CDEC: Recovers CFA4.2 Billion Babadjou-Bamenda Bank Guarantees

• CDEC recovered CFA4.2 billion in bank guarantees for the Babadjou-Bamenda road contract.
• The recovery was announced on October 30, 2026, after months of disputes with Afriland First Bank.
• BGFIBank Cameroon facilitated the recovery by transferring funds belonging to Afriland First Bank to CDEC.
• CDEC had previously issued demands for CFA3.68 billion to BGFIBank and Orange Money Cameroon on February 26, 2026.
• The exact amount BGFIBank contributed to the recovery has not been disclosed.

The successful retrieval of the CFA4.2 billion in bank guarantees underscores the rigorous enforcement capabilities of state financial bodies in Cameroon.

The Cameroon Deposits and Consignments Fund (CDEC) has successfully recovered all bank guarantees associated with the Babadjou-Bamenda road rehabilitation contract, totaling CFA4.2 billion. This significant financial recovery was officially announced by the institution on October 30, 2026, during a press luncheon held in Yaoundé. The guarantees were originally issued in connection with the public works contract awarded to BOFAS Sarl for the critical infrastructure project.

This comprehensive recovery concludes an extended period of contention and legal maneuvers. The CDEC's announcement marks the resolution of a complex financial dispute that involved multiple banking institutions and substantial sums, demonstrating the fund's commitment to securing public funds. The successful retrieval of the CFA4.2 billion in bank guarantees underscores the rigorous enforcement capabilities of state financial bodies in Cameroon.

The path to recovering the CFA4.2 billion in bank guarantees involved protracted disputes with Afriland First Bank, which had initially provided these financial assurances. Following the initial disagreements, the CDEC initiated legal proceedings targeting various institutions that held assets belonging to Afriland First Bank. A pivotal moment in this recovery effort came with the involvement of BGFIBank Cameroon.

BGFIBank Cameroon played a crucial role by facilitating the transfer of funds belonging to Afriland First Bank directly to the CDEC. Having been identified as a third-party custodian of Afriland's assets, BGFIBank made the strategic decision on March 26, 2026, to withdraw from the ongoing legal actions and instead engage in direct negotiations with the CDEC. While BGFIBank's contribution was instrumental in the overall CFA4.2 billion bank guarantee recovery, the precise amount it transferred has not been publicly disclosed. This intervention by BGFIBank followed several months of prior recovery efforts by the CDEC.

Earlier in the recovery timeline, specifically on February 26, 2026, the Cameroon Deposits Consignments Fund had issued formal payment demands to both BGFIBank Cameroon and Orange Money Cameroon. These demands sought a total of CFA3.68 billion, with CFA3.58 billion specifically detailed in the initial request. The successful resolution, culminating in the recovery of all Babadjou-Bamenda bank guarantees, highlights the robust enforcement mechanisms available to state entities in Cameroon for securing public contract funds.

This outcome sets a significant precedent for the recovery of defaulted bank guarantees on public contracts. It underscores the CDEC's ability to pursue and reclaim funds, even through third-party financial institutions, when contractual obligations are not met. The case serves as a clear illustration of the rigorous legal and financial avenues that can be employed to ensure accountability in large-scale public infrastructure projects, reinforcing the importance of sound financial guarantees.

This case highlights the robust enforcement mechanisms available to state entities like CDEC in Cameroon for recovering defaulted bank guarantees on public contracts. Lawyers advising financial institutions or contractors involved in similar projects should note the precedent set by CDEC's successful pursuit of funds, including through third-party banks, which underscores the importance of due diligence and robust contractual terms for guarantees.

Source: Original reporting via Business in Cameroon