MTN Cameroon and the National Deposits and Consignments Fund (CDEC) on February 25 signed an agreement governing the management of security deposits paid by certain subscribers. The signing is to be followed by a first transfer report covering an amount exceeding CFA400 million, according to an authorized source.
The funds correspond to guarantees required by the telecom operator when certain contracts are signed. These deposits are intended to cover the risk of unpaid bills or the non-return of equipment made available to customers. They are not payments for services but financial guarantees. In principle, they must be refunded at the end of the contractual relationship, unless outstanding debts or breaches of contract justify deductions.
The arrangement falls under Law No. 2008/003 of April 14, 2008, governing deposits and consignments, as well as Decree No. 2023/08500/PM of December 1, 2023, which sets out the procedures for transferring funds and assets to the CDEC. “In practice, when companies hold sums that are intended to be returned to third parties, the reform requires that they be deposited with the CDEC to secure their safekeeping and harmonize their management,” the CDEC said.
Separating Revenue From Guarantees
From an economic standpoint, the issue centers on separating financial flows. Security deposits constitute temporary cash holdings. Although collected by the operator, they are not recognized as permanent revenue because they must be returned, except in specific contractual cases. Their transfer to the CDEC clarifies the distinction between operating income and funds held as guarantees.
The move also improves traceability, reduces accounting ambiguities and strengthens oversight of a process that can be sensitive when refunds are requested.
The initial transfer of more than CFA400 million provides an indication of scale. While it does not represent the total value of deposits collected across MTN’s entire subscriber base, it illustrates the financial weight such guarantees can carry in the telecommunications sector, where managing payment risk and equipment allocation is central to the business model.
The agreement specifies that it aims to define “optimal conditions” for cooperation, detailing procedures for collecting deposits, transferring them to the CDEC and reimbursing them upon request. For consumers, the key issue is transparency: understanding the purpose of the deposit, the conditions under which deductions may be made and the terms of reimbursement. For MTN, the framework provides a structured mechanism to address unpaid bills while facilitating refunds.
At the institutional level, the operation tests the role of the CDEC as a trusted third party for funds originating from private companies. If extended to other sectors that rely on security deposits, the mechanism could formalize a broader circuit for consignments, with stricter standards of monitoring, transparency and financial discipline. The transfer signals that the reform is moving from legal provisions to practical implementation, with already significant amounts involved.
Baudouin Enama
