IMF raises alarm over Cameroon’s Eneo renationalization

The renationalization of Eneo in Cameroon has triggered apprehension from the International Monetary Fund (IMF). In its assessments released in May 2026, the global financial institution cautioned Yaoundé about the potential cost implications of the operation. This move saw the state reclaim nearly all capital from the former subsidiary of the British fund Actis. Now rebranded as Société camerounaise d’électricité (Socadel), the utility is 95% state-owned, with the remaining 5% allocated to employees. The Washington-based institution is concerned about an immediate increase in state liabilities within an already constrained fiscal environment.

Shifting financial burdens to a stretched budget

The IMF’s analysis is direct: the government’s takeover of the long-standing electricity distributor transfers significant liabilities, previously managed by a private entity, into the public domain. According to the assessment shared with Cameroonian authorities, this operation shifts structural financial obligations, which have never found sustainable solutions, directly onto the national budget. Issues such as tariff imbalances, outstanding payments between administrations, and accumulating debts to independent power producers now rest squarely on the Treasury’s shoulders.

However, the government’s fiscal flexibility remains limited. Cameroon, currently executing a program backed by the Extended Credit Facility and the Extended Fund Facility, must balance public finance consolidation, debt servicing, and funding social expenditures. Simultaneously assuming the national electricity operator’s cash flow needs further complicates this financial equation. The IMF underscores the critical importance of preventing Socadel from becoming a source of uncontrolled, recurring expenses.

An economic model deemed unsustainable

Beyond the asset transfer, the very viability of the operator is a key concern for the institution led by Kristalina Georgieva. The Fund describes the economic model of the newly public entity as fundamentally unbalanced. User tariffs do not adequately cover the full costs of production and distribution, while technical and commercial losses across the network continue to exert pressure. State compensation, when provided, often takes the form of implicit subsidies or arrears that ultimately revert to the national budget.

The new ownership structure, with 95% state capital and 5% for employees, reflects this new architecture. While this aims to involve staff in governance, it does not address the primary challenge: the distributor’s financial stability. The IMF highlights that Actis’s departure, finalized several months ago, was not accompanied by a comprehensive tariff model overhaul or a sufficiently quantified operational recovery plan to reassure its financial backers.

Securing the electricity sector without deepening the deficit

Despite these challenges, Cameroon’s electricity sector remains strategically vital. It underpins the nation’s industrial competitiveness, facilitates the gradual commissioning of major hydroelectric projects like Nachtigal and Memve’ele, and supports the universal energy access goal outlined in the National Development Strategy 2020-2030. Any failure by the distributor would destabilize the entire value chain, from producers to final consumers, including the transmission company Sonatrel.

For the Fund, the immediate priority is to clarify Socadel’s mandate, establish a credible tariff trajectory, and settle the accumulated cross-debts among the state, independent producers, and the distributor. Without these prerequisites, the risk of recurrent calls on public guarantees is considered high. Several IMF technical missions are expected in the coming months to examine the company’s governance and the conditions necessary for a return to operational balance.

A significant challenge also lies in the signal sent to investors. The exit of a major private operator from an African utility’s capital, followed by renationalization, raises questions about the clarity of the public-private partnership framework in the sector. Yaoundé will need to demonstrate that Socadel is not a defensive stopgap but rather the beginning of a broader energy governance reform. The IMF’s diagnosis in May 2026 is specifically intended to influence these crucial upcoming decisions.