State corporations move for non-sovereign loans from AFD

Seven Cameroonian companies whose capital is mostly State-controlled have been invited to participate on June 16, 2015, in a training workshop on the mechanisms of access to non-sovereign financing from the Agence française de développement (AFD), which have the peculiarity of not being guaranteed by the State.

"In a world where global competition is fierce, it is more possible for us to confine ourselves to traditional sources of financing," said the Minister of finance, Alamine Ousmane Mey, to justify the holding of this meeting which was attended by Camtel officials, airports of Cameroon (ADC), Sonara, Feicom, the autonomous port of Douala, Camwater and Cameroonian society of petroleum deposits (SCDP).

During this meeting, they discussed how to "prepare companies to better know the grid of the issuer, present the requirements necessary for obtaining a non sovereign loan, said Hervé Conan, the Director of the AFD in Cameroon.

Among these pre-requisites, companies must obtain a rating from a rating agency.

In December 2013, the Ministry of finance had already invited four (Camtel, SCDP, PAD and Camwater) of seven public enterprises cited above to an information seminar on the assessment of the risk of credit rating agencies, prior to any operation of fundraising on the capital market. So far, only Camtel, telecoms public operator attempted this experience with the Bloomfield Investment Agency, allocated to it by the BBB note.

The companies' poor results.

On the occasion of the meeting of December 2013, officials of the Ministry of finance had not hidden that this workshop was due to the will of the Government to gradually put an end to its policy of handouts, which takes the form of increasingly heavy subsidies and the State guarantees for loans by public and semi-public corporations.

Indeed, subsidies and guarantees by the Cameroonian State to its companies are increasingly considered ineffective by the experts, who see it as a kind of annuity that removes any ambition public corporations or obligation of competitiveness. In a report on the economy of Cameroon, the IMF, which emphasized on the "poor results" recorded by these companies, despite State subsidies, had recommended to the Government to impose such grants of specifications increasingly more stringent.

In 2014, the regulator of the Cameroonian financial market, the CMF, in a note to the Government, invited them to no longer mobilise funds on behalf of its companies on the Douala Stock Exchange (Dsx), but to encourage them to come in this financial market by themselves, to raise funds to carry out their projects.