In a letter addressed to the Tax Managing Director, Modeste Mopa, the Finance Minister, Louis Paul Motazé, ordered the suspension of the “tax adjustment measures undertaken” on life insurance companies. This means the minister is calling the tax administration to suspend all retaliatory measures initiated against insurers who have not complied with the new provision of the 2019 Finance Act, introducing VAT (19.25%) on life insurance products.
“Insofar as an inappropriate enforcement of the tax law could have irreversible consequences touching the survival of the insurance companies concerned, I invite you to postpone the execution of the tax adjustment measures initiated on these companies, pending the outcome of the consultation”.
On the other side, some administrative law experts are wondering whether a member of the government can suspend the application of a provision contained in the finance law passed by Parliament and promulgated by the Head of State. But this is not the first time that the provisions of a finance law have been readjusted by the Ministry of Finance. An example is the tax amnesty granted in 2016 and 2017 to taxpayers subject to the payment of property tax, whereas the payment of this tax was prescribed in the Finance Act.
Cocoa Price Drops
After a price stagnation above XAF1,000 per kilogram for two months, then a rise to XAF1,200 during the second week of May 2019, the price of a kilogram of cocoa beans is back on the downward trend.
According to data compiled by the Sector Information System (SIF), price fell to a maximum of XAF1, 080 on 21 May, with a minimum of XAF1, 030; a decline by XAF20 compared to the range of XAF1, 050 to XAF1, 100 last week.
Producers now fear that this decline will be worse in the coming weeks due to persistent rains, which make it difficult to access the main production areas.
Cameroon Produces 693,830 M3 Of Natural Gas
Cameroon national hydrocarbons corporation (SNH) informs the country produced a total of 693,830.42 m3 of Liquefied Natural Gas (LNG) during the first quarter this year.
According to the company, good production was made possible thanks to the Floating Liquefied Natural Gas-FLNG plant in commercial operation at Bipaga, off Kribi. So far, 100% of Cameroon’s LNG output is shipped to Asia (China and Taiwan). The continent alone accounts for 73% of the global LNG market. And, SNH says, its demand should continue to grow due to economic and demographic growth as well as the shift from coal to gas for electricity production.
Cameroon started exporting LNG since 2018 with the introduction of FLNG. This floating plant has an annual production capacity of 1.2 million tons per year, 30,000 tons of domestic gas per year and 5,000 barrels of condensate per day. Through this project, Cameroon joins Algeria, Nigeria, Angola, Equatorial Guinea and Egypt as African LNG exporters.
GDP Rises By 4.5%
Over the last three months of 2018, Cameroon’s GDP grew by 4.5%, the national statistics institute (INS) announced. Major growth driver, INS says, remained the tertiary sector which contributed 2.0 points to GDP growth, despite a slowdown, with a year-on-year rate of 3.6% after 5.1% the same period in 2017.
Services sector generated XAF2,278.8 billion over the period, while the secondary sector generated XAF1,030.2 billion and the primary sector XAF577.7 billion. According to the public institute, trade, financial services and transport activities contributed the most to the good performance by the tertiary sector.
Sales and repair activities contributed 0.9 points to growth, driven by strong demand during year-end holidays. Financial activities contributed 0.3 points, spurred by the increase in lending to the economy, particularly to the private sector. Transport, warehousing and communication activities also performed well, contributing 0.2 points to GDP growth.
However, INS points out, other tertiary sector activities slowed over the period reviewed. These include information and telecommunications (2.7% in Q4 2018 compared with 4.2% in Q3 2018), accommodation and food services (almost stable at 3.7% in Q4), non-market general government services (3.4% in Q4 against 5.1% in Q3).
Gov’t Seeks FCFA10 Bn In Fungible Treasury Bonds
Government treasury through a tender, recently issue XAF10 billion worth of fungible treasury bonds (OTAs) maturing on May 24, 2022 (3 years).
According to a Beac statement, bidding will be submitted with CEMAC banks and financial institutions approved as “Primary Dealers” (SVTs) by Finance Minister.
The seventeen approved SVTs include International Bank of Cameroon for Savings and Credit (BICEC), International Bank of Gabon for Trade and Industry (BICIG), BGFIBANK Gabon, Crédit du Congo, Ecobank Cameroon, Ecobank Central Africa, Société Commerciale de Banque (SCB) Cameroun, Société Générale (SG) Cameroon, Standard Chartered Bank Cameroon (SCBC), Union Bank of Cameroon Limited (UBC), etc.
This fundraising operation is a challenge for the state, which often issues 26-week treasury bills (BTAs). These short-term debt securities, along with those with a 13-week maturity, are the most sought after on the market, compared to OTAs, medium- and long-term securities that are not very popular with investors.
Barry Callebaut To Strengthen Investments
Barry Callebaut, a leading cocoa grinder, is planning to strengthen investments in Cameroon to ramp up cocoa production. In that regard, CEO Antoine de Saint-Affrique, who owns Barry’s local subsidiary -Cameroon Cocoa Industrial Corporation (Sic Cacaos) – met with President Paul Biya and the Economy Minister, Alamine Ousmane Mey, recently.
“Sic Cacaos has being processing cocoa in Cameroon for 70 years now. With the authorities, we discussed how we can improve both the quality and the volume so that the processing activity continues to flourish and better contribute to Cameroon’s development,” says Antoine de Saint-Affrique.
According to the economy minister, the collaboration with Barry intends to add value to the sector and enable the country to improve its trade balance by offering quality products at a price that meets the expectations of farmers. Sic Cacaos ground nearly 53,000 tons of cocoa during the 2017-2018 seasons, according to latest data.
Glass Company Records Net Profit Of F97.2M
Cameroon Glass Company (Socaver), subsidiary of brewer Sabc, announces it ended FY2018 with a net profit of XAF97.294 million.
The company indicates that production with furnaces No. 1 (which operated until 7 May 2018) and No. 2, reached 36,700 tons of glass against 34,000 tons budgeted and 49,800 tons produced in 2017. This volume was achieved with an average cullet rate (cullet is waste glass used in glass-making) of 72.71% and a yield of 90.95%.
It also reported a production of 538,000 glass crates compared with a forecast of 1,273,000. In 2017, production was 1,842,000 crates. “This segment in 2018 was particularly impacted by exports, which fell by 82% (-460,000 units) compared to 2017,” says the SABC subsidiary.
Socaver is the only glass factory in Central Africa. It exports its products to Chad, the Central African Republic, Gabon, Equatorial Guinea and Congo Brazzaville.