BEAC pushes for rehabilitation of SONARA.

As the power house of the sub region, the Governor of BEAC, Yvon Sana Bangui, told reporters after the second ordinary session of the Monetary Policy Committee, MPC, of BEAC, that Cameroon contributes between 70 to 80 percent of total CEMAC foreign reserves. 

He lamented that since the breakdown of SONARA, which has prompted Cameroon to be importing all petroleum product derivatives, the contribution is no longer forth coming.

Even more, and since then, he said, not only Cameroon but other CEMAC member states are importing more of these petroleum derivatives.

The Central Bank Governor asserted that SONARA must be rebuilt as soon as possible, if CEMAC foreign reserves must be protected and permitted to keep growing to support imports.

"Cameroon must restore SONARA very quickly. Since a fire destroyed the refinery in May 2019, Cameroon has been importing all its finished petroleum products, including gasoline, diesel, kerosene, and some domestic gas. This has weakened CEMAC´s foreign exchange reserves,” Sana Bangui told reporters. 

He further observed that “all countries in the sub-region import finished petroleum products. This weakens our external position".

The Governor also delved into some intricacies related to financial agreements signed by these countries with their former colonial master, France. 

“Under monetary agreements with France, 50% of these reserves are typically repatriated to BEAC, while the other 50% are held in an operational account with the French Treasury. This pooled resource allows CEMAC member states to collectively cover their import bills. A country can import goods even if its bill exceeds its own reserves by using the reserves of other member states with surplus currency holdings,” the Central Bank Governor clarified.

He projected that CEMAC's reserves will reach 7,285 billion FCFA by the end of 2024, covering barely 4.79 months of imports; to which reserves Cameroon has been contributing 70-80%.

The massive importation of finished petroleum products by all CEMAC member countries, since the SONARA fire incident, he said, has eroded these shared reserves.

What is delaying rehabilitation of SONARA?

According to the BEAC top authority, rehabilitation work on SONARA was initially estimated to cost 250 billion FCFA. 

The Governor of BEAC quotes the Prime Minister, Head of Government, Dr Chief Joseph Dion Ngute, as promising that rehabilitation work was scheduled to start in 2022.

The BEAC boss then expressed dismay that this timeline has not been met. He still quoted the PM as making a similar promise to Parliamentarians during the November 2023 session. 

“PM Dion Ngute announced that Front End Engineering & Design, FEED studies would be conducted in 2024 to launch the rehabilitation project,” he recalled. 

On the other hand, BEAC had at one time alluded that the Minister of Water Resources and Energy, Gaston Eloundou Essomba, disclosed that two foreign companies, American Chemex Global LLC and French Performance Plus Innovation, had been recruited to conduct studies and provide project management assistance. 

"Following new instructions from the President, the responsibility for overseeing SONARA´s rehabilitation has been assigned to the company’s Director General. An action plan has been developed and submitted to the International Monetary Fund, IMF, and the engineering and project management firms have been selected," Minister Eloundou Essomba is quoted as having told Members of Parliament, MPs, in Parliament. This was said to be while he was defending budget of his ministry for 2024.

This story was first published in The Guardian Post issue No:3151 of Thursday June 27, 2024