Cameroon: AfDB Road Contractor Payment Dispute Hits CFA12 Billion

• Chinese contractors CGCOC Group and Xinjiang Communication Construction Group are owed approximately CFA12 billion for work on Cameroon's Maroua-Bogo-Pouss road.
• The payment dispute arose because an African Development Bank (AfDB) loan agreement closed on December 31, 2024, while construction was still ongoing.
• Since January 2025, invoices corresponding to the AfDB's 85% contribution have not been paid, impacting both firms.
• CGCOC Group alone is owed about CFA9 billion, comprising CFA8 billion from the AfDB's share and CFA849 million from the Cameroonian government's 15% contribution.
• The issue was documented during a review of jointly financed road projects in Yaoundé on September 23, 2026.

Lawyers advising contractors on public infrastructure projects in Cameroon should scrutinize financing agreements for clauses related to loan closure and payment continuity, particularly in multi-party funding scenarios, to mitigate similar payment default risks.

A significant financial challenge has emerged for two Chinese construction firms engaged in a critical road project in Cameroon, highlighting a major payment dispute. CGCOC Group and Xinjiang Communication Construction Group are currently facing substantial outstanding payments, totaling approximately CFA12 billion, for their work on the Maroua-Bogo-Pouss road situated in Cameroon’s Far North region. This Cameroon AfDB road contractor payment dispute stems directly from the premature closure of a loan agreement provided by the African Development Bank (AfDB) while construction activities were still actively underway.

The unexpected termination of the AfDB's financial commitment has left these contractors in a precarious position, with invoices for completed work going unsettled. This situation was brought to light during a comprehensive review of road projects co-financed by various entities, which took place in Yaoundé on September 23, 2026. The review document explicitly detailed the accumulation of these unpaid bills, underscoring the direct link between the loan's closure and the subsequent payment cessation.

The root cause of the payment cessation can be traced to the formal closure of the AfDB loan agreement on December 31, 2024. Following this date, specifically from January 2025 onwards, all invoices pertaining to the AfDB's designated contribution to the project have remained unpaid. The financial structure of the Maroua-Bogo-Pouss road initiative stipulated that the African Development Bank was responsible for funding a substantial 85% of the project's eligible expenditures, with the Cameroonian government committed to covering the remaining 15%. This arrangement meant that a significant portion of the project's financial lifeline was abruptly severed.

Among the affected entities, CGCOC Group, which was awarded the Lot 1 contract for the road, has reported an accumulation of roughly CFA9 billion in outstanding payments. A detailed breakdown within the review document indicates that CFA8 billion of this amount is directly attributable to the AfDB's unpaid share, while an additional CFA849 million represents the Cameroonian government's unfulfilled portion. Similarly, Xinjiang Communication Construction Group has also accrued significant unpaid bills on its contract, contributing to the overall financial shortfall experienced by the project's implementers. The CGCOC Group unpaid Cameroon and Xinjiang Communication Construction Group payment issues collectively underscore the severe financial strain placed on these companies.

This ongoing Cameroon public works payment default presents a critical case study for legal professionals and contractors involved in large-scale public infrastructure projects, especially those with multi-party international financing. The review conducted in Yaoundé on September 23, 2026, served not only to quantify the outstanding debts but also to highlight the inherent risks when loan agreements conclude before project completion. Lawyers advising contractors on public infrastructure projects in Cameroon should scrutinize financing agreements for clauses related to loan closure and payment continuity, particularly in multi-party funding scenarios, to mitigate similar payment default risks.

The abrupt cessation of payments due to the AfDB loan agreement closure impact underscores the necessity for robust contractual provisions. These provisions should clearly delineate responsibilities and establish mechanisms for payment guarantees and dispute resolution, particularly when international financial institutions are involved. The current predicament faced by CGCOC Group and Xinjiang Communication Construction Group serves as a stark reminder of the potential for significant financial exposure if such protective clauses are not adequately addressed during contract negotiation and project planning.

The ramifications of this payment dispute extend beyond the immediate financial distress of the contractors. Such incidents can erode confidence among international investors and contractors in Cameroon's public works sector, potentially hindering future development initiatives. The inability to secure timely payments for completed work, even when backed by international financial institutions, introduces an element of unpredictability that can deter foreign direct investment in crucial infrastructure development.

This situation highlights the broader challenge of managing complex financial arrangements in large-scale projects. It emphasizes the need for governments and funding partners to ensure seamless financial transitions and contingency plans, especially when dealing with fixed-term loan agreements that may not align perfectly with dynamic project timelines. Ultimately, the resolution of the outstanding CFA12 billion owed to CGCOC Group and Xinjiang Communication Construction Group will be crucial in demonstrating Cameroon's commitment to its contractual obligations and maintaining its reputation as a reliable partner in international development projects.

Lawyers advising contractors on public infrastructure projects in Cameroon should scrutinize financing agreements for clauses related to loan closure and payment continuity, particularly in multi-party funding scenarios, to mitigate similar payment default risks. This case highlights the importance of robust contractual provisions for payment guarantees and dispute resolution when international financing is involved.

Source: Original reporting via Investir au Cameroun