Business

On 18 August, while hosting members of the new executive bureau of the Employers’ Group of Cameroon (Groupement Patronal du Cameroun - Gicam), the most important employers organisation in the country, the Minister of Finance (Minfi), Alamine Ousmane Mey, revealed that the government would, starting from 21 August 2017, disburse a total of FCfa 180 billion for companies.

According to the Minfi, this decision, which is the result of an order from the president of the Republic, is meant to service the internal debt of the State. This is, among others, about paying off the invoices of the State’s suppliers and reimbursing VAT credits, for a total of FCfa 100 billion. 

Concurrently, in front of the members of the executive committee of Gicam, Alamine Ousmane Mey declared “FCfa 80 billion will be made available to banks to revive company loans (…) The actions will be effective from the week starting 21 August”. The disbursement of this envelope should give a little respite to local economic operators, whose activities generally slow down due to the difficulties faced by the State Treasury, main provider of contracts in the country.

As a reminder, during the first quarter of 2017, due to the gloomy economic situation, particularly characterised by the drop in public revenues, the Cameroonian public Treasury was unable to fulfill its financial commitments, in excess of FCfa 246 billion. Indeed, based on the mid-year review of the implementation of the 2017 budget published by the Ministry of Finance, only FCfa 735.9 billion out of the public expenditure of Cameroon, projected at FCfa 982.2 billion for this period, were fulfilled, representing an execution rate of 75%.

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Rita Akana

23.Aug.2017

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On 7 August 2017, one of the two MA 60 in the fleet owned by Camair Co, the Cameroonian public airline, landed on the runway of the Bertoua airport, in the capital city of the Eastern region. According to the management of Camair Co, this was a reconnaissance flight, as part of the preparation for the launch of the Douala-Bertoua and Yaoundé-Bertoua lines.

To achieve this, we learned, the airline has already opened a local office in the Eastern regional capital. Concurrently, indicate authorised sources, the public company Aéroports du Cameroun (ADC – Cameroon Airports), in charge of managing the airports in the country, launched renovation works at the Bertoua airport.

With the upcoming opening of the Bertoua airport to Camair Co flights, this public airline will serve eight regions out of the 10 in Cameroon. Only the towns of Ebolowa and Buea, respectively Southern and South-Western regional capitals, will still be absent from this map of destinations served by the airline, who decided to focus on domestic flights, for the moment, considering the financial difficulties it has been facing since the launch of its activities 6 years ago.

As a reminder, Bertoua is the capital of the Cameroonian region richest in mining and forest resources, but also one of the most landlocked and poorest in the country, based on different official reports.

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Rita Akana

10.Aug.2017

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In demonstration of its commitment to deliver convenient, superior and innovative banking solutions to its customers, the pan-African financial institution, United Bank for Africa (UBA) Group on Wednesday August 2nd 2017 in Douala, Cameroun, launched UBA Connect to facilitate payments for cross border transactions within Africa .

 

The UBA Connect, which is an extension of the UBA Instant Transfer Services, is conducted on the Bank's award-winning core banking application, Finacle and has been tailor-made to provide solutions to challenges faced by intra-regional traders and businesses in payment for goods and services on the African continent. It enables UBA customers explore the hugely untapped potentials of intra Africa trade through an effortless payment for goods and services within Africa.  

 

Presiding over the launch in the CEMAC region Isong Udom Managing Director/Chief Executive Officer of UBA Cameroon  emphasized that UBA Connect gives customers in the CEMAC Region instant access to their funds over the counter at any Branch within the UBA network in the CEMAC region, immediate payment and processing platforms that bridges gaps in banking services and regional trade and provide ease of business for you as you can seamlessly transact from any country other than the country of your account domiciliation.

 

Speaking on the benefits of the new products to UBA customers, Chukwuma Nweke, Executive Director Operations and Information Technology, UBA Group said ‘ UBA Connect provides ease of business as customers can seamlessly transact from any of 19 African countries in which UBA currently operates, regardless of where the account is domiciled. In addition, the product allows for instant transmission of funds as transactions can be consummated within minutes.

 

“UBA Connect is created with the customers’ convenience in mind, and coming from an institution that has earned its pride of place as an industry leader in trade and payment solutions, the bank will leverage on her reach and channels to connect her customers to their respective accounts in their irrespective home countries from any African subsidiary location in the Group,” Nweke said.

 

The Group Managing Director/Chief Executive Officer, UBA, Kennedy Uzoka, who expressed delight at the launch of the product, stated, “The UBA Connect, which is a non-restrictive and convenient service, demonstrates our resolve to provide  unparalleled experience across all our channels is in line with UBA’s vision to dominate Africa’s digital banking space. The product is targeted primarily at account holders of the Bank and will ensure ease of business as customers can seamlessly transact business from any country in addition to the country of account domiciliation’.

