(Business in Cameroon) – In 2024, the volume of non-performing loans held by banks in the Central African Economic and Monetary Community (CEMAC) reached CFA1,536 billion, up 6.3% year on year, according to the Central African Banking Commission’s (COBAC) 2024 report. CEMAC includes Cameroon, Congo, Gabon, Equatorial Guinea, Chad, and the Central African Republic.
COBAC defines non-performing loans as bank credits of any type, even when backed by collateral, that present a probable risk of partial or total non-recovery.
In 2024, non-performing loans accounted for 75.9% of total distressed assets across the region, down slightly from 76.9% a year earlier. While their share eased marginally, they remain the main driver of balance-sheet deterioration in the banking sector, largely due to rising borrower insolvency in Gabon and Cameroon.
According to COBAC, the stock of non-performing loans in Gabon jumped 31.4% in 2024, a pace four times faster than the overall increase in distressed assets across CEMAC, which rose 7.7% over the same period. In Cameroon, non-performing loans grew by a more moderate 14.5%, but still reflected higher borrower stress than in Congo, where they increased by just 5.6%.
By contrast, non-performing loans declined in Chad (-11%), Equatorial Guinea (-5.4%), and the Central African Republic (-15.1%) during the year.
Cameroon and Gabon dominate regional credit markets
These contrasting trends partly reflect the structure of the region’s banking system. Cameroon alone accounts for 34% of the CEMAC banking network, with 19 active banks in 2024 out of a total of 56 across the region. Congo and Chad each operate 10 banks, representing 17.8% of the network apiece.
Gabon, despite having only eight active banks in 2024, or 14.3% of the total, hosts the second most dynamic credit market after Cameroon. Between July and September 2024, the two countries together accounted for 80% of all new loans issued by CEMAC banks, according to the Bank of Central African States (BEAC) report on lending rates.
By country, loans granted by Cameroonian banks represented 67.45% of new credit issued in the region, followed by Gabon at 12.60%, compared with 62.9% and 16.17%, respectively, a year earlier, the BEAC said.
This dominant position in regional credit markets translates into higher exposure to default risk for banks in Cameroon and Gabon. It also mechanically drives up the aggregate level of non-performing loans in CEMAC, as shocks in these two economies carry outsized weight in regional indicators.
Weak risk management and economic pressures
Beyond geographic concentration, BEAC attributes the rise in unpaid bank loans in CEMAC to a mix of structural and cyclical factors.
On the structural side, the central bank points to weaknesses in risk management systems and governance within banks. It notes that some institutions prioritize commercial expansion over rigorous credit risk analysis, undermining the overall quality of loan portfolios.
On the cyclical front, BEAC highlights growing fiscal pressures on CEMAC governments and intermittent slowdowns in economic activity. These conditions have led to a buildup of unpaid government bills, squeezing public contractors—often companies already indebted to banks.
This chain effect has pushed many borrowers into default, fueling the rise in non-performing loans across the region.
Brice R. Mbodiam
