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Justin
Asah Ayuk
Embassy of the Republic of
Cameroon in the Russian Federation
Investing in Cameroon
Expanding
opportunities for the Cameroon community is a pressing concern to the
government. With rising unemployment, falling living standards, progressive
exclusion and rising crime wave, the government has recognised their policies
and behaviour play a critical role in shaping the investment climate in the
country. There has been efforts recently to considerably improve the investment
climate in view to create jobs, create a more inclusive society, improve
outcomes for the community and foster growth.
Situated
in the Central and West Africa, bordering Nigeria to the West, Equatorial
Guinea to the South west, Gabon and Congo Brazzaville to the South, Central
African Republic to the East and Chad to the North. Cameroon is a bilingual
country with English and French as official languages. It has a coastal plain
that extends 10 to 50 miles (16 to 80 km) inland from the Gulf of
Guinea/Atlantic Ocean with a coastline of 402 km. It has a population of over
20 million inhabitants.
Cameroon
is a member of the Central African Economic and Monetary Community
(CEMAC-Communicaté Economique et Monetaire de l' Afrique Central) has a
strategic position within the sub region considering it's access to the coast
of the Atlantic and border with Nigeria which has a potential market with a
population of 200 million inhabitants.
Country statistics
|
Demography |
Population |
Growth rate |
Urbanisation |
|
20 129 878 |
2.082% |
58% |
|
|
GDP |
GDP Real growth
rate |
GDP per capita |
GDP Purchasing
power parity |
|
4.7% |
$2300 |
$50.32 billion |
Source:
www.indexmundi.com/Cameroon/demographics_profile?html (July 2012 estimates);
While
an Investment Charter (in French) was adopted in 2002 to attract foreign
investors and streamline investment procedures, it is still not fully
implemented. President Biya has postponed the deadline for implementation of
some provisions of the Investment Charter to 2014[1].
The delayed implementation of the charter has resulted in a complicated and
challenging regulatory environment in which relevant portions of the 1990
Investment Code remain in effect until the full implementation of the
Investment Charter.
Unlike
the Investment Code of 1990, the Investment Charter 2002 does not discriminate
with regard to equity ownership, it permits full foreign ownership, and
procedures for obtaining land titles have been simplified and the authority
decentralised. The US Department of State 2012 further reports that Cameroon's
legal and regulatory systems are inefficient and often arbitrarily interpreted
and enforced.
The investment 1990 code provides
14 basic guarantees to investors, including: property ownership, ability to
repatriate capital and income, prior compensation in case of expropriation,
freedom of movement within Cameroon and free egress for personnel. Firms may
qualify for one of the five special investment formulae that offer more
advantages. The five formulae are: the basic regime; the small and medium-size
enterprise regime; the strategic enterprise regime; the reinvestment regime;
and the free zone regime.
Cameroon has privatized many state companies,
which will eliminate public-sector monopolies. Except for the aluminium sector,
foreign firms cannot invest directly in ventures defined as
"strategic" by the government, but they may provide equipment and
services to the state owned enterprise that have jurisdiction over such
activity. Buyers of some privatized former state monopolies enjoy concessions
that limit the entry of competitors into the sector for specified periods.
The
government has revised exploration codes for the hydrocarbons and forestry
sectors. Cameroon's 1990 investment code establishes requirements for at least
35 percent Cameroonian equity ownership for enterprises under the small and
medium-size enterprise regime. Under the investment code, an industrial free
zone where investor can operate virtually outside of the jurisdiction of the
country's established legal and regulatory systems; there are no requirements
for technology transfer, no requirements to locate in specific geographical
areas and foreign exchange privileges are not rationed.
