Deposits & Consignment Fund: IMF gives new directives to ease transfer of idle funds.

The directives were discussed with its delegation that engaged authorities in Yaounde in the month of May 2024.

The stakeholder discussions were part of the IMF review mission of the sixth Extended Credit Facility, ECF, and the Extended Fund Facility EFF, arrangements with Cameroon and the Resilience and Sustainability Facility, RSF.

A report release on its electronic library on July 22, highlights the contours of what the IMF delegation discussed, relating to CDEC while in Yaounde in May this year. 

The report No.24/237 indicated that the IMF asked authorities to “define the terms of reference of the Deposits and Consignment Fund, CDEC and submit to the Fund for review”.

While proposing a multi-stakeholder approach, the IMF, in its report, also indicated that: “CDEC should receive full supervisory recognition from the Central African Banking Commission, COBAC as a financial institution, without benefiting from specific exemptions due to state ownership”.

The IMF insisted in its report that the terms of reference should be “embedded in the implementing texts of the law regulating the activities of CDEC, to be adopted by the authorities”.

Discussions with gov’t authorities

Apparently banking on the commitment its team had gotten from authorities while in Yaounde, the IMF, in the same report, declared that “the authorities will speed up the signing of the other implementing texts of the law on deposits and consignments of CDEC. They will clearly define the terms of reference (ToR) of the CDEC and share the draft ToR with the IMF for review before.” 

IMF not against CDEC

Contrary to misleading newspaper reports, the IMF is not opposed to the existence and functioning of CDEC, nor challenge its role. The Fund recognises CDEC and is rather working with government on cautionary measures to ensure traceability and transparency in how such funds are handled. 

It is within this context that the IMF, in its report on Cameroon, singled out COBAC as a Sub-regional financial authority within the Central African Economic and Monetary Community, CEMAC, to be brought on board.

Situating COBAC’s statement on CDEC

Despite the serenity with which government and IMF are already handling grey areas relating to the surrender of idle funds, some ill-intentioned persons have brought in confusion. 

They are banking on a July 11, 2024, letter from the Secretary General of COBAC, Marcel Odele, addressed to financial institutions in Cameroon.

While Odele had asked for a pause in the transfer of funds, pending some clarifications, others have rather been pushing the narrative that COBAC and the IMF have asked CDEC to stop operations. 

Odele had rather only evoked that within the CEMAC Subregion, where COBAC is the financial regulator, there is yet to be a law touching on the management of idle funds.

In addition, COBAC had, in line with what government and the IMF are already working on, also evoked the need for details on the management and handling of such funds to ensure there is no destablisation of the financial sector. 

IMF directives on CDEC not new

In an attempt to further sow seeds of discord, some have been sponsoring the narratives that the directives of the IMF are new and are against CDEC.

In reality, the observations had long been given and the government, we gathered, long began working on developing the Terms of Reference, ToR, on CDEC and other needed text(s) to ensure its functioning aligns with best standards and guarantee funds are properly preserved. 

Vested interest groups, stubborn banks scheming to hide billions 

Despite the clarity in communication and engagement among the IMF, Cameroonian authorities, CDEC and COBAC, those who tried in the last quarter of 2023 to block the signing CDEC’s text of application, have gone back to work.

They had tried to stop the coming into force of the vital text of application for CDEC, which the no-nonsense Prime Minister, Head of Government, Chief Dr Joseph Dion Ngute, signed on December 1, 2023. 

Today, the cabal has returned to sow discord and confusion within the public space. They are rather sponsoring reports that the IMF and COBAC are against the role the Head of State handed to CDEC. 

Like it was with the text of application the PM signed last year, The Guardian Post has it on good authority that financial institutions holding hundreds of billions of idle funds are behind the misleading narratives to create confusion in the public space.

The financial houses, authoritative sources hold, are working with people within government to throw banana peelings on the path of CDEC. 

They are said to be seeking to paint CDEC as an institution that is illegal and not supposed to be in existence. 

Those who master such tricks say the interest of such people and financial institutions is to pocket the billions of idle funds for personal use. 

Financial analysts are already saying those behind such narratives want to kill the trust of the public and stakeholders in the lofty missions of CDEC.

The Guardian Post has it on good authority that most banks, including the Bank of Central African States, BEAC, have already surrendered the idle funds in their keeping to CDEC. BEAC, it should be said, was the first bank to surrender idle funds to CDEC.

Only three banks (names withheld), The Guardian Post has further gathered, are dragging their feet on surrendering the hundreds of billions of idle funds in their keeping, to CDEC.

These three banks are suspected of being behind the misleading media reports, to the effect that both COBAC and the IMF have ordered CDEC to stop the collection of idle funds from banks and other financial institutions. 

This story was first published in The Guardian Post issue N0:3179 of Thursday July 25, 2024