Editorial: Refurbishing SONARA; On attend, on attend...five years on!.

The comic fable could be likened to the case of SONARA, the country's flagship economic investment. 

On May 31, 2019, fire ravaged four of its 13 production units and partially destroyed four others.

For the past five years after that disastrous incident, the government has been making promises to refurbish it each year. All have ended up a dead letter just like the tale of an expected birth that never came.

After the disaster, the Minister of Water and Energy, Gaston Eloundou Essomba, said: “The first evaluations of the firms which were interested in this file put the cost of the rehabilitation at around 250 billion FCFA. Negotiations are already underway with technical and financial partners who have expressed interest in the rehabilitation of this refinery. However, the finalisation of these negotiations depends on the restructuring of SONARA's significant debts. The government is hard at work to complete this restructuring operation and allow a gradual amortisation of this debt to begin”.

On another occasion, the minister said an investment of 700 billion FCFA for the reconstruction of the plant and the continuation of work to extend and modernise the facilities would be required as years go by and inflation spiked in cost.

As this daily reported yesterday, the Governor of the Bank of Central African States, BEAC, Yvon Sana Bangui, has also expressed concerns about government's unkept promises to get the refinery fully operational.

Speaking to reporters after the Second Ordinary Session of the Monetary Policy Committee, MPC, of BEAC, he cited the Prime Minister, Head of Government, as promising that rehabilitation work was scheduled to start in 2022.

The BEAC boss then expressed dismay that the timeline has not been met. He still quoted the PM as making a similar promise to lawmakers, 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 said. 

BEAC had at one time also cited Minister Eloundou Essomba, as disclosing 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. This was said to be while he was defending the budget of his ministry for 2024.

For the past five years of waiting, the rehabilitation cost keeps skyrocketing to catch up with inflation and the vagaries of world trade.

SONARA’s debts surprisingly keep soaring. 

According to the Autonomous Sinking Fund, CAA, as of October last year, SONARA owed an outstanding amount of FCFA 425.5 billion from its foreign suppliers, representing 83.2% of the total debt. 

Compared with the previous month when the company’s outstanding external debt was FCFA 418.6 billion, this marked an increase of FCFA 6.9 billion.

The unfulfilled promises and mounting debt did not escape the worries of the IMF, as it diagnosed the financial health of SONARA during the fifth review of the Extended Credit Facility with Cameroon last October and expressed worries about the development.

The situation of SONARA is an economic mystery hard to decipher. Some credible media reports quoting the Board Chair of the company, Madam Ndoh Bertha, said the company made a positive net result of 78.9 billion FCFA in 2021.

But in 2019 and 2020, SONARA had recorded losses of 107.3 billion FCFA and 10 billion FCFA respectively, according to data from the Technical Rehabilitation Commission (CTR) of public and para-public enterprises. 

The company did not explain this incredible jump in performance. 

If it can make that huge profit in one year without rehabilitation, how does it accrue such whooping debts?

Why has SONARA not been refurbished since the fire that ravaged some of its facilities, some five long ago with promises of doing so every year? 

Why should such a huge government investment, which in other countries make windfall profits, be the largest debtor of all state enterprises in Cameroon with 425.5 billion FCFA owed to crude oil and finished petroleum product traders and suppliers as at the last count?

President Biya explained in his last New Year's speech that: "Ultimately, the rehabilitation of SONARA, which must be expedited as I have instructed, should help to improve the situation in this sector".

The nation and CEMAC are waiting, waiting and waiting for with urgency for “tres hautes instructions” to be respected. 

This story was first published in The Guardian Post issue No:3152 of Friday June 28, 2024