Cameroon Takes On VAT Costs to Help Close CFA104.6 Billion Douala BRT Funding Gap

The Cameroonian government will cover VAT on certain purchases for the Douala Urban Mobility Project (PMUD), a step that could help narrow a CFA104.6 billion funding gap and preserve the planned scope and performance of the city’s future Bus Rapid Transit (BRT) system.

According to officials at the Ministry of Economy, Planning and Regional Development (Minepat), Minister Alamine Ousmane Mey confirmed to Douala Mayor Roger Mbassa Ndiné that the state would cover VAT on purchases of goods and services covered by project contracts. The expense will come from a budget line reserved for state contributions to VAT, customs duties and taxes on jointly financed housing and urban development projects.

The measure comes as the PMUD Steering Committee works to secure financing for an additional 66.8 km of feeder roads around the BRT’s pilot corridor. Those works would bring the road network that feeds passengers into the mass-transit system to about 80 km.

As of July 17, 2026, the estimated cost required to complete the project stood at CFA365.4 billion including taxes, compared with CFA260.8 billion in initially available financing. That leaves a CFA104.6 billion shortfall if authorities retain the project’s expanded scope.

Nearly CFA59 Billion in VAT in the Revised Cost

Most of the increase stems from the addition of the new feeder roads. Without those works, the cost base stood at about CFA226 billion before taxes. Their inclusion raises the pre-tax cost to CFA306.4 billion, an increase of CFA80.4 billion. About CFA58.9 billion in VAT brings the total cost to CFA365.4 billion including taxes.

The government’s decision does not reduce the cost of the works. Instead, it changes how part of that cost will be financed, with the state budget absorbing taxes that would otherwise weigh on project execution.

PMUD officials have advocated such an approach in recent months. The Steering Committee had considered favorable tax treatment as a way to substantially reduce the additional financing requirement, with the remaining amount to be secured from financial partners.

The government’s decision now provides an administrative response on the tax component. The PMUD receives World Bank financing through the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA).

Procurement for the second phase of the feeder roads has already started. A tender launched in July covers 66.796 km divided into three lots.

Avoiding a Smaller BRT System

Efforts to close the financing gap come as authorities discuss the future BRT’s configuration with the World Bank. Insufficient resources and schedule constraints have prompted consideration of a less expensive version of the system.

Under the most ambitious configuration, the BRT targets an average commercial speed of up to 35 km/h. The lower-cost alternative under consideration would reduce that speed to between 18 and 25 km/h. A change in configuration would also require revisions to the project’s current operating targets, which include 535,000 passengers a day and a fleet of 251 buses.

Financing is not the project’s only constraint. Some sites intended for operations and maintenance centers still need to be secured, while the project’s closing date is set for June 16, 2028.

A restructuring review with the World Bank is scheduled for late September 2026. “This restructuring review will indeed take place at the end of September 2026, and that is precisely the stage planned for this type of technical and financial adjustment,” Mbassa Ndiné said in a recent interview.

The state’s assumption of VAT costs improves the financing plan that will be presented to the World Bank, but it does not eliminate the funding gap on its own. The exact amount still to be raised will depend in particular on the scope of the tax expenses ultimately covered by the government and the decisions made during the restructuring process.

For the Douala City Council, the challenge is now to preserve enough funding to build the feeder roads and prevent budget constraints from reducing the performance of the future mass-transit system.

Ludovic Amara