CAMEROON
World Bank and Local Dictatorship Hold Up Economic Development
05/25/2003 - In the Littoral and Western provinces of Cameroon (one third the country area)
businesses and families are subjected to unprecedented power cuts. These last several days the
cumulated length of power cuts is on average four days over five, a business woman told TAI.
?How can a poor country get developed this way? Douala, the heart of Cameroon?s economy is now
the town where stoppages in the rare factories and stores are the new way of life, where you have to
wait days to send or receive an e-mail, where kids prepare their exams using candlelight. People now
understand that the policies of public companies? privatization the World Bank had imposed are just
digging our graves. Coupled with the other nightmares of water cuts and shortages of oil products, gas
and basic consumer products, how can you make a single Cameroonian believe that the Biya regime and
their accomplices at the World Bank, IMF and America are seeking the development of this country??
Emily Ngo Nguimbus thundered forth asking us to leave her alone.
AES-Sonel, the country?s power providing company is 56% owned by the UK-based AES-Sirocco, a
subsidiary of the American AES Corporation (NYSE ticker AES). AES-Sirocco bought the former
state-owned Sonel (National Electricity Company) along with its nation wide heavy installations and its
400,000-subscriber business in July 2001 at a price of about $7.5 million.
The transaction was an execution of the World Bank?s requirement to privatize all state-owned
companies. Cameroon's government holds the remaining 44%, part of which is supposed to be sold off
to private buyers.
An AES press release titled ?Success Story? mentions that AES-Sirocco launched an approximately
$200 million project representing AES' first major foray into the Cameroonian market and is supposed
to help position the company for entrance into other regional markets such as the Central African
Republic, the Democratic Republic of Congo and the Republic of Congo.
?Under the contract signed with Cameroon's government, Sirocco will produce, transport and distribute
electricity for a period of 20 years. The contract obliges Sirocco to increase the number of the country's
subscribers from its current level of 400,000 to 136 million [?] The firm (former Sonel) has a reputation
for inefficiency, frequent power cuts and corrupt practices by workers. It is common for Cameroon's
cities to remain for more than three months without electricity,? wrote Dow Jones Newswires on July
24, 2001.
Reading today all what the project supporters were able to say at that time to further convince
Washington is just amazing. Cameroon is a country of 16 million inhabitants. How can Cameroon ever
generate 136 million power?s end-users? Furthermore, there is no knowledge of any power cut having
ever lasted months in any Cameroonian city.
However, based on this type of information, extensive advocacy from former Deputy Secretary of
Commerce Robert Mallet and the U.S. Embassy in Yaounde helped ensure AES' success in the face of
(supposedly) foreign competition. "The assistance provided by the Commerce Department and the
Embassy was very important to the successful conclusion of our negotiations. We would not hesitate to
contact them again," said Mr. Francois Maze, Business Development Manager for AES-Sirocco on July
2001.
Francois Maze also promised a "slight increase" in tariffs over the coming three years that would
consider "the purchasing power of the people in Cameroon." Joseph Aoudou, the Cameroon?s minister
of Mines, Water and Energy further swore during a press conference on December 2002 that no
increase in power tariffs would occur before 2003 and at a rate of not more than 8% over 4 years.
However, without any publicity AES-Sonel imposed an increase in tariffs of more than 5% the same
month. Before that, in addition to planned lay offs of half of the 4,000 employees, the company imposed
several power cut schedules since early 2002 alleging installations? great age and low level of waters on
the power barrages. Actually the company is unable to abide by its own schedules and the situation is
evidently out of control.
During this very critical moment of energy crisis, President Paul Biya invited Mr. Callisto Madavo, the
vice president for the African region at the World Bank, for a 5-day feast starting May 20, the national
day.
During a press conference this day, the local weekly Herald Today quotes Mr. Madavo as saying that
the thermal power station in Limbe and the gas-to-power plant in Douala were of key importance and
better to the development of more hydro-electric power plants, despite the high potential [?] But a
hydro-electric plant started today can only start producing power after nine to ten years. ?We cannot
afford to wait that long,? he said.
To the main question ?What Is The Solution??, there is no clear answer except that Madavo also points
out that in developing and adopting energy production strategies the least cost options needed to be
taken.
Mohamadou Diope, the Cameroon?s representative for International Finance Corporation (IFC is a
member of the World Bank Group,) disclosed that besides financing the power plants projects in Limbe
and Douala, the IFC was providing funding for the capital investment of AES Sonel. The promise comes
after the IFC?s vice-president Assad Fabre, during his last visit to Cameroon, said they were working in
cooperation with AES-Sonel to abate the energy situation.
What about the $200 million investment project AES-Sirocco launched two years ago for the same
purpose?
The right answer is linked to two other questions. Mr. Francois Maze, Business Development Manager
for AES-Sirocco, isn?t he an MBA graduate from a US business school and didn?t he run simple
breakeven and mandatory market analyses before approval of his Sonel acquisition project by AES
Corporation? Why does the World Bank choose additional loans (most likely to end up being
overloaded upon the Cameroon?s State and paid out by the Cameroonian people) as the best solution?
Actually the Cameroon?s energy crisis is just welcome by the World Bank and the Biya regime. The
more loans the World Bank builds over the country, the longer the World Bank will receive half of
Cameroon?s annual GDP to cover its debt service, and the longer the Biya regime will control loan
execution contracts and distribute them to Biya?s inner circle individuals and businesses.
That is the way the international loans' Maffia works since more than 20 years the World Bank is at
Cameroon?s and other countries? bedside.
The organized stripping of Cameroon is noticeable when Mr. Callisto Madavo shows himself as more
eager to publicize the other World Bank?s project for the privatization of the National Water Company
(Snec, also doomed to fail) than finding actual solutions to current energy crisis. Mr. Madavo would
never admit that the AES-Sonel project is a flagrant failure that will deeply compromise Cameroon?s
laborious economic development for the coming several years.
Of several World Bank active projects in Cameroon, observers point out the Yaounde-Douala road
project (linking the political capital to the economic capital) and the Port Facilities Development project
as two other greatest failures of the relationship between the World Bank and the Cameroon?s
government.
The Yaounde-Douala is the most deadly road of the country because of its very dense traffic for a
two-lane, multiple-bend and sign-less road. Neither the World Bank nor the Biya regime has ever
decided to fund the 20-year old planned construction of a second way to complete the first of several
highways the dynamic country needs for its economic development.
The World Bank is opposed to the project of construction of a new port in deep sea waters (assessed
at 100 billion CFA or about $172 million 15 years ago,) preferring to issue loans of 22 billion CFA or
about $38 million annually for the dredging of the Douala lagoon port?s muddy bottom, which allows the
World Bank to overburden the country with excessive levels of debt while their accomplices holding
power benefit endless contracts they use to build up individual fortunes and a stronger dictatorship.
Sam Meko
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©2003 The African Independent, Inc. All rights to republication are reserved
