Nairobi — Presidential Directives Spurred by IMF Loan Talks Present Opportunity, Risks
Cameroonian president Paul Biya’s recent directives to improve oversight and investigate misappropriation of Covid-19 funding requires additional safeguards, Human Rights Watch said today. The call for greater oversight was apparently spurred by the government’s ongoing negotiations for a new multiyear loan from the International Monetary Fund (IMF).
« The sudden desire to account for Covid-19 money is a positive sign that the IMF and Cameroonian government are paying greater attention to transparency and accountability as they negotiate a third loan since the start of the pandemic, » said Sarah Saadoun, senior business and human rights researcher at Human Rights Watch. « But unless the audits and investigations are independent and credible, the IMF risks falling for check-the-box exercises. »
Between March 29 and April 8, 2021, the secretary general of the presidency, Ferdinand Ngoh Ngoh, writing on behalf of President Biya, sent a series of letters with directives related to Covid-19 funding. A March 29 letter instructed the state auditing agency, Contrôle supérieur de l’État du Cameroun (CONSUPE), to expedite its audit of Covid-19 spending, which would « facilitate concluding a new economic and financial program with the IMF. »
On April 6, Ngoh Ngoh sent the Justice Ministry a copy of a report on Covid-19 spending prepared by an investigative body within the Supreme Court and directed it to open a « judicial inquiry » into those responsible for and complicit in misappropriating Covid-19 funds.
Three days later, media reports republished an undated letter from Ngoh Ngoh to the prime minister asking for a detailed account of funds spent related to the pandemic, which amount to 180 billion CFA (around US$330 million). In a separate letter dated April 8, Ngoh Ngoh announced the establishment of a new task force to oversee future Covid-19 spending and that he would manage the « special fund of national solidarity » established at the start of the pandemic.
These instructions appear to be directly related to Cameroon’s ongoing negotiations for a multiyear loan program with the IMF. Since the start of the pandemic, the IMF has approved two emergency loans to the country totaling $382 million (around 208 billion CFA). The government promised the IMF to use the funds transparently, including by issuing semiannual reports on Covid-19 spending, commissioning an independent audit, and publishing the names of companies awarded procurement contracts and their beneficial (or real) owners. The beneficial ownership provision is new and groundbreaking, since obscuring the true ownership of companies has been a vehicle that aids corruption worldwide.
However, the government has not yet published any detailed information that would enable meaningful public oversight over its spending. The authorities also remain silent regarding the government’s use of a Health Solidarity Fund into which all healthcare centers have paid 10 percent of their revenues since 1993. The fund is meant to serve as a reserve for public health emergencies such as the Covid-19 pandemic.
In July, the Health Ministry, which reportedly received 45.6 billion CFA ($82 million) in additional government funds to respond to the pandemic, published a two-page statement with only a vague breakdown of how the funds were spent. Health Minister Manaouda Malachie has come under particular scrutiny, with a member of an opposition party accusing him of embezzlement. Malachie has denied any wrongdoing, saying, « My hands are clean, and my conscience is clear. »
On April 8, Malachie suspended two Health Ministry officials for alleged « acts of corruption and extorting those who use public services, » although it is unclear if these allegations are linked to Covid-19 funds. On April 12, the Health Ministry sent a letter to 10 senior employees telling them to pay an 11 percent tax that they failed to pay on bonuses they received.
In October 2020, the authorities listed the name and some beneficial ownership information of some companies awarded public contracts since it was a requirement for the second IMF loan. However, the information was not widely released and was only linked to an IMF loan document and not posted on any government website.
In July, the prime minister had instructed the Chambre des Comptes, an investigative body housed within the Supreme Court, to investigate pandemic-related spending. The April 6 letter asking the Justice Ministry to open a judicial inquiry refers to a copy of a report completed by the Chambre des Comptes, but that report appears not to have been made public.
While expediting the CONSUPE audit and opening a judicial inquiry are important steps toward accountability for Covid-19 funding, the lack of transparency and independence of government agencies in Cameroon poses a significant concern about ensuring that these processes are credible and respect due process.
Both CONSUPE and the Justice Ministry are housed within the presidency and are headed by presidential appointees who may be terminated at any time. Speaking to Human Rights Watch, Akere Muna, a Cameroonian lawyer, and former vice chair of Transparency International, expressed concern about political interference in their work. « You cannot expect the fish to buy the hooks, » he said.
Politically motivated anti-corruption investigations or prosecutions that violate due process rights and are perceived as targeting the political opposition has been another problem in Cameroon. In 2006, the government created « Operation Epérvier » (Operation Sparrowhawk), which led to the arrest of numerous high-level officials, including ministers and managers of state-owned companies. Anti-corruption activists have criticized the operation, saying that it had selected targets and that it was intended to sideline political contenders and settle scores by imposing corruption charges.
The government promised the IMF that it would conduct an independent audit of funds, and CONSUPE’s audit does not satisfy that pledge, Human Rights Watch said. In February, the government issued a call for tenders for an independent audit, but it is not clear whether the IMF program is contingent on its progress.
Similarly, the new task force and appointment of Ngoh Ngoh to manage the Covid-19 special fund of national solidarity does not address the fundamental lack of transparency over spending. Moreover, Ngoh Ngoh’s past management of funds has come under scrutiny after he headed the African Cup of Nations (AFCON) project, which ended with the country being stripped of its rights to host the football games due to incomplete construction projects that were beset by corruption allegations.
Moreover, the recent flurry of anti-corruption directives coincides with alarming signs that Cameroon’s backtracking on its transparency commitments: on April 1, the Extractive Industries Transparency Initiative (EITI), an international group that works to end corruption and mismanagement linked to natural resources, suspended Cameroon for failing to publish a report of its extractive revenues from 2018. These reports, which governments are expected to publish regularly, are at the heart of EITI’s effort to improve accountability for resource revenues.
Cameroon is the largest economy in the Central African Economic and Monetary Community (CEMAC), yet over one-third of Cameroonians – 8 million people – live under the poverty line, according to a household survey from 2014, the most recent data available. The Cameroonian economy has been hit hard by the pandemic, compounding pressures stemming from an earlier slump in oil prices and violence in its Far North and Anglophone regions.
IMF assistance is crucial to support people whose livelihoods have been affected, especially the almost 90 percent of workers who are employed in the informal sector. But transparent and accountable governance is key to the success of the program. Toward that end, prior to approving a third loan, the IMF should insist that the Cameroonian government:
Publish the Chambre de Comptes’ report investigation into Covid-19 spending;
Take concrete steps to ensure the independence of the judicial inquiry;
Engage an independent auditor and make publication of its report a later benchmark in the program;
Commit to specific corruption prevention measures, including improving accessibility and quality of public procurement information and making management of the Health Solidarity Fund transparent and rule-based.
« At the same time the government is rushing to satisfy the IMF’s anti-corruption requirements, it has been suspended by EITI for a lack of transparency, » Saadoun said. « The IMF should take seriously the opportunity a new multiyear loan program presents to press for deep-seated governance reforms that will improve Cameroon’s transparency and accountability during this pandemic and beyond. »