2024-07-15 07:53:41
A financial storm is threatening to hit Cameroon. The Central African Banking Commission (COBAC) has just put an abrupt halt to the process of transferring unclaimed funds to the Caisse des Dépôts et Consignations (CDEC) of Cameroon. This unexpected decision sheds a harsh light on the tensions simmering in Cameroon’s financial sector and could well be the spark that sets the entire system ablaze.
A multi-billion dollar showdown
At the heart of this explosive affair lies a colossal stake: nearly 1,500 billion FCFA of dormant assets in Cameroonian banks. A jackpot that the government, through the CDEC, is seeking to recover to finance its development projects. But that was without taking into account the fierce resistance of banking establishments and the surprise intervention of COBAC.
COBAC, policeman or gravedigger of the financial system?
In a letter dated July 11, 2024, Marcel Ondele, Secretary General of COBAC, orders the CDEC to “to suspend the process of transferring unclaimed assets”. A decision that falls like a guillotine, even though some financial institutions had already started to transfer funds. COBAC invokes the absence of a regulatory framework governing these transfers at the CEMAC level, highlighting the risks for the financial stability of the region.
The CDEC, a giant with feet of clay?
Created in 2008 but truly operational since 2023, the CDEC finds itself today in a delicate position. Its general director, Richard Evina Obam, who recently threatened to carry out a ” forced recovery ” funds, is now forced to temporize. This situation highlights the flaws of an institution which, despite its strategic importance, is struggling to establish itself in the Cameroonian financial landscape.
Banks, between resistance and fear of collapse
The Professional Association of Credit Institutions of Cameroon (APECCAM) does not hide its concern. Jean Paul Missi, Director General of Crédit Foncier du Cameroun and Vice-President of APECCAM, warns against the risks of a collapse of the banking system if the transfers were to be made abruptly. The banks are calling for a review of the deadlines and a clarification of the transfer terms.
A legal imbroglio with potentially devastating consequences
The COBAC decision highlights a legal vacuum at the regional level. While Cameroon had put in place a legal framework with the decree of December 1, 2023 setting out the terms for transferring funds, the lack of harmonization at the CEMAC level creates an explosive situation. This legal uncertainty could well paralyze the entire Cameroonian financial sector in the months to come.
Cameroon’s financial stability at stake
Beyond the technical aspects, the entire financial stability of Cameroon is at stake. If the 1,500 billion FCFA of dormant assets were to be abruptly moved, the consequences on the liquidity of the banks could be catastrophic. By slowing down the process, is COBAC seeking to avoid a collapse of the system or to protect the interests of the banks?
A full-scale test for Cameroon’s economic sovereignty
This crisis raises the crucial question of Cameroon’s economic sovereignty. Faced with a regional institution like COBAC, will the Cameroonian government be able to assert its national interests? Managing this crisis will be a real-life test of the country’s ability to take charge of its economic destiny.
Implications beyond Cameroonian borders
The outcome of this standoff will have repercussions far beyond Cameroon’s borders. Other CEMAC countries are watching the situation closely, aware that the final decision could set a precedent for the entire region. Harmonization of regulations at the community level now seems inevitable.
The CDEC, victim of its ambition?
The current impasse may reveal the limits of the proactive approach adopted by the CDEC. By wanting to move too quickly, has the institution neglected certain crucial regulatory aspects? This crisis could be an opportunity to review its operations and objectives.
A risk of cascading legal disputes
The COBAC decision opens the door to potential legal disputes. Institutions that have already made transfers, such as the BEAC or Crédit Foncier du Cameroun, find themselves in an ambiguous situation. Legal battles could well break out in the coming months, further adding to the complexity of the situation.
The thorny issue of the traceability of funds
At the heart of COBAC’s concerns is the question of the traceability of funds. How can we ensure that unclaimed assets will be correctly identified, managed and potentially returned to their beneficiaries? This technical problem hides major ethical and political issues.
The need for a concerted approach
Given the scale of the crisis, a concerted approach between all stakeholders seems inevitable. Government, CDEC, banks, COBAC and regional institutions will have to find common ground to break the current impasse. This crisis could be an opportunity to thoroughly rethink the management of dormant assets throughout the CEMAC zone.
The consequences on the economic attractiveness of Cameroon
This situation of uncertainty risks weighing heavily on Cameroon’s economic attractiveness. Foreign investors, already cautious in a tense global economic context, could be tempted to turn away from a country where the regulatory framework seems so unstable.
A test for the country’s economic governance
Managing this crisis will be a real test for Cameroon’s economic governance. Will the government be able to find a balance between its development ambitions and the need to preserve the stability of the financial system? The answer to this question will shape Cameroon’s economic policy for years to come.
The need for transparent communication
In this tense context, communication between the various stakeholders will be crucial. The government, CDEC and financial institutions will have to demonstrate transparency to reassure savers and avoid any panic movement that could have devastating consequences on the entire Cameroonian financial system.
Towards a redefinition of the role of the CDEC?
This crisis could well be an opportunity for a profound redefinition of the role and missions of the CDEC. Created to be a development tool at the service of the State, the institution may have to revise its ambitions downwards or, on the contrary, be given new powers to carry out its mission.
The shadow of regional geopolitics
Behind the technical and legal aspects, one cannot ignore the geopolitical dimension of this affair. The sometimes tense relations between Cameroon and some of its neighbors within CEMAC could well influence the outcome of this crisis. Could COBAC’s decision be interpreted as a maneuver aimed at weakening Cameroon’s economic autonomy?
A call for the modernization of the Cameroonian financial system
Beyond the immediate management of the crisis, this case highlights the need for a thorough modernization of the Cameroonian financial system. Digitalization of services, improvement of the traceability of funds, strengthening of regulation: so many projects that can no longer be postponed.
Civil society, the great absentee from the debate?
In all this affair, one can be surprised by the relative discretion of Cameroonian civil society. However, the stakes are considerable for the entire population. Greater involvement of citizens and non-governmental organizations in the debate could bring new light and innovative solutions to this crisis.
COBAC’s decision to block the transfer of unclaimed funds to the CDEC is plunging Cameroon into a financial crisis with multiple ramifications. Beyond the technical and legal aspects, the country’s entire economic future is at stake. Between financial stability and development ambitions, the Cameroonian government will have to demonstrate great skill to get out of this impasse without compromising the country’s vital interests.
The outcome of this crisis will shape the Cameroonian financial landscape for years to come. It could well mark a turning point in relations between Cameroon and regional financial institutions, and even redefine the balance of economic power in Central Africa.
One thing is certain: Cameroon is at a crossroads. The decisions taken in the coming weeks and months will have lasting repercussions on the country’s economy and the well-being of its people. It is crucial that all stakeholders demonstrate wisdom and long-term vision to transform this crisis into an opportunity to modernize and strengthen Cameroon’s financial system.