Gov’t Companies in Distress: Sonara & Camair-Co’s Debt Estimated at FCFA 826bn

Sonara is the most indebted public company in Cameroon

 Camair Co and Sonara are the most indebted public companies in Cameroon, according to the recent note on public debt published by the National Sinking Fund (CAA).
    The note explains that out of the XAF833 billions of public companies’ provisional debt, XAF826 billion is owed by the two companies. With XAF704 billions of provisional debt, Sonara owes the majority (as it has been doing for years now) while Camair-Co owes XAF122 billion.
    The CAA indicates that the provisional estimate is not complete yet, since it is still collecting information to evaluate the real extent of public companies' and institutions’ debts.
    This means that the final estimate of public companies’ debts on September 30, 2020, would be higher than the current estimate given the problems they encountered lately and given their history of underperformance. For instance, the Technical Commission for the Rehabilitation of Enterprises in the Public and Para-public sectors recently revealed that in 90% of the public companies, employment costs exceed 30% of yearly turnovers and sometimes go as high as 70%.
    In 2017, the Ministry of Finance estimated the 37 public companies’ debts at XAF2,624.4 billion. At the time, Sonara, Camtel, Camwater, Electricity Development Corporation, and Sodecoton were the five most indebted public companies. Sonara’s debt was XAF763.2 billion, XAF554.5 billion for Camtel, XAF352.4 billion for Camwater, XAF140.4 billion for Electricity Development Corporation, and XAF113.1 billion for Sodecoton.
    On October 11, 2019, U.S. rating agency Moody's published a report on Cameroon’s economy. In its report, the rating agency estimated that public companies’ debts were weakening the government’s efforts to consolidate public finances.