Cameroon, the Ultimate Destination for Entrepreneurs

A majority of the people living in sub-Saharan Africa are poor.  These people have little access to shelter, food, clothing, sanitation, health and basic facilities for a decent livelihood.  A stagnant per capita income, consistently low GDP, flat economic growth rates and corruption are great deterrents to entrepreneurs coming into this region.  However, sub-Saharan Africa remains a place of great potential for investors.  Global Competitiveness Report 2012 – 2013 by the World Economic Forum places Cameroon at 112^th position out of 144 countries.  With this ranking, Cameroon has moved up five places. Cameroon’s leadership, vision and targeted investments are geared towards the rebirth of its private sector and therefore the growth of the country. In the following pages I will be presenting the attractions that make Cameroon the ideal business destination in few years to come.

ACTION ATTRACTIONS

For any business to thrive there must be stability and security.  Cameroon is the only country in the Central African Region that has not experienced civil wars, and this is due to a stable democracy[1].  With over 230 ethnic groups, Cameroon has observed political and civic stability since independence in 1960.  This ensures that investments are secured and no breaks will be experienced in the business chain.  During wars and civic disturbances, workers cannot go to work, goods cannot reach the market, property are destroyed; but the stability in Cameroon has given it immunity to these ills plaguing the Central African Region.  Just recently on the 10^th of April 2013, Cameroon’s Minister of Defense completed a four day tour of the Eastern province of Cameroon that has a borderline with Central African Republic.  He met with rebels that fled the Central African Republic to seek refuge in Cameroon[2]. It is alleged that about 1024 refugees from Central African Republic have sought refuge in Cameroon[3].  This goes further to show that the Cameroonian people are hospitable and live well with their neighbours and other nationals.

For any industry to develop there must be sufficient energy supply. Cameroon is endowed with many dams and power stations – Edea, Bamendjim, Lom and Shari; and there are pet projects now that aim at increasing the power supply by over 800 MW of energy.  In 2012 alone, five major projects were launched to create new hydroelectric dams and thermal power stations: the Lom Pangar hydroelectric dam worth 220 billion frs CFA which will supply 30MW of energy; the Memve’ele hydroelectric dam worth 380 billion frs to supply 201MW; the Menkin hydroelectric dam that will supply 12MW of electrical energy; The Nachtigal dam that will supply 330 MW of energy and the Kribi gas plant with a projected energy supply of 216 MW of energy[4].  This will ensure a constant supply of energy and greatly reduce power shortages and failure

The business and entrepreneurial landscape in Cameroon is still uncharted and unexplored.  70% of the working population is engaged in agriculture and farming[5].  Industries account for only 13%, and this is mainly food processing and brewery industries.  The discovery of minerals like diamond, iron ore, gold, alluminium and copper present a great business arena for entrepreneurs with initiative.  Extractive and subsidiary industries can grow along these lines.

Table 1: Exports from Cameroon (Q: quantity in thousands of tones; V: value in billions)

