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The Central African Banking Commission COBAC has warned that the suspension of the activities of the National Oil Refinery company, SONARA, has greatly affected defaulted debts in Cameroon.
An analysis conducted after the incident that hit the company on May 31, shows that the volume of of defaulted debts in Cameroon’s banking system,will increase.
“ The estimate of gross credits granted to SONARA was 119.3 billion francs FCA 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 87 billion franc CFA 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,” the Commission emphasized .
Going by the revelation, the commission’s analysis is not reassuring for a sector where the defaulted debts owed to commercial banks in Cameroon in 2016 was 489 billion francs CFA. Thereby, with 106 billion francs CFA defaulted debts in the microfinance sector in 2017, Cameroon concentrated 79% of the overall bad debts within CEMAC at the time.
According to COBAC, the suspension of the country’s main refinery, with a refining capacity of 2.1 million tons of crude oil per year, has an impact on rate of outstanding bank loans in Cameroon.
The management of SONARA decided to suspend contractual obligations after fire burnt down four of the company’s 13 production units.
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