 

In coming weeks, UBA Connect will be launched across all geographies where UBA presently operates.

 

United Bank for Africa Plc is a leading pan-African financial services group, with presence in 19 African countries, as well as the United Kingdom, the United States of America and France.

 

The Bank provides services to over14 million customers globally, through one of the most diverse service channels in sub-Saharan Africa, with over 1,000 branches and customer touch points and robust online and mobile banking platforms.  

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Rita Akana

03.Aug.2017

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During the last quarter of 2014, the customer base of MTN Cameroon, local subsidiary of the South African telecommunications group MTN International, registers the highest drop in 16 years of activity in the country. Based on the financial report for the year 2014 published by the group, the customer base of this mobile operator decreased by 1.6 million subscribers during the period under review, moving from 11.3 million clients at the end of September, to 9.7 million registered clients only at 31 December 2014; due to the adoption “internally, of a new method to determine the customer base”, highlights the report.

However, this sizeable reduction in the number of clients registered with the mobile telephony leader in Cameroon (a market share of 59.4%, according to the 2014 MTN group report) coincides with the launch, in September of the same year, of the operations of Nexttel, subsidiary of the Vietnamese group Viettel, holder of the 3^rd mobile licence in the country and first operator to roll out the 3G technology in Cameroon. This new configuration in the Cameroonian mobile market was not only detrimental to MTN. It was also the case for the French group Orange, number 2 in the market, who lost 280,000 customers during the last quarter of 2014, according to the official financial report of the group.

 “Since the launch of our activities on 22 September, we are happy to see that we are popular with subscribers”, the company posted on its Facebook page on 27 September 2014. “We are the pioneers on the 3G market and are proud to bring happiness to Cameroonians”, the company continued in his post on the social network. Indeed, eight months after the official opening of the network, the 3^rd mobile telephony operator in Cameroon was already “celebrating” 2 million subscribers, we learned through an advert published in the local press throughout the first week of June 2015.

In the same document, the management of Nexttel explains this performance via a fast coverage of the country (81%) and, above all, the efficiency offered by the 3G technology, which until then lacked at MTN and Orange Cameroun, both having to renegotiate new licences by 2015. Moreover, with the enthusiasm noted for Nexttel SIM cards, MTN Cameroun registered a new reduction in its customer base in 2015, this performance indicator having moved from 9.7 million at the end of the year 2014 to 9.2 million subscribers during the year ending on 31 December 2015, reveals the financial report of the group MTN International.

Turnover dropping by FCfa 15 billion in 2015

This pressure on the customer base of the leader in the mobile telephony market in Cameroon, since the arrival of a 3^rd operator negatively impacted on the operational performance of the company, despite the multiple promotional offers. According to the financial statements of the group, the turnover of MTN Cameroun went from FCfa 241.1 billion in 2014 to FCfa 226 billion in 2015, a decrease of FCfa 15 billion (-4.6%) in a year only. Officially, the company however ended the year 2016 with an increase in its turnover (+6.7%) and its customer base, at 9.9 million subscribers (+7.5%). This dual increase can be explained by the acquisition of 3G and 4G licences in March 2015, for a cost of FCfa 75 billion.

We must note that the investments made in 3G and 4G helped to revert some trends in the recent financial statements of MTN Cameroun, which the company itself explained in its various reports as “strong competition”. Indeed, boosted by the increase in the number of 3G and 4G sites from 2015, the data revenues have an increasing importance in the turnover of the mobile market leader in Cameroon.

Based on the financial reports of MTN Cameroun, the revenues generated on this segment increased by 67.5% in 2015, against a comparatively exponential increase of 78% registered during the first quarter of 2016. Thanks to the deployment of 463 sites for 3G and 267 sites for LTE (4G) during 2016, the data revenues represented 19% in the turnover of this telecommunications operator during that year, against 13.7% only at the end of the 3^rd quarter of 2015.

4G Battle on the horizon between MTN and Nexttel

With the recent announcement made by Nexttel to roll out “the real 4G” (a reference to the controversy which came about in December 2015over the real existence of this technology in the country after the simultaneous launch by MTN and Orange, followed by the declaration from the national regulatory office indicating that it had not granted any 4G bandwidth to these operators) in Cameroon starting from 2017, one can fear that the data revenues of the local subsidiary of MTN will be under pressure, considering the appeal generated by Nexttel services on the Cameroonian consumers.

Indeed, since the start of 2017, the third mobile operator in Cameroon announced on its website having secured a customer base of 3 million subscribers, just over 2 years after the launch of its activities in September 2014. The performances achieved by this company are such that Cameroon has become the first market for Viettel group in Africa during the first half of 2016, with global revenues of FCfa 21 billion (USD 35.9 million), revealed the Vietnamese firm in its financial statement.