Description	2010	2011	Jan – July 2011	Jan – July 2012	Variation (in %)
(a)	(b)	(a)	(b)	b/a
Q	V	Q	V	Q	V	Q	V	Q	V
Fresh banana	237.9	40.5	237.3	41.8	118.6	20.7	114.5	18.4	-3.5	-10.8
Arabica coffee	3.1	4.3	2.4	5.8	1.7	4.0	3.9	7.3	133.0	82.4
Robusta coffee	44.8	28.4	28.4	28.3	20.6	21.0	21.0	19.3	1.7	-8.1
Palm oil	4.1	3.6	5.2	4.9	1.9	1.8	1.9	1.9	-2.4	5.0
Raw cocoa beans	193.9	301.4	190.2	241.6	57.5	84.0	49.8	52.2	-13.4	-37.9
Cocoa paste	9.6	19.8	12.9	23.2	6.7	12.6	7.4	12.1	11.8	-3.8
Cocoa butter	9.7	20.3	7.8	14.4	4.1	7.8	3.3	5.2	-19.7	-33.7
Cement	74.2	7.2	52.2	5.0	32.7	3.1	6.8	0.7	-79.2	-77.7
Crude petroleum oils	2987.6	698.4	2809.7	799.1	1238.6	332.6	1694.0	606.9	36.8	82.5
Fuels and lubricants	798.3	247.3	870.0	345.9	324.8	131.6	90.8	46.3	-72.1	-64.8
Bar soap	26.2	15.5	30.2	17.3	14.8	8.5	8.8	10.6	-40.5	24.5
Raw rubber	38.3	47.2	36.5	61.9	14.5	27.1	13.9	22.7	-3.7	-16.3
Timber and products	946.4	221.5	963.5	229.9	496.8	114.4	481.7	116.4	-3.0	1.8
Unprocessed timber logs	612.3	71.2	574.6	66.8	0.3	36.7	0.3	31.8	-14.4	-13.2
Sawn timber	493.2	123.0	530.9	135.9	0.3	63.5	0.3	72.6	11.8	14.3
Plywood	21.3	20.6	24.7	20.8	12.5	10.9	12.6	9.0	1.1	-17.0
Unginned cotton	53.6	40.1	55.8	53.7	46.4	40.5	62.2	60.6	34.0	49.6
Unwrought aluminium	47.0	48.4	41.5	44.5	16.6	19.0	12.2	11.4	-26.2	-40.2
Total exports excluding oil		1225.9		1372.4		589.1		560.2		-14.1
Grand total of exports		1924.2		2171.5		921.7		1113.1		20.8

Source: Ministry of Finance/Directorate General of Customs/ Directorate of Economic Affairs

Table 2: import trends: (Q: quantity in thousands of tonnes; V: value in billions)

Description	2010	2011	1st half  2011	1st half 2012	Variation (in %)
(a)	(b)	(a)	(b)	b/a
Q	V	Q	V	Q	V	Q	V	Q	V
Animals, animal products	183.4	118.2	232.4	178.9	136.4	102.8	118.2	90.4	183.4	118.2
Frozen sea fish	166.0	93.0	212.2	148.0	125.3	85.8	107.4	73.5	166.0	93.0
Plant products	888.7	209.2	1054.6	270.8	533.2	138.9	567.9	141.6	888.7	209.2
Cereals	766.5	161.4	941.5	222.9	480.4	117.4	510.3	116.3	766.5	161.4
Rice	366.5	96.7	507.4	135.0	283.5	76.2	236.6	65.8	366.5	96.7
Mill grain products; malt	109.3	38.7	98.6	36.2	46.8	16.4	52.3	19.9	109.3	38.7
Industrial food products	203.4	111.7	262.1	148.5	100.8	63.6	118.3	72.5	203.4	111.7
Mineral products	3410.5	735.9	3399.9	912.2	1732.5	471.2	1299.9	277.4	3410.5	735.9
Clinkers	714.1	37.1	582.7	30.9	267.4	14.2	372.1	20.6	714.1	37.1
Hydrocarbons	2097.0	662.5	2025.0	836.0	1081.3	434.3	478.9	233.2	2097.0	662.5
Crude petroleum oils	1702.1	513.2	1863.7	764.4	1004.8	399.2	172.6	81.2	1702.1	513.2
Fuels and lubricants	266.5	110.5	56.9	28.2	27.6	16.4	242.9	118.3	266.5	110.5
Chemical industry products	442.5	249.5	503.0	315.2	246.5	149.3	173.0	133.8	442.5	249.5
Inorganic chemical products	245.1	44.5	260.0	55.2	131.0	26.0	77.0	19.9	245.1	44.5
Fertilizers	122.2	26.9	152.1	39.0	71.0	16.4	50.7	12.4	122.2	26.9
Plastic materials and rubber	94.2	99.8	92.3	108.1	45.1	50.7	49.2	56.6	94.2	99.8
Textile materials and products	85.5	68.2	110.6	98.3	47.7	40.9	49.7	38.4	94.2	99.8
Second hand clothing	61.0	32.7	73.8	36.6	33.8	16.8	35.9	17.8	61.0	32.7
Stone products, cement and glass	139.6	29.2	165.4	34.8	72.5	15.0	88.3	18.4	139.6	29.2
Ceramic products	107.7	19.0	130.9	23.4	55.5	10.0	73.6	13.2	107.7	19.0
Base metal and articles	218.5	147.8	228.8	183.2	105.5	82.6	121.8	98.2	218.5	147.8
Cast iron and steel products	132.6	47.5	123.1	50.7	59.2	23.7	75.9	32.3	132.6	47.5
Mechanical machines and apparatus	58.2	216.6	160.1	269.2	32.7	130.8	36.2	139.1	58.2	216.6
Electrical machines and apparatus	37.3	134.2	42.7	201.3	18.5	67.0	23.3	105.6	37.3	134.2
Transport equipment	114.3	220.0	166.7	312.3	73.4	137.1	57.6	108.6	114.3	220.0
Motor vehicles; tractors	99.4	192.1	112.8	216.7	56.6	108.6	54.2	103.4	99.4	192.1
Grand total imports		2503.0		3209.8		1528.0		1362.8		2503.0
Total imports including non-oil imports		1989.7		2445.3		1128.8		1281.6		1989.7

