The renationalization of Cameroon’s electricity distributor, Eneo, has raised concerns at the International Monetary Fund (IMF). In its latest assessments published in mid-2026, the Washington-based institution cautioned Yaoundé about the potential financial burden of the deal, which saw the state acquire nearly all shares of the former subsidiary of British fund Actis. Now rebranded as Socadel, the company is 95% state-owned, with the remaining 5% held by employees. The IMF warns that this move could further strain an already tight national budget.
Public sector takes on private liabilities
The IMF’s findings are clear: transferring ownership of the historic electricity distributor to the public sector shifts structural liabilities—long unresolved—onto the national budget. Outstanding tariff imbalances, cross-debts with public administrations, and unpaid dues to independent power producers now fall under the responsibility of the Treasury. This comes at a time when Cameroon’s fiscal space is severely limited.
The country is implementing a program supported by the Extended Credit Facility and the Extended Fund Facility, balancing public debt servicing, fiscal consolidation, and social spending. Absorbing Eneo’s financial shortfalls adds another layer of complexity to an already tight equation. The IMF stresses the urgency of preventing Socadel from becoming a recurring drain on public finances.
An unsustainable business model
The IMF also questions the long-term viability of the newly state-controlled operator. Its analysis describes Socadel’s economic model as fundamentally unbalanced. Revenue from electricity tariffs fails to cover production and distribution costs, while technical and commercial losses continue to mount. When the state intervenes with compensation, it often does so through implicit subsidies or deferred payments that eventually return to the budget as liabilities.
The ownership structure—95% state, 5% employees—reflects this new reality. While employee involvement in governance may enhance internal cohesion, it does little to address the core financial challenge: restoring profitability. The IMF notes that Actis’s exit, finalized months earlier, was not accompanied by a tariff reform or a robust recovery plan, leaving investors and lenders uneasy.
Balancing energy security and fiscal prudence
Despite these concerns, Cameroon’s electricity sector remains critical to the nation’s economic ambitions. It underpins industrial competitiveness, supports the rollout of major hydroelectric projects like Nachtigal and Memve’ele, and aligns with the country’s 2020-2030 universal energy access strategy. A failure in distribution could disrupt the entire energy value chain, from producers to end consumers, including the national grid operator Sonatrel.
To mitigate risks, the IMF urges Cameroon to define a clear mandate for Socadel, establish a credible tariff adjustment pathway, and resolve the tangled web of cross-debts between the state, independent producers, and the distributor. Without these steps, the likelihood of repeated public guarantees for the utility remains high. Technical IMF missions are expected to review governance and operational conditions in the coming months to assess feasibility.
Equally important is the message to investors. The departure of a major private operator from an African utility’s capital, followed by renationalization, raises questions about the stability of public-private partnership frameworks in the energy sector. Yaoundé must prove that Socadel is not a temporary safeguard but the foundation for broader reforms in energy governance. The IMF’s findings, delivered in 2026, are intended to shape upcoming policy decisions.
