AFG Bank Cameroun has absorbed about US$83 million in state arrears, marking a notable shift in how Cameroon is managing its growing domestic debt burden, according to the latest public debt report covering the period up to the end of September 2025.
The report shows that the bank founded by Ivorian businessman Bernard Koné Dossongui has become an increasingly central actor in the settlement of government arrears through a series of debt assignment transactions. These operations allow the state to transfer its payment obligations to a financial institution, which then settles claims with suppliers or creditors in exchange for government-backed repayment terms.
AFG Bank’s rising role reflects a broader strategy by Cameroonian authorities to rely more heavily on domestic financial institutions to manage short-term liquidity pressures, particularly as external financing conditions remain tight and public finances strained.
Under the debt assignment mechanism, companies owed money by the state agree to transfer their claims to a bank. The bank pays the companies often at a discount and in return becomes the state’s creditor. While the approach helps clear arrears more quickly and injects liquidity into the private sector, it also shifts liabilities onto the banking system and raises questions about transparency and long-term debt sustainability.
By the end of September 2025, AFG Bank Cameroun had taken on roughly US$83 million in assigned state arrears, placing it among the most exposed domestic lenders to government obligations. The figure underscores the bank’s growing footprint in Cameroon’s public finance landscape, traditionally dominated by a handful of long-established local and regional banks.
Cameroon has struggled for years with the accumulation of domestic arrears, particularly to construction firms, service providers and fuel suppliers. These unpaid bills have weighed heavily on private sector cash flows, contributing to delays in projects, job losses and rising non-performing loans across the banking sector.
Authorities have repeatedly pledged to reduce arrears, seeing them as a drag on economic growth and a threat to financial stability. Clearing them has become a recurring condition in discussions with international partners, including the International Monetary Fund, which has urged greater discipline in public spending and improved debt management.
The growing use of debt assignments reflects both urgency and constraint. With limited fiscal space and rising external debt servicing costs, the government has turned to domestic banks as intermediaries to smooth payments without immediate cash outlays from the treasury.
However, analysts caution that while the approach offers short-term relief, it effectively converts payment delays into formal debt, often at higher cost. Banks assume credit risk and expect compensation through interest or fees embedded in the repayment structure, adding to the state’s future obligations.
AFG Bank’s expansion into this niche also highlights the rapid rise of the AFG Holding group across Francophone Africa. Founded by Dossongui, the group has steadily expanded its presence in West and Central Africa, positioning itself as a regional player willing to engage in complex sovereign-related transactions.
In Cameroon, the bank’s growing exposure to public debt has drawn attention from regulators and market watchers alike. Concentration of government risk in a limited number of institutions can heighten systemic vulnerabilities, particularly if fiscal pressures intensify or repayment schedules slip.
The government, for its part, argues that the assignments are part of a controlled and monitored process aimed at restoring confidence among suppliers and stabilising the domestic economy. Officials say priority is being given to clearing verified arrears while avoiding a sharp increase in short-term treasury borrowing.
Cameroon’s total public debt has continued to edge higher, driven by infrastructure spending, security outlays and persistent budget deficits. While most attention has focused on external borrowing, domestic debt including arrears and their securitisation is playing an increasingly visible role.
As AFG Bank deepens its involvement, the challenge for policymakers will be to ensure that arrears clearance translates into lasting fiscal reform rather than a reshuffling of liabilities. Without tighter budget execution and stronger controls on spending commitments, analysts warn, the cycle of arrears could simply re-emerge this time embedded more firmly within the financial system.
For now, the absorption of US$83 million in state arrears underscores both the scale of Cameroon’s domestic debt challenge and the evolving role of local banks in keeping the government’s finances afloat.
