IMF misleads Cameroon to electricity blackout!.

The bait in the privatisation of public enterprises was that the government was a "bad business manager" and that privatisation was a guarantee for quality, affordable and available services.

Swallowing the bait, hook, line and sinker, the Cameroon government reluctantly, sold 56% of the Société National d'Electricité, SONEL, to the US-based firm, AES Corporation, in 2001, which was the only bidder in the public tender.

The majority shareholder changed the name to AES-SONEL, which dimmed the expectations of Cameroonians with constant blackouts, load shedding and low current.

The International Labour Organisation, ILO, in a 2013 study, underlined that power outages and load shedding created significant costs and constraints on Cameroonian companies.

Another assessment in 2019 concluded that "Cameroonian electricity consumers have faced more load shedding and power cuts since privatisation. The proximate cause is the high dependency on hydropower (about 71% of total production in 2010), and consequently the vulnerability to climatic hazards. However, the ultimate cause pointed out is that investments have not kept pace with demand growth".

Another report by the French Development Agency, FDA, even estimated that electricity shortages after privatisation had "reduced economic growth by 1%... AES-SONEL made the choice not to operate their diesel thermal power plants during the outages, as the operating costs of these units exceeded the selling prices".

The Americans finally threw in the towel and on September 12, 2014, the British, through Energy of Cameroon, ENEO, took over with a promise to "do more for its customers. This rebranding is part of an overall plan that aims to create more values for the company. In particular, improving customer services, relationships with the communities we serve, as well as the development of ENEO staff," it promised.

It advertised that "…the historic electricity production, transport and distribution company in Cameroon is thus beginning a new life, based on an ambitious project and strong values such as proximity, simplicity, solidarity, modernity and listening. This first step will soon be followed by other innovations in terms of products and services intended to make life easier for our customers".

It has been a pipe dream with ENEO holding the government responsible for poor service delivery because of unpaid debts.

But this week, the government, through the Director of Treasury at the Ministry of Finance, Samuel Tela, told reporters in Yaounde that between 2021 and 2023, the government paid over 300 billion FCFA to ENEO, as part of government’s social responsibility and other interventions to avoid blackouts. 

He disclosed that out of an established bill of 282,500,405,809, government paid 299, 857,441,243.

Tella said the excess of over 16,357, 035, 434 billion FCFA corresponds to different expenditure heads which are already being validated by competent structures. 

The figures presented to reporters, the Director of Treasury at MINFI said, were reached after a thorough cross-checking. The evaluation, he said, was done by a team from the Ministry of Finance, Ministry of Water and Energy Resources and representatives of ENEO.

The signatures, he explained, confirmed payments made by the State to ENEO, for the period January 2021 to December 20, 2023, to cover public consumption, subsidy for electricity tariff, public lighting, Value Added Tax, VAT, and reimbursable works.

When blackouts hit the nation in the month of December 2023, following the shutting of gas-powered plants viz of the Kribi Development Power Company, KDPC, and the Dimbamba Development Power Company, DPDC, government again came to the rescue of ENEO, he added.

The Director of Treasury at MINFI further explained that as at December 15, 2023, the Treasury paid 30 billion FCFA to ENEO. The debt ENEO owed GLO-BELEQ, which runs the two plants as at that time was 106 billion FCFA. The 30 billion, the MINFI official said, was thanks to government’s resolve to monetise the debts of some state corporations. 

This stop-gap measure during the festive period, he said, raised the money from the State to ENEO to over 300 billion from December 1, 2021, to December 20, 2023.

The Guardian Post is delighted with government's exhaustive explanation to rescue a company it has 44 percent of the shares. 

Truth be told, Yaounde has not done enough in that its bills are not being paid as and when due.

Nonetheless, the bottom-line in the electricity sector is that privatisation has only created more blackouts, more load shedding and more low current that in some parts of the country electricity cannot turn on a computer.

So, has the privatisation of the service decreed by the IMF not been disastrous? 

A report published by Halifax Initiative and Social Justice Committee in Canada, argue that the World Bank and the IMF are “forcing [governments] to attempt large-scale privatisation regardless of their capacity to ensure that this is in the best interests of the people they serve. As a result, privatisation often leads to the loss of jobs. It often results in lower quality service to the poor and in higher costs for communities at large in impoverished countries”.

Isn't that what Cameroon is experiencing in the electricity sector? The solution several other research projects have indicated is for government to generate electricity from its various dams and allow private enterprises and municipal councils to sell it so that through competition, including the use of solar and wind energy, supply of electricity without the blame game between ENEO and the government triggered by the IMF privatisation that remains a fiasco.