) approved in July 2021 amount to SDR (Special Drawing Rights) 483 million (about US$689.5 million, or 175 percent of quota). Completion of the fourth review will allow a disbursement of SDR 55.2 million (about US$73.3 million).

Culled from the IMF

Cameroon spent CFAF45.7 billion on fish imports in 2021, according to the 2021 sectoral note on the animal industry and fisheries sub-segment published by the stats institute INS. That year, fourteen countries supplied 60,554 tons of frozen fish to Cameroon but, there were three main suppliers, the Netherlands, Uruguay, and Mauritania notably. They accounted for over 70% of Cameroon’s fish imports during the said period.

The Netherlands was the leading supplier, accounting for almost 24,500 tons of fish valued at just over CFAF22.8 billion. It was followed by Uruguay, the Latin American country that signed a framework agreement with Cameroon, in 2022, to intensify cooperation -that framework was submitted to be reviewed by President Paul Biya in June 2023.  The country supplied Cameroon with over 12,000 tons of fish, worth more than CFAF4 billion.

During the period under review, Mauritania supplied the Cameroonian market with 7,237 tons of fish, valued at a little over CFAF7.5 billion.  Two other African countries closed the top5 of Cameroon’s fish suppliers in 2021. These are Angola (6,802 tons for CFAF3.1 billion spent) and Senegal (2,393 tons for just over CFAF1.5 billion).

Although China has become Cameroon’s leading trade partner in recent years, it was the 10th largest supplier of frozen fish in 2021. According to INS data, it exported only 573 tons of fish to Cameroon behind India (1,555 tons), Spain (1,478 tons), Morocco (1,163 tons), Argentina (998 tons), and even Russia (881 tons).

Officials have noted that frozen fish, along with rice, significantly impact Cameroon’s trade balance despite its approximately 400 kilometers of coastline renowned for its fish stock. Unfortunately, this coastline is mainly exploited by foreign fishermen who supply the commercial circuits of their home countries.

Source: Business in Cameroon

The Africa Finance Corporation (AFC) has two new shareholders, including Cameroon’s public pension fund, the CNPS. The Pan-African Corporation announced the news on June 20, 2023.

“We warmly welcome CNPS and SBM Capital Market Securities as investors in AFC. This step is evidence of AFC’s role as a preferred partner for infrastructure investment on the continent, to deepen economic integration, enable import substitution, and develop Africa’s manufacturing and industrial capacity,” commented Samaila Zubairu, CEO of AFC.

While the investment’s amount and the stake acquired by the CNPS are yet to be known, the move should, according to the pension fund, help it achieve its goal of bringing its annual return on financial investments to around XAF40 billion by 2026. “For the next five years, we intend to double the [financial investment income from 2021],” said CNPS boss, Alain Olivier Mekulu Mvondo Akam, in an interview with Cameroon Tribune, a state-owned newspaper. He referred to the increase in return on investments from only XAF7 billion in 2017 to XAF20.5 billion in 2021.

Last year, gains from financial investments stood at XAF24.2 billion, thus up by 18% YoY,   according to official data from CNPS. They are expected to increase further in 2023 following CNPS’s recent participation in the capital of Chanas Assurances Vie, another public pension fund investment. CNPS has joined the insurance company’s shareholding alongside the National Hydrocarbons Company (SNH), the state’s entity responsible for oil and gas exploration and production. These two state-owned enterprises have also recently offered to buy the assets of British investment fund Actis in ENEO, Cameroon’s power utility.

Established in 2007, the Africa Finance Corporation (AFC) is a pan-African financial institution that addresses the continent’s infrastructure deficit.

Source: Business in Cameroon