IMF warns Cameroon over Eneo renationalization risks

The recent renationalization of Eneo in Cameroon has drawn sharp concern from the International Monetary Fund (IMF). In its latest assessments published in mid-2026, the Washington-based institution cautioned authorities in Yaoundé about the potential financial burden of the State’s decision to reclaim nearly full ownership of the former British investment firm Actis’s subsidiary. Now rebranded as Société camerounaise d’électricité (Socadel), the utility is 95% publicly owned, with the remaining 5% held by employees. The IMF warns that this move could immediately strain Cameroon’s already tight fiscal space.

Shifting liabilities onto a constrained budget

IMF analysts delivered a stark assessment: absorbing the historic electricity distributor transfers structural liabilities—previously managed by a private entity—directly onto the national budget. Outstanding tariff imbalances, cross-debts with government agencies, and mounting obligations to independent power producers now fall squarely on the Treasury. This shift occurs at a time when Cameroon’s fiscal room remains severely limited.

Under an active program supported by the Extended Credit Facility and the Extended Fund Facility, the government faces the dual challenge of public debt servicing and social spending commitments. Integrating Socadel’s cash flow needs into this equation risks undermining the country’s fiscal consolidation efforts. The IMF emphasizes the urgent need to prevent the new public utility from becoming a recurring drain on public finances.

Questionable economic viability of the new model

The IMF’s scrutiny extends beyond ownership structure, zeroing in on the long-term financial sustainability of the revamped operator. Analysts describe Socadel’s economic model as inherently unbalanced: revenue from consumer tariffs fails to cover full production and distribution costs, while technical and commercial losses continue to erode profitability. When the State intervenes with financial support, it often does so through implicit subsidies or deferred payments that ultimately return to the budget as liabilities.

The capital structure—95% state-owned, 5% employee-share—was intended to foster staff engagement, yet it does little to address the core challenge: restoring financial equilibrium. The IMF notes that Actis’s exit, finalized months earlier, was not accompanied by a comprehensive tariff overhaul or a sufficiently detailed recovery plan to reassure international partners.

Balancing energy security with fiscal prudence

Despite the risks, Cameroon’s electricity sector remains vital to national development. It underpins industrial competitiveness, supports major hydroelectric projects like Nachtigal and Memve’ele, and aligns with the universal energy access goals outlined in the 2020–2030 National Development Strategy. A collapse in the distributor’s performance would disrupt the entire value chain—from producers to end consumers—including the national transmission company, Sonatrel.

To avert further strain, the IMF urges Cameroonian authorities to define a clear mandate for Socadel, adopt a realistic tariff trajectory, and resolve the tangled web of inter-company debts involving the State, independent producers, and the utility. Without these measures, the Fund cautions, the likelihood of repeated recourse to public guarantees will remain high. Technical missions are expected to review governance structures and operational recovery conditions in the coming months.

A final consideration looms over investor confidence. The withdrawal of a major private operator from a key African utility’s capital, followed by renationalization, raises questions about the stability and predictability of Cameroon’s public-private partnership framework. Yaoundé must demonstrate that Socadel represents not a defensive maneuver, but a stepping stone toward broader reforms in energy governance.