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Sonara’s activity suspension could increase defaulted debts by about 20% (COBAC)

Business in Cameroon | In the aftermath of the May 31, 2019, fire outbreak at Société nationale de raffinage (Sonara) in Cameroon, the Central African countries’ banking commission (Cobac) published an analysis on the said company it qualifies as “grandstanding”.

According to the commission, the suspension of the activities of Sonara has a great impact on defaulted debts in Cameroon.

“The estimate of gross credits granted to Sonara was XAF119.3 billion at end April 2019, representing 3.3% of the volume of overall credits. Let’s suppose that Sonara is unable to face its financial commitment due to the suspension of its activities, despite the about XAF87 billion deposit at end April 2019, for urgent cases mainly, the volume of defaulted debts in the Cameroonian banking system would be 19.6% instead of 16.2% at end April 2019,” Cobac writes. This shows a greater worsening of the client portfolio, the institution adds.

The commission’s analysis is not reassuring for a sector where the defaulted debts owed to commercial banks in Cameroon in 2016 was XAF489 billion. Worse, with XAF106 billion defaulted debts in the microfinance sector in 2017, Cameroon concentrated 79% of the overall bad debts within CEMAC at the time.

Let’s note that Sonara is the main refinery in Cameroon with a yearly production capacity of 2.1 million tons of crude oil.

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  1. I wonder if these CPDM propagandists ever read what is happening here. Didn’t they tell us that the economy was doing? Didn’t they say their economy would grow 4.5% that Amba was a big joke? Now virtually all (80%) bad debts from the central African CFA region are attributable to Cameroon since 2017? Hahahaha the truth always sets you free.

  2. After shouting, FORCE MAJEURE, the GOC has decided to keep the report of the SONARA commission a state secret.

    Commissions in LRC are a waste of precious time, energy and taxpayers’ money.
    1. An Anglophone Colonel was murdered in Bamenda. The GOC promised an “enquête”. To date, nothing has been revealed about that incident
    2. Cameroon’s disgraceful Performance in Brazil was investigated by a commission. To date, nothing has been revealed to Cameroonians
    3. etc.

    In my opinion, Cameroonians are already commission-weary. This is so because commissions of inquiry have become nothing but a cynical instrument for public lulling, scapegoating and buck-passing. Nothing more, nothing less.
    A Commission of inquiry in LRC is therefore considered as a sick joke.

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