Investors
can transfer dividends, return of capital, interest and capital on foreign
debt, lease payments, royalties and management fees, returns on liquidation,
etc. Cameroon has a high literacy rate and offers a relatively well-educated
labour force, yet unemployment has been estimated at between 30 and 35 percent
in the two major cities of Douala and Yaoundé. There is a large surplus
of unskilled and non-technical labour. Cameroon has no foreign trade zones or
free ports but it has an industrial free zone (IFZ) regime that is applicable
to all locations through "industrial park" or
"single-factory" zones. The National Office for Industrial Free Zones
(NOFIZ) is the non-profit regulatory body established to oversee and administer
Cameroon's IFZ program. According to IMF data, foreign direct investment was
CFA franc 53 billion (US$90 million) in Cameroonian fiscal year 1996-97.
The
government of Cameroon is committed to making the nation a leading investor-
friendly destination in the Central African Sub-region and a middle income
country by 2035. In this light several key reforms have been undertaken to
attract and protect both domestic and foreign direct investment. Amongst this
reforms are:
-the Cameroon investment code;
-the Cameroon investment charter;
-the industrial free trade zone;
-the Cameroon mining code;
-the Cameroon gas code; and
-the Cameroon petroleum code.
In the
presence of gaps between firms’ preferences and those of society, differences
in priorities between firms and differences in government’s political and
economic objectives, creating an investment climate requires effort and
sacrifice from governments to balance these interests. While avoiding
situations where firms and other stakeholders tilt benefits to their advantage,
governments must address important constraints in a way that gives firms
confidence to invest, and by sustaining a process of ongoing
improvements-ongoing process of policy adjustments and fine-tuning across a
wide domain.
The
Cameroon government neglected the inclusion of a compensation package for those
who benefited from the status quo. Jailing high level officials as it has been
the case is likely not going to reduce corruption, rather it will only result
to a change in the practice. In order to achieve the expected result of
reforms, or limit variations between principles and practice the government
must review these reforms to include compensation packages for those
disadvantaged by change. These compensation packages can easily be integrated
if the government attempts to find out why its people are corrupt.
This
notwithstanding, it is necessary to create mechanisms to review new policies
and regulatory proposals more systematically in order to remain in course.
Given that all production target demand in some area, particular attention
should be paid to the domestic and regional demand. For many years the
Sub-regional financial system has remained over liquid. This over liquidity is
an indication of economic stagnation. Efforts should be made in this case to
increase consumption.
All in
all the studies on financial development and growth in the CEMAC region reveal
that the financial system is still rudimentary with a discontinuum in the
savings allocation function. Cameroon has hidden investment potentials in the
production and financial industry with. Cameroon remains a safe area for investment
in the CEMAC Sub Region, given its relative population (half of the population
of the CEMAC), conflict free and proximity to Nigeria with almost 200 million
inhabitants. However, the government needs to continue making concessions to
create a more enabling environment.
REFERENCES
www.wbg
investmentclimate.org/publications/upload/Cameroon; Accessed 30/04/13
www.indexmundi.com/Cameroon/demographics_profile?html
(July 2012 estimates); Accessed 01/052013
www.wikipedia.org/wiki/geography
_of _Cameroon; Accessed 02/02/2013
www.theodor.com/wfbcurrent/Cameroon/Cameroon_economy.html ;
Accessed on 01/05/2013
http://www.business-anti-corruption.com/country-profiles/sub-saharan-africa/cameroon/general-information. Accessed 02/05/13
http://www.business-anti-corruption.com/country-profiles/sub-saharan-africa/cameroon/;
Accessed 02/05/13
http://www.globalpropertyguide.com/Africa/Cameroon/property-rights-index/b;
Accessed 02/05/13,
https://www.osac.gov/Pages/ContentReportDetails.aspx?cid=12083; Accessed 02/05/13,
http://blog.ifm-sei.org/wp-content/uploads/2012/02/Poverty-in-Cameroon.pdf Accessed
OSAC
Crime and Safety Report, 2012 Cameroon
Justin
Asah Ayuk, 2012, Financial Development and Growth in the CEMAC zone, Lap-
Lambert Academic Publishers, Saarbrücken, Germany.