The bond issue launched for the first time in Cameroon is an indebtedness instrument in the medium and long term that aims to mobilise domestic and sub-regional savings in view of funding developmental projects earmarked in the State budget under the 2010 Finance Law. It is called \”ECMR 5.60% net 2010-2015\”.

This tool for the financing of the national economy results from a set of sequences and other changes taking place in our country and the sub-region, notably the progressive phasing out of statutory advances by BEAC, to enable CEMAC States cope with insufficient own revenues to support budgetary expenditure.

CEMAC States have opted to progressively abandon this type of financing that provided the grant of loans of which the maximum amounts were up to 20% of the total budgetary revenue for the previous year.

Many criticisms have been levelled at this facility which has an inflationary character, slows down the take off of money and capital markets and do not allow the public Treasury to develop a projected, prudential and active management of the cash flow of the State.

With the advent of the public debt market, resorting to this new mode of funding can boost the execution of the priority expenses of the States, but equally help to drain the excess liquidity held by credit institutions towards the real economy through the monetary and capital markets.

The bond issue is a tool that the State will use much more often than in the past to finance identified developmental projects, alongside other tools such as funding by customs and tax revenue.

Funds raised will be directed towards the realisation of the 14 investment projects below for which Cameroon\’s share is estimated at a little over CFA 200 billion francs. These are:

  1. water and energy infrastructure (access roads to the Memve\’ele dam 12 billion, the Lom Pangar dam 72 billion of which 40 billion is meant for the realignment of the Chad-Cameroon pipeline, the Kribi gas plant 07 billion, the Douala Water supply project 09 billion);
  2. ports infrastructure (the Kribi deep-sea port 21 billion);
  3. Mining Projects (the Lomi├® cobalt and nickel projects 30 billion);
  4. Road Infrastructure and bridges (the Ayos Bonis Highway 10 billion, the Ring Road 12 billion, second bridge over the Wouri 11 billion, acquisition of civil engineering materials 02 billion);
  5. Telecommunication projects (construction of 3 200 km of optical fibre 05 billion);
  6. large agricultural projects (improvement of rice and maize production through agricultural mechanisation CFA02 billion F, production chains CFA10 billion F).

By resorting to this instrument, Cameroon has many assets which now place the management of public finance in a market perspective notably:

  • the credit which it enjoys and the quality of its signature;
  • the sustainable level of its public debt, with an indebtedness rate below 15% of the GDP;
  • an average growth rate of real Gross Domestic Product of 2% over the last five years;
  • an inflation rate under control, about 1.5% in 2010.

Looking at these strengths which Cameroon relies on to convince the subscribers, the current bond issue has the following characteristics:

  • The transaction is special both by the amount never equalled in our sub-region and by the facilities and security;
  • The designation \”ECMR 5.60% net 2010-2015\”;
  • The amount of the bond issue of CFA 200 billion francs;
  • The nominal value is CFA10 000 F;
  • The subscription price is CFA 10 000 francs per bond;
  • The maturity is 05 years (2010-2015);
  • The nominal interest rate is 5.60% net per annum;
  • The subscription period runs from the 6th to 15th December 2010;
  • The annual coupon payment is after the first anniversary of the effective date;
  • Repayment of the principal will be made on an annual basis, after a year of delay, from the year 2012 by the constant redemption of ┬╝ of the capital on each anniversary of the effective date;
  • A special account opened at BEAC will be furnished regularly for repayments at the end of the various maturities;
  • the \”ECMR 5.60% net 2010-2015\” bonds will be listed at the DSX within a maximum period of two months after closing of subscription;
  • The interest on these bonds are exempt from taxes;
  • the securities issued will be dematerialised, that is to say it will not result in the creation of a paper support. They will be registered with the PSI approved by the CMF and negotiable at the DSX;
  • Natural persons and corporate entities resident and non-resident of CEMAC can subscribe to these securities.

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