Aéroports du Cameroun wins first non-sovereign loan

46 million, approximately FCfa 30 billion. This is the amount of the finance agreement signed on 19 February 2016 in Yaoundé, the Cameroonian capital, between AFD and Aéroports du Cameroun (ADC), the public company managing the airports of the country.

These funds will be used to rehabilitate the runway pavements of the Douala International Airport, we learned.

But more importantly, this funding is the very first non sovereign loan signed by a Cameroonian public company. In other words, contrary to what has been the practice so far, this loan granted to ADC is not backed by the State of Cameroon. Which in a certain way, demonstrates the solvency of the company.

This first non sovereign loan from AFD to a public Cameroonian company is obviously an effect of the workshop organised in Yaoundé on 16 June 2015, during which seven companies owned by the Cameroonian State, including ADC, were informed on the criteria to access non sovereign financing from AFD.

“In a global world where competition is fierce, it is not anymore possible for us to limit ourselves to traditional sources of financing”, the Minister of Finance, Alamine Ousmane Mey, declared to justify the organisation of this training session.

But in truth, the subsidies and guarantees given by the Cameroonian State to its companies are seen as increasingly inefficient by experts, who see it as a sort of government bond which takes away from public companies any ambition or obligation to be competitive.

In a report on the Cameroonian economy, the IMF, who took the opportunity to point out the “mediocre results” of these companies despite being subsidised by the State, recommended to the government to condition said subsidies and other guarantees on increasingly rigorous statements of work.

In 2014, the regulatory body of the Cameroonian financial market, CMF, in a note to the government, asked that said government stop raising funds for its companies on the Douala Stock Exchange (Dsx), but rather encouraged the companies to come to the financial market on their own, in order to raise funds to carry out their projects.