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Infrastructural Projects Sentence Cameroon To FCFA 5000 Billion Debt 

Gov't keeps borrowing for projects like this which are never completed

Gov’t keeps borrowing for projects like this which are never completed

By Yerima Kini Nsom

The funding of infrastructural projects is sentencing Cameroon to circa FCFA 2000 billion debt burden.
According to a report by the National Sinking Fund, such an amount swells Cameroon debt that stood at FCFA 5000 billion by the end of the first semester of 2016.

This amount represents 28.8 percent of the country’s Gross Domestic Product, GDP.

Experts are expressing fears that if the authorities do not regulate the way they are borrowing, Cameroon will soon carry the stigmatising crown of a heavily indebted country once again.

This, to them, will be a backward kink 10 years after Cameroon reached the completion point of the Heavily Indebted Poor Countries Initiative, HIPC-I, in June 2006.

The current move in which President Biya is borrowing FCFA 75 billion to provide laptops for 500,000 university students, has been criticised as another jinx of heavy indebtedness of the country.

As time ticks away, Cameroon will be grappling with the reimbursement of the FCFA 6.67 billion that was borrowed for the construction of dams in the country.

There are the Lom Pangar Hydro-electric Dam in the East Region and the Mem’vele Hydro-electric Dam in the South Region.

Since the country must borrow in order to pursue its development objectives, it must be sorrowing to pay back the FCFA 550 billion that it borrowed for the construction of structures for the 2016 and 2019African Cup of Nations.

A huge debt of FCFA 154 billion is weighing on the country’s shoulders. The State borrowed the money for the construction of a dual carriage way that will link the Nsimalen Airport to the Yaounde city.

In August 2016, the Minister of Economy, Planning and Regional Development, Louis Paul Motaze, signed an agreement with Italian Bank, Intesa Sanpaolo.

The substance of the agreement was FCFA 139 billion that the bank will lend to Cameroon for the construction of a multi-sport complex at Olembe in the Northern suburbs of Yaounde.

This money represents 85 percent of the total cost of the project that stands at FCFA 163 billion.

The State of Cameroon also went with a borrowing bowl before the EXIM Bank of China to be able to embark on the construction of the double lane road that will link Yaounde and Douala. The road that covers 215 kilometers will cost FCFA 241.4 billion.

The State signed a contract with the first China Highway Engineering Company Limited on August 8, 2011, for the construction of the road.

The ongoing construction of the second bridge over River Wouri in Douala is estimated FCFA 29.5 billion. It was when Cameroon sealed the deal with the French Development Agency that President Biya inaugurated the construction of the bridge on November 14, 2013.

The cost of all these projects hunches Cameroon with a huge foreign debt burden of close to FCFA 2000 billion.

Even though Cameroon must pursue its development objectives, observers are expressing fears that the country was becoming heavily indebted again.

According to standards in the Central African Economic and Monetary Community, CEMAC, a country is heavily indebted when its debt burden rises above the 70 percent of the Gross Domestic Product, GDP.

But the Minister of Economy, Louis Paul Motaze, says the current rate of Cameroon’s indebtedness is no cause for concern.

To him, the country’s foreign and domestic debts are around 25 percent of the GDP.

But Senior Economist, Dr Ariel Ngnetadem, says it stands at above 25 percent of the DGP and should be a cause for concern to all the stakeholders.

The General Manager of the National Sinking Fund had indicated that between June and December, 2015, Cameroon’s debt represented 25.6 percent of the GDP.

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