Source: Ministry of Finance/Directorate General of Customs/ Directorate of Economic Affairs

From tables 1 and 2, it is obvious that Cameroon exports mostly raw materials and import manufactured goods.  It will be highly profitable for a business man to open a manufacturing industry in Cameroon.  Some entrepreneurs are already eying these opportunities.  Gregory Campbell the Chief Executive of the American company Rainmaker was in Yaounde on April 23, 2013 to discuss with Cameroon’s PM opportunities for setting up industries in the health care, education and technology sectors[6].  Wheatley US Constructions Ltd Consulting was interested in agriculture, security and intelligence technologies.

There is a ready market for the products.  Cameroon’s twenty million inhabitants are a great attraction for any developer.  There is a great domestic demand, which has greatly influenced economic growth (6.1% envisaged in 2013 as compared to 5% in 2012)[7].  Being at the heart of Africa, Cameroon’s location is also a great pull factor.  The country shares boundaries with six other African states: Chad to the north, Nigeria to North West, Central African Republic to the East, Gabon, Equatorial Guinea and Congo to the South.  By ratifying the Convention of 25 June 1999, Cameroon became a member of the CEMAC (Economic and Monetary Cooperation of Central African States).  Goods and services are sold freely within this region.  The CEMAC countries have common trade and tariff laws. Any entrepreneur will therefore enjoy the demand of the 36 million inhabitants of the CEMAC region.

The ease of starting a business in Cameroon has been greatly facilitated.  The cost of setting up a business has been reduced by 22.2% in 2012 as compared to 2011; and the time taken to open a business has come down to two days[8].  This has been facilitated by the fact that all the financial institutions (Finance control, Treasury, Taxation, National Social Insurance Fund) involved in the creation chain are all lodged in the same building.   A total of 4406 small and medium sized enterprises were created between April 2010 and November 2011[9].  Also encouraging is the fact that businesses can be registered online and transactions followed up.

