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Cameroon: Negotiations Underway for SONARA’s Reconstruction
Category :- Economy and Finance Author :- L J KINGAH 
Posted on December 2, 2020, 2:02 pm
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While disclosing how much it will cost to reconstruct SONARA, Cameroon Minister of Water and Energy - MINEE, Gaston Eloundou, says negotiations are underway but that it depends on the effective restructuring of its over XAF700 billion debt.

SONARA BURNT DOWN

MINEE Boss said, "Negotiations are already underway with technical and financial partners who have expressed interest in the reconstruction of this refinery. However, the finalization of these negotiations depends on the restructuring of SONARA’s large debt.”

He disclosed this during his address before the parliament on December 1st, 2020. The initial estimates from consulting firms show that SONARA’s reconstruction will cost about XAF250 billion, according to Minister Gaston Eloundou.

MINEE, Gaston Eloundou

Nevertheless, he indicated that, Cameroon government is “working hard to complete this restructuring” so as to allow “the gradual amortization of this debt".  

SONARA’S debts as of September 30th, 2020 was at was XAF704 billion, as the National Sinking Fund CAA revealed. This debt hiked following the May 31st, 2019 fire on this Cameroon refinery Limbé plant which destroyed the structure, almost rendering it useless.

SONARA

According to the IMF Country Report No. 20/48 focused on Cameroon, such huge debts is a huge threat to the banking system in Cameroon because, “A full provisioning of exposures to SONARA per COBAC’s regulation would wipe out more than half of the banking system’s capital within two years (150 billion provisioning requirements within two years, out of a total regulatory capital of 280 billion for the entire banking system),” 

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Tagged Keywords: IMF, Cameroon, SONARA
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