Electricity sector reform in Cameroon: is privatization the solution?

The economic difficulties of Cameroon and of its Government-owned companies led the International Monetary Fund (IMF) and the World Bank to set up a vast privatization program, with the Governmentʹs collaboration. In the electricity sector, the state had a complete control over the industry through the SOciété National d’ELectricité (Sonel), an integrated monopoly utility. Under the IMF–World Bank program, Sonel has been sold to foreign interests. This article presents Cameroonʹs electricity sector, the proposed reform and the importance of electricity in economic development. An evaluation of the reform is presented from two different perspectives. First, we consider the reform from a theoretical and market design point of view. Second, we challenge the reform from a more fundamental level, by questioning the relevance of privatization at this stage of the electricity sector development. This brings us to review the strategic place of electricity in economic growth, how different countries have dealt with their electricity industry in early development stage and how the objective of multinational corporations could be in conflict with specific electricity sector goals. From these two different perspectives, we conclude that the IMF and the World Bank have set up a reform process that is against good public policy. We conclude with some suggestions for improving the reform process.