Two major things characterise this dispensation: the innovation it brings into the country in terms of economic financing and its ability to portray the resource potentials of Cameroon. The Head of State in his end-of-year speech wasted no time in pointing out the importance of this new found avenue. First, it is an approach that is practical; second, funds mobilised through the treasury bonds or what some people now refer to as, “Obligatory Borrowing” will get all stakeholders (buyers, issuer, project managers and executors) in the whole gamut of responsibility.
The issuing and quick buying of the treasury bonds will certainly fast-track the execution of major projects, especially those targeted within the framework of the Obligatory Borrowing process. President Paul Biya in what certainly did not sound new to those who listened to him last year, recalled some of the factors that held back the projects from taking off. One of such, which, is of the making of Cameroonians themselves has to do with laxity. “We must acknowledge that the crisis and – one must say - a certain passiveness of some officials have had a delaying effect on their start-up”, he stated.
That notwithstanding, what remains assuring is the fact that several projects are “on track”. Of particular note, are the: Memve'ele and Lom Pangar hydroelectric dams and the Kribi gas liquefaction plant. Pending the negotiations that are already under way with interested groups for the others, it is perhaps important to underscore that even more projects than the ones cited by the Head of State are already in effective takeoff. These include transport infrastructure projects such as the Kribi Deep Seaport, the Ring Road project in North West, the Ayos-Bonis highway in the east, and the Kumba urban roads in south west and projects in the mining sector, notably the Nkamouna Cobalt-Nickel-Manganese production project near Lomié in the east.
In effect, the FCFA 200 billion raised through the treasury bonds will partly finance the following project: the Lom Pangar hydroelectric reservoir in the east with FCFA 72 billion, the Kribi gas fired plant in the south, CFA 7 billion, the Memve’ele hydroelectric power in the south, FCFA 12 billion, the Kribi Deep Seaport having FCFA 21 billion, the Ring Road project in North West, FCFA 12 billion, the Ayos-Bonis highway in the east, FCFA 11 billion and the Kumba urban roads in south west, FCFA five billion. The mining sector will be allocated 15 percent of the funds with FCFA 30 billion spent on the Nkamouna Cobalt-Nickel-Manganese production project and about six percent of the funds will go to agricultural projects and the rest to telecommunication.
In all 20 million bonds were issued with a coupon interest rate of 5.6 percent better than the 3.5 percent interest on fixed deposits offered by the country’s banks. The decision to finance projects through Obligatory Borrowing process symbolically indicates government’s determination to slow down from its traditional borrowing device; that of running to the international organisations in times of trouble and getting resources, sometimes under unsatisfactory conditions.
With the new system of financing, the country is forced to intensify the putting to use of its enormous resources in order to pay back the “loan”. “We can mobilize domestic savings and take advantage of current over liquidity of banks”, President Biya underlined. From every indication if this process produces palpable results in terms of project financing, it could be made sustainable.
