By Elias Ngalame
Cameroon is among the world’s poorest countries faced with ballooning debt service payments, record high refinancing costs, limited access to markets, and severely reduced capital inflows. Without action, 2024 will see a further rise in debt vulnerability, potentially leading to reversals in development outcomes, reports the World Bank.
The country’s external and internal debt has continued to rise above the CEMAC threshold according to data from the national sinking fund (CAA). The latest CAA report indicates that Cameroon’s public sector debt stood at CFA13,070 billion at the end of June 2024, marking a 4.9% year-on-year increase. Of this total, 93.5% is direct central government debt (CFA12,219 billion, or 40.4% of GDP.
At the 4th Forum on China-Africa Cooperation (FOCAC) held in Beijing, Cameroon’s President Paul Biya made a strong call for increased Chinese loans for the country’s road infrastructure. His request accordingly is aimed at boosting the development of roads and other large-scale projects in Cameroon.
“We are set to launch our second-generation flagship projects soon, including Phase 2 of the Yaoundé-Douala highway, the Edéa-Kribi highway, the Douala-Bafoussam road, the Yaoundé bypass, the Ebolowa-Akom 2-Kribi road, the Ngaoundéré-Garoua road, and the Maroua-Kousseri road,” President Biya announced during his meeting with Chinese President Xi Jinping on September 4, 2024. He added that these projects present key investment opportunities for the Cameroonian government and Chinese companies.
Experts say realizing these projects will entail more loans from China that has become Africa’s top bilateral lender.
“With China now Africa’s top bilateral lender, the visiting heads of state Africa are bringing expectations of a major concession on debt restructuring,” reports say. Reports from FOCAC summit notes that when it comes to restructuring, China has tended to focus on extending maturities rather than writing off debt, though details of agreements reached – or conditions of the original loans – remain scant.
In his traditional end-of-year address in 2023, President Biya had already mentioned the planned start or resumption of several road projects in 2024. He specifically noted that negotiations over the Ebolowa-Kribi road, which had faced environmental issues, were moving forward positively. Additionally, he gave orders for the rehabilitation of the Ngaoundéré-Garoua road and emphasized the need to keep pushing for the completion of the Mora-Dabanga-Kousséri road and the rehabilitation of the Edéa-Kribi and Douala-Bafoussam roads.
The China First Highway Engineering Corporation (CFHEC) was selected to handle Phase 2 of the Yaoundé-Douala highway, which spans 136 kilometers and is valued at CFA812.8 billion. As for the Edéa-Kribi road (107 km), rehabilitation work was set to start in 2023 and expected to finish by 2027, with an estimated cost of CFA102 billion. This project is partially funded by the African Development Bank (AfDB).
Other significant projects include the Yaoundé bypass, which has a projected cost of CFA1,264 billion, and the Ebolowa-Akom 2-Kribi road (179.2 km). The rehabilitation of the Ngaoundéré-Garoua road (242 km) is particularly vital to Cameroon’s economy, as it is part of the Douala-N’Djamena corridor, through which about CFA350 billion worth of Chadian goods pass every year. The Mora-Maroua-Kousséri road (205 km), connecting Cameroon to Nigeria and Chad, is also a strategic route.
President Biya stressed that Cameroon needs substantial funding to achieve its goal of becoming an emerging economy by 2035. “Our goal is to build a stronger economy based on competitive local industries capable of transforming our mineral and agricultural resources to meet domestic needs and export in large quantities,” he said. He urged China and its businesses to enhance their support to help realize this vision.
He also expressed hope that ongoing talks with China’s Eximbank would lead to clear and straightforward financing agreements, avoiding any misunderstandings that could delay project execution. Biya acknowledged the importance of Chinese investments in Cameroon’s development.
According to Cameroon’s National Institute of Statistics (INS), trade between China and Cameroon reached CFA1,178.1 billion in 2023, up 24.1% from the previous year. China is Cameroon’s largest supplier, accounting for 18.9% of the market, ahead of India and France. China is also the largest investor in the country. In 2023, Cameroon attracted an estimated $799 million in foreign direct investment (FDI), largely due to Chinese involvement.
