Deposit & Consignment Fund: PM outlines modalities for transfer of funds in text of application.

The text outlines terms for the transfer of funds and securities vested in CDEC. The text of application, which had become a tug of war within the corridors of power in Yaounde, is an important ingredient in greasing the functioning of CDEC.

Article II of Decree No.2023/08500/MP, of 01 December 2023, of the Prime Minister, Head of Government, Chief Dr Joseph Dion Ngute, gives a six-month period for all physical and moral persons to comply.

In Article I, the same text states that money and other securities in the keeping of public administration, public or private enterprises, judiciary officers and other legal entities, must be surrendered to CDEC. 

Given the six-month duration for financial institutions and others to comply, it means latest May 31, 2024, all idle funds are supposed to have been relinquished to CDEC.

Empowered to control, recover

Chapter III Article 7 (1) of the decree empowers CDEC to carry out external audits or on-site and off-site missions to verify the amount of funds or securities being held by an entity after the six-month deadline.  This, the same document detailed, is to “ensure the sincerity of the deposits”.

Conditions for the transfer of such funds to CDEC, the text also indicated, will be subject to an agreement with the depository institution.

CDEC not carting resources away

To note that CDEC will create accounts with concerned institutions which will only require debiting and crediting. 

This, officials say, is to ensure unclaimed funds are put in special accounts and not taken away. Transfers are expected to be made once unclaimed funds are summed up with vivid details.

The coming into force of the text of application had experience several hiccups. 

At one point, the General Manager of the Deposit and Consignment Fund, is said to have informed the World Bank of how hard things were becoming for the institution to run on all cylinders.

Avoiding excessive liquidity outflow

The notion of debiting and creating special CDEC accounts in respective financial institutions, has a double guarantee effect. 

First, sources say, it is meant to avoid a situation where banks could trigger the excessive inflow of liquidity into the economy that could spark other consequences.

For one thing, the World Bank is said to have been among key actors that pushed CDEC to go fully operational to guarantee proper management of finances.

CDEC, under the covering of the State, is also functioning as double guarantor for idle funds and serves the purpose of mobilising vital funds for national development.

President Paul Biya created CDEC in March 2008. Its pioneer management was appointed on January 20 this year. Since then, the institution has been working to make its importance felt across the board.

One of its major achievements was the October 31, 2023, deal with the Cameroonian subsidiary of the German insurance giant, Allianz Cameroun, for the transfer of 1.5 billion FCFA idle funds.

The money, officials had said, was from 3,523 accounts being payments on life insurance that had not been claimed after the death of insured persons.

See full text of the text of application and related documents from the Minister of Finance, on pages 6-10.