The Ministry of Public Contracts has introduced a new circular imposing the deposit of guarantees with the Caisse des Dépôts et Consignations. A measure that Cameroonian employers, represented by GECAM, a restrictive judge, because it could rule out SMEs from public contracts and weaken the banking system.
The provisions of the circular letter from the Ministry of Public Contracts of June 5, 2024 concern the group of companies in Cameroon (GECAM). In fact, the president of this body, Célestin Tawamba, has just notified the Minister of Public Comtracts in order to request a suspension of his application on a precaution.
To justify his approach, the president of the most powerful Cameroonian employers, bases his argument on three main reasons: the contradiction generated by the circular compared to articles 13 to 23 of the OHADA uniform act; The contradiction generated by the circular with regard to the COBAC regulation relating to the classification, the accounting and provisioning of the claims of credit institutions; and, finally, the use of a normative framework such as the circular letter for a substantial modification of the public procurement code.
GECAM’s Objections
On the contradictions between the circular and the OHADA uniform act, Célestin Tawamba recalls that the surety commits to the creditor, under the terms of the OHADA uniform act of December 15, 2010. This provision does not provide for a prior deposit with a third party and requires a prior notice of the debtor before activation of the guarantee. The circular imposes a “first demand” execution, which goes against this logic. “Nowhere is mentioned the obligation to record the sums with a third party and the surety is only carried out after a formal notice from the debtor, which has not been without effect unlike the circular letter which obliges the financial institution to be subrogated to the tenderer at first request,” said the president of GECAM.
Then, Célestin Tawamba puts the requirement for deposit of 100% of the deposit in cash at the Caisse des Dépôts et Consignations. For him, this provision threatens not only to disappear an “essential activity of credit establishments, in particular credit by signature”, but also the SMEs which would thus be excluded from the field of public contracts. Finally, Célestin Tawamba believes that such a restrictive part, the consignment receipt in this case, cannot come and modify the contract process by “a simple circular”.
Legal framework and Compliance with the OHADA
On the first two exceptions raised by the president of the GECAM, within the meaning of the law of April 14, 2008 governing deposits and consignments in Cameroon, article 5 provides that the guarantees required within the framework of public contracts are considered as administrative consignments. Also any deposit in the context of public procurement must now be assimilated to a deposit. Because, recalls the Ministry of Public Contracts, the guarantees required today by the owners and the contracting authorities delegated to bidders and contractors, in force since 2008, have been formed with financial institutions (banks or insurance companies).
In addition, in title VI of the OHADA uniform act relating to accounting law and financial information, deposits and guarantees are defined as “sums paid to third parties or received from third parties, as guarantee or surety and unavailable until the completion of a suspensive condition or deposits that the entity can receive as a guarantee. ” According to a business law expert, article 10 of the OHADA Treaty, modified by the Treaty of Quebec, stipulates that “uniform acts are directly applicable and compulsory in the Member States, notwithstanding any contrary provision of internal, anterior or posterior law”.
Threat to Signing Credit
According to the 2018 COBAC regulations, establishments must constitute provisions covering their commitments. Today, each deposit is confined to an account open to the CDEC, without immediate cash mobilisation. This protects the liquidity of establishments. In an interview with Ecomatin, the CEC of the CDEC, Richard Evina Obam, already denounced the financial fragility of certain SMEs and the dubious regularity of certain sureties issued, estimating FCFA 300 billion the damage suffered by the State. For ARMP experts, the strict application of the circular aims to brake the abuses in programs of sureties, often not very secure, even fictitious. “The security issued have long been simple administrative formalities. From now on, they take a binding form, and that disturbs, ”says a business law expert.
To the Origins of the Reform
In the regulator, anonymity experts indicate that quarreled reform is justified by the fact that the termination of public contracts, in recent years, has amplified tensions between project owners, insurance companies and credits. This has been during the calls for execution of guarantees intended to cover the failures of the providers. By way of illustration, he observes, “the recovery procedures arising from disputes relating to the call for sureties could multiply with the impact, the mobilisation of around FCFA 200 billion due to the State for the termination of the contracts for failure of the providers”. Added to the FCFA 300 billion invoked by the CDC General Manager, this will make a colossal sum of FCFA 500 billion.
Thus, thanks to the operationalisation of the Caisse des Dépôts et Consignations, he continues, this institution must, on behalf of the public treasury, to recover funds due within the framework of certain guarantees issued for the benefit of the Ministry of Public Works for more than FCFA 100 billion. This worrying situation highlights the persistent difficulties faced by the public contract sector, due to the non-performance of commitments guaranteed by guarantees.
Faced with this problem, the State has set up, as is the case in many countries such as France, Senegal, Côte d’Ivoire and Tunisia, a fund of deposits and consignments. This structural reform imposes increased discipline on credit institutions and insurance companies, which will no longer be able to ignore the requests of the sureties issued by the contracting authorities.
[Culled and loosely translated from EM)