According to official statistics, during the first half of 2016, the global revenues of Nexttel, subsidiary of the Viettel group in Cameroon, were higher than those of other African subsidiaries which are Halotel in Tanzania (USD 25 million over the same period), Movitel in Mozambique (USD 33 million) and Lumitel in Burundi (USD 18.26 million).

MTN, a declining market share until 2021

Based on the projections of Ovum, a British company specialised in strategic analysis for the networks and telecommunications industry, Nexttel foothold will grow in the telecommunications market in Cameroon over the 2017-2021 period. Indeed, we learned, out of the 6 million new mobile customers in the country during this period, the highest increase will be registered for Nexttel, who will expand its customer base by close to 14%, against 6.7% for Orange Cameroun and only 3.6% for MTN.

 Par ailleurs, au cours de la période sous revue, projette la même source, les parts de marché de tous les opérateurs de mobile actuellement en activité au Cameroun progresseront, au détriment de MTN Cameroon. Concrètement, en 2021, l’actuel leader du marché du mobile ne pourra plus revendiquer que 44,6% de parts de marché, contre 53,6% à fin février 2017, en baisse de 6% sur une période de 5 ans. Dans le même temps, souligne Ovum, Orange Cameroun grignotera près de 3% de parts supplémentaires, pour atteindre 37%, contre 34,7% à fin février 2017 ; tandis que Nexttel, le petit poucet du marché, s’adjugera 15% des parts, en progression de 3,4% par rapport aux 11,6% enregistrés à fin février 2017.

Moreover, during the period under review, the same source forecasts, market shares for all mobile operators currently in activity in Cameroon will increase, at the expense of MTN Cameroon. In practical terms, in 2021, the current leader in the mobile market will only cover 44.6% of the market, against 53.6% at end February 2017, a drop of 6% over a period of 5 years. At the same time, highlights Ovum.

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Rita Akana

02.Aug.2017

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Alphabet's Google aims to train 10 million people in Africa in online skills over the next five years in an effort to make them more employable, its chief executive said Thursday.

The U.S. technology giant also hopes to train 100,000 software developers in Nigeria, Kenya and South Africa, a company spokeswoman said.

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Rita Akana

29.Jul.2017

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Nigeria's Senate has withdrawn a report that largely exonerated South African telecoms giant MTN of accusations of illegally repatriating $14 billion and rebuked the Nigerian central bank for regulatory failures.

The report, presented to the Senate on Thursday and reviewed by Reuters, was almost immediately sent back for further work because it did not capture possible infractions by all stakeholders, two people familiar with the matter said.

Parliament's upper house agreed in September to investigate whether Africa's biggest telecoms firm unlawfully repatriated $13.92 billion from Nigeria - its most lucrative market which generates a third of its revenue - between 2006 and 2016.

MTN, which has denied any wrongdoing, could not immediately be reached for comment.

The crux of the allegation is that MTN did not obtain certificates declaring it had invested foreign currency in Nigeria within a 24-hour deadline stipulated in a 1995 law, making the repatriation of returns on the investments illegal.

The Senate formed a committee to investigate the allegations against the South African company, the Central Bank of Nigeria (CBN) and commercial lenders such as Nigeria's Stanbic IBTC Bank PLC.

The committee's report did not recommend any punitive measures against MTN.

Instead, the report rebuked Nigeria's central bank for its failure to monitor fund transfers to and from the country, calling its oversight of banks "inadequate".

The report recommended that the Senate "condemn the Central Bank of Nigeria for failing in its duty" to address problems with monitoring foreign exchange transfers. 

Findings Dismay

The CBN's duty is to correct and, if needed, sanction banks and their customers for any wrongdoing, which it never did, said the report, adding that the central bank never testified to the committee that there had been any infractions.

By never applying sanctions, the CBN had lent credence to the commercial banks' argument that they were not breaking any rules by transferring foreign currency, the report said.

A CBN spokesman was not immediately available for comment.

However, the report also urged the central bank to "sanction Stanbic IBTC for improper documentations in respect of capital repatriation and loan repayments amounting to $388,195,183 and $199,440,952 respectively".

Stanbic IBTC is "waiting for the formal communication from the Senate committee on the matter, so that we can obtain clarity on this issue," said a spokesman for the bank.

The report findings were met with dismay by some Senators.

They did not understand why the report largely condemned the central bank while MTN and commercial banks that transferred money overseas were barely reprimanded, said one of the people familiar with the investigation.

The document was a poorly investigated report full of holes, the person said, speaking on condition of anonymity.

It has now been withdrawn for consultations and further legislative work, said the other person with knowledge of the investigation.

The currency transfer row is just the latest regulatory issue to affect MTN in Nigeria.

MTN paid the government 30 billion naira ($98 million) in part settlement of a 330 billion naira fine for not disconnecting unregistered SIM cards, an MTN source told Reuters in March. 

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Rita Akana

29.Jul.2017

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