PRLog (Press Release) – Apr 19, 2011 – Despite having one of the worst business environment ratings in Africa, Cameroon's construction sector looks set to return to growth in 2011. Strong foreign investment, driven by the country's wealth of natural resources, will deliver 3% year on year (y-o-y) growth for 2011. This will take the industry value to US$650mn. This growth is expected to continue over the forecast period with y-o-y growth averaging 3.76% until 2015 when the industry will be valued at US$775mn.
* France is to fund US$436mn worth of agricultural and infrastructure projects in Cameroon between now and 2016. Around 34% of the total funds will be dedicated to urban and infrastructure developments which include plans for another railway bridge over the Wouri River. The funds are part of Kenmore Bisque 15 inchi a deal made between France and Cameroon when the African country completed the World Bank Debt Relief and Development Initiative in 2006. * Cameroon's government has said that the deep-sea Kribi Port project will benefit from a XAF207mn (US$407.03mn) loan from the Export-Import Bank of China (ChinaEximbank). The concessionary loan will finance the first phase of Kribi Port, which is designed to process higher quantities of minerals from a number of mining projects which will become operational in the next five years. The total cost of the port's first phase stands at around XAF282bn (US$554.51mn). * Ottawa-based GCN Canada announced a US $200 Million agreement with SIKON Infrastructure to provide planning and infrastructure works for the Emerald Coast Financial & Tourism Free Zone Project in Cameroon. The first phase will provide road works, drainage, sewage and wastewater management, and electrical and general site infrastructure. SIKON will also collaborate with GCN Canada to fund the initial development through its financing network. Future collaborative phases will include environmentally friendly energy production (wind turbine and solar), and on and off-site development programmes. * Cameroon has awarded France-based Coyne et Bellier a US$16.2mn contract to manage the building of the Lom Pangar hydroelectric project across the Sanaga River Basin. The 56MW hydroelectric project includes construction of the 46m Lom Pangar dam and a 540 square kilometre (sq km) reservoir capable of storing 6 billion cubic meters (bcm) of water. The hydroelectric dam will be capable of generating its own electricity and flows will be controlled in order to improve power generation in downstream hydroelectric projects. Under the contract, the French company will conduct site studies, monitor supply and installation of hydroelectric equipment and manage project construction.
Presidential elections are to be held in 2011 and we believe the ruling Cameroon People's Democratic Movement will win again. While we believe current president Paul Biya will be the party's candidate, we cannot discount the possibility he may step down. If this were to occur, we believe it would pose a risk to political stability, but a managed succession is less risky than an unpredictable one brought about by Biya's sudden incapacitation
Our forecast for growth in 2011 has been reduced to 2.9% from 4.6% following a push-back of expected oil revenues from new fields, while the rest of our real GDP projections remain unchanged at an average of 4.7% per annum between 2012 and 2015 as new mega-project investment moves forward. The biggest risk to our outlook is a high concentration of bank loans to public enterprises, which could pose problems for the banking sector over the next year, although the impact on the wider economy will be muted by the underdeveloped state of the financial sector.
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