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Gov’t Launches Treasury Bonds, 2016-2021 To Finance Key Dev’t Projects 

By Joe Dinga Pefok

President Paul Biya

President Paul Biya

The Ministry of Finance has launched an operation to raise FCFA 150 billion at the Douala Stock Exchange, DSX, through a public investment process.

The money is intended to finance some key infrastructural projects in the country. Most of the projects are contained in the 2016 State budget that stands at FCFA 4234, 7 billon, indicating a 13.2 percent increase compared to last year.

The operation, which was launched in Douala, September 20, by the Minister of Finance, Alamine Ousmane Mey, is in line with Decree No. 2016/133 of March1, 2016, that empowered the Finance Minister “to resort to the issuing of public bonds worth FCFA 300 billion maximum, for the financing of development projects included in the Finance Law of 2016.”

Speaking at the occasion, the Minister said Government needs funds to invest in the infrastructural sector to spur development.

Attractive Interest Rate

The operation for the sale of the public bonds issue of 2016-2021 is led by a consortium of three financial institutions, namely: Afriland First Bank, EDC Investment Corporation, and Société Genéralé Cameroun, SGC.

During the launching ceremony, the GMs of Afriland First Bank, EDC Investment Corporation and SGC, Alphone Nafack, Adonis Seka, and Alexandre Beziaud, respectively gave details about the bond sales.

It was stated that the subscription for the bonds will officially kick off on September 27, 2016 and end on October 12, 2021.

Subscription will be open to all interested investors; individuals and enterprises in Cameroon, the CEMAC Zone, Africa and the rest of the world.

Each subscriber must indicate in the subscription form, where he or she is resident. The price of a bond is FCFA 10,000 and the minimum number of subscription is 30 bonds, which means a minimum investment of FCFA 300,000.

There are 150,000,000 bonds to be sold.

The Cameroon Government is offering an attractive annual interest rate of 5.5 percent to subscribers.

The Finance Minister has assured all that no tax will be imposed on the interests to be paid to all the subscribers resident in Cameroon.

“Investing in the State of Cameroon bond issue is a good deal for an investor.

A subscriber will be supporting the development of the nation with his or her investment, while at the same time reaping an annual tax free financial return on the investment.”

Government would also reimburse the capital by installments, over a period of four years (October 2017-2021).

FCFA 112 Billion Already Guaranteed

The three financial institutions disclosed that they have already found investors to subscribe to the State of Cameroon bond issue worth FCFA 112 billion.

The consortium appreciated the decision by the Government to raise funds for public investment projects through the bond project.

They affirmed their commitment to accompany the Government in the operation and development drive of the country.

“Like in past operations, we would do everything within the legal framework to ensure that the bond operation is a success. But for this operation to be successful, investors must be sure of the security of their investments and trust in the reliability of the Government.”

Minister Ousmane Mey asserted that since the consortium has already found subscribers worth FCFA 122 billion even before the campaign begun, it is a glaring indication of the high confidence investors have both in the Government and the State of Cameroon.

“Investors have confidence in the signature of the Cameroon Government and in the leadership of our Head of State.”

Besides the three financial institutions, the Sate of Cameroon bonds will also be placed in BICEC, Financial Capital, Cenainvest SA, BGFI Bank Cameroun, UBA Cameroon and CBC.

The Fourth Operation

This is the fourth public bond issuance to be launched by the Government.

The first operation was launched in 2010 to raise FCFA 100 billion. The second was launched in 2013 to raise FCFA 80 billon, while the third was launched in 2014 to raise FCFA 150 million.

The Minister of Finance expressed gratitude to investors for demonstrating confidence in the Government through their investments in the bond issuance.

To Ousmane Mey, the past three operations were a great success and enabled Government to raise FCFA 330 billion for the various development projects that were earmarked like the Bamenda Ring Road, the hydroelectricity projects at Lom Pangar and Memve’ele, the Kribi Deep Sea Port Project and the second bridge over River Wouri among others.

The Minister reiterated the importance of the projects to the infrastructural development of Cameroon, asserting that the Kribi Sea Port will be the gateway into the Central African sub-region.

Projects To Be Funded

The Government presented to investors and Cameroonians how the FCFA 150 billion to be raised will be spent.

The money would be used for 14 major projects that are currently under execution in different parts of the country; some of the projects are near completion.

FCFA 61.5 billion will be pumped into the water project in Yaounde. The issue of potable water in Yaounde has been a headache.

The Government is working hard to find a lasting solution to this problem.

Other projects that would benefit from the FCFA 150 billon package include: the electrification of 166 localities in the 10 Regions of Cameroon for FCFA 8 billion, the Lom Pangar hydroelectricity project would get FCFA 7.1 billion; FCFA 5 billion would be used for the Memve’ele hydroelectricity project, SONTREL’s project in the 10 Regions would use FCFA 5 billion.

The Yaounde-Nsimalen double-carriage way project would consume FCFA 9.1 billion, FCFA 5.3 billion has been allocated for the tarring of the Foumban-Manki road and the construction of a bridge over Mape.

FCFA 5 billon has been allocated for the tarring of the Bamenda-Batcho Akagbe-Ekok road, FCFA 5 billion for the Sangmelima-Mengong road, and construction of roads to des- enclave the production basin in the West Region will cost FCFA 8 billion.

FCFA 3.5 billion would be used to re-launch SEMRY in the Far North Region, construction work on the Douala-Yaounde double-carriage would cost FCFA 5 billion, construction work at the Kribi Deep Sea Port would gulp FCFA 16 billion and re-launching SODECOTON would cost FCFA 7.5 billion.

To the Minister of Finance, the aforementioned projects are within “the trend of emergence.” He assured investors that the Government of Cameroon would respect her commitment.

“All those who will subscribe to the bond issue would receive their interests and their loans will be reimbursed on time. The Cameroon Government respects its signature and honours its engagements. The Government pays its debts,” he stated.

The Minister assured all that Cameroon’s economy future is bright.

He said despite the difficult global economic situation in recent times, Cameron’s economy has shown remarkable resilience in the last few years.

“Cameroon has recorded a steady economic growth of six percent,” Ousmane said.

The launching ceremony was heavily attended by entrepreneurs of the private sector, and Minister Ousmane Mey who understands the private sector said it was no coincidence that the Government decided to launch the operation in Douala.

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