Rehabilitation of enterprises of the public and semi-public sector

Privatization is one of the components of the Government Programme for the rehabilitation of enterprises of the public and semi-public sector. The other components include the liquidation of structures whose economic situation is hopelessly compromised and restructuring those which should remain in the portfolio of the State, including those earmarked for privatization.

Before the start of the rehabilitation process of enterprises of the public and semi-public sector, there were over 150 enterprises under the portfolio of the State including 24 in the financial sector.

Firstly, and in the logic of rehabilitation, about thirty enterprises signed performance contracts with the State assigning objectives for the contracting companies and creating reciprocal obligations with the Government.

Thus, most companies earmarked for privatization were subject to restructuring; taking into account all the vital aspects that include the financial situation as well as the indebtedness, human resources and streamlining of the management tool. The implementation of this restructuring component subsequently enabled the placement on the market for attractive enterprises.

The privatization programme

The privatization programme of Cameroon should be analysed through three (3) phases:

1 – First Phase of the Programme

The programme started with a list of enterprises operating in sectors as diverse as the agro-industry (OCB CAMSUCO), the timber industry (COCAM and SOFIBEL, SEPBC), printing (CEPER and the National Printing Press) , breeding (ONDAPB) industries.

All enterprises on this first list have so far found a lessee except the National Printing Press removed from the list of privatization and the ONDAPB station in Douala.

2 ÔÇô Second Phase of the Programme

The second list was established by Decree No. 94/125 of 14 July 1994. The presence of a number of heavyweight structures in the economy on the list marks the acceleration of the process in Cameroon. These are the Soci├®t├® Camerounaise des Palmeraies (SOCAPALM), the Cameroon Development Corporation (CDC), the Cotton Development Company (SODECOTON), the Cameroon Rubber Company (HEVECAM) and the National Railway Corporation of Cameroon (REGIFERCAM) and the Cameroon Airlines Company (CAMAIR).

As of today, SODECOTON and CDC are still to be privatised.

3rd – Third Phase of the Programme

Since the Head of State\’s speech of the 1st June 1995, utility companies have entered the \”pipeline\” of privatisation. This new phase concerns the telecommunications sector, production and distribution of electricity and drinking water.

Since the telecommunication sector is not entirely managed by autonomous legal entities, it was essential to restructure this sector in order to liberalise it under the best conditions. Also, the Government of the Republic of Cameroon first set the strategy leading to the privatisation of the telecommunication sector. This strategy has permitted to:

  • put in place a legal and institutional framework involving particularly the creation of a regulatory body;
  • adopt a target market structure;
  • create four entities including a company operating landline communication, a company for the exploitation of mobile phones, a postal company and a Postal Savings Bank;
  • attribute by tender, licence to a second cell phone operator. The tender was won by France Telecom against MTN, TELECEL and MSI.

As part of the modernisation of the legal environment, a Law on the regulation of the telecommunication sector was passed by Parliament and promulgated (Law No. 98/014 of 14 July 1998). The texts relating to the organisation and functioning of the Regulation Agency and the creation of the telecommunication entities were also taken.

As regards the sectors of electricity and water, a new framework legislation has been passed, permitting them to open to public-private partnership.

Liberalization and privatization of monopoly sectors require the reform of each of its sectors. Hence the delays recorded for the privatisation of companies.

In addition to the conventional privatization, there are plans to launch in the coming years, operations of BOO (Build Own Operate) and BOT (Build Operate Transfer).

For more information: www.ctpl-cm.org

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