Financing the SND-30: a Chinese investment fund wants to lend more than CFAF 18,000 billion to Cameroon

(Business in Cameroon) – Cameroon may have just landed a partner of choice to finance the implementation of projects included in the National Development Strategy 2020-2030 (SND-30). On May 29, the Minister of the Economy (Minepat) signed a memorandum of understanding (MoU) on behalf of Cameroon with Zhu Chunyu, CEO of Silik Road Investment Fund (SRIF), a Chinese government-controlled investment fund established in 2014. The agreement covers the provision to Cameroon of a total envelope of 30 billion dollars, or 18,330 billion CFA francs, to finance development projects included in the SND-30.

In the May 30 edition of Cameroon Tribune, Minepat stated that Chinese financing would be directed towards “high-potential projects in both the public and private sectors.” He also pointed out that the MoU was only one stage leading to actual disbursements. According to the state-owned media outlet, the agreement above laid down the general conditions under which the planned partnership will be implemented. General and specific contracts will still be signed when the selected projects are implemented.

Strong exposure to China

“Clear indications have been given by the Prime Minister, Head of Government, on the expectations and strategic orientations contained in the SND-30, and the Chinese side, in exchanges with the Cameroonian government, will position itself in projects with a profitability likely to attract them”, declared the member of the government.

The availability of this substantial funding, which represents three times the Cameroon 2023 budget, should enable Cameroon to accelerate the implementation of this strategy, whose overall financing is estimated at 88,000 billion FCFA. However, its materialization will further strengthen Cameroon’s (central government) exposure to China. As of March 31, 2023, Chinese debt represented 64.5% of Cameroon’s bilateral debt and 26.2% of its external debt, i.e., 2106.7 billion FCFA.

Given the difficulties encountered in meeting its commitments to the Middle Kingdom, in July 2019, the country benefited from a restructuring of its debt owed to Eximbank. According to the Cameroonian Ministry of the Economy, the Chinese state-owned import-export bank had agreed to reschedule 70% of the sum (excluding interest) that Cameroon would have to repay from July 2019 to March 2022. This money, which concerns 22 projects in its portfolio in the country, is estimated at around 150 billion FCFA.

Cédrick Jiongo