Banking mobility and protection of investors is guaranteed and constantly being improved upon.  A minimum guarantee service has been set up that requires banks to offer fifteen previously paid services free of charge[10].  Also, with the introduction of the single treasury account, two networks have been set up to facilitate credit transfer.  The SYSTAC (Remote Clearing System in Central Africa) processes operations with values less than 100 million F CFA and the SYGMA (Automated Big Amounts System) deals with operations above 100 million F CFA.  These networks have greatly reduced the time of transfer of credits.  With the presence of thirteen banking institutions and a plethora of Microfinance institutions, access to loans has been facilitated.  In 2011, 68,4% of loans were granted to private companies by banks, while loans to small and medium size enterprises provided by microfinance institutions increased by 16.6% from 2010 to 2011[11].  The loan schemes and payment schedule are very favorable. The presence of collateral security, interest rates, sureties are becoming more and more favorable.  By becoming a member of OHADA (Organisation for the Harmonisation of Business Law in Africa) and COBAC (Banking Commission of Central Africa), Cameroon has made strides to reduce costs and risks of credits[12].  This has greatly increased stability of banking operations and given trust to bank operators and business men.

Cameroon’s tax schemes have been modified to make it more conducive for business.  The tax regimes have been reduced from four to three[13].  These tax schemes are based on the turnover of the corperation. Within this reform, tax payers with a turnover of less than fifty million FCFA (simplified and discharge tax systems) shall no longer pay VAT (value added tax) which stood at 19.25%[14].  Also, Certified Accounting Centres have been opened that help small and medium sized enterprises as consultants in taxation and book keeping operations.  This has made them more competitive.  Taxes can also be paid faster by bank transfer or cheque thanks to the introduction of the single treasury account. Moreover, social insurance payments can be declared and followed up online.

Custom reforms have also improved on the business attractiveness of the country. With the putting in place of software like ASYCUDA ++, NEXUS, ASYCUDA WORLD, TOS OSCAR, e-GUCE, FASTRAC, considerable improvements have been made in customs procedures.  Processing time of customs declarations has been reduced.  For example clearing at the Douala port has been reduced from above 20 days to one day; transit time at borders has also been reduced.  Consignments can be tracked and followed up electronically by GPS[15].  Also, custom duty on importation of some goods like pharmaceuticals, text books, and a few other commodities has been cancelled.

Any good business will develop around a good transport network.  With its three international airports (Yaounde, Douala and Garoua) and a rich network of roads and rails, transport of goods is assured.  And the state is committed to do more.  Cameroon has embarked on major construction projects like the Kribi deep sea port for which phase one only costs about 244 billion FCFA with an envisaged port traffic of about 50 million tonnes per year[16].  There is also the construction of a second bridge over River Wouri that will cost the Cameroon government a total of 105 billion FCFA.  It is worthy of note that the Wouri bridge is the gateway from the Douala industrial city to three regions of the country – the West, North West and South West Regions.  The new Yaounde – Douala road project has been projected at a sum of 500 billion FCFA  Also, rehabilitation of other inter urban road networks preoccupies the Cameroon government.  Also worthy of noting is the Bamenda – Ekok road that will link West Cameroon to Nigeria; the Yaounde – Kribi road; the Garoua – Ngaoundere road; and many more.  All these go to make the business environment more favourable to prospective investors.

The telecommunication system in Cameroon is growing especially with the introduction of optical fibres.  Cameroon is now covered with four major telephone network companies and internet providers: Camtel, Orange, MTN and Setmobile. This helps to improve business environment by ensuring that information transfer is rapid and firms can make fast decisions in response to changes in the business arena.

Any investor would not worry about the labour because it is readily available, both skilled and unskilled.  Cameroon possesses eight state universities, a host of professional institutions and many private institutions of higher learning.  It is therefore rich with professionals in nearly all fields of work especially in those that are geared towards wealth production like engineers, accountants, agronomists, managers, and the like.

Whether you come to Cameroon as a major investor, a small and medium sized enterprise or a dealer in imports and exports, you are part of an inspiring and deeply rewarding business enterprise.

BIBLIOGRAPHY

BOOKS

African Development Bank, Oct 2009:  Country Strategy Paper 2010 – 2014, Cameroon

Eric Kacou, Dec 2012: Entrepreneurial Solutions for prosperity in BoP Markets, Strategies for Business and Economic Reforms; Wharton School Publishing

IMF, April 2013; World Economic Outlook April 2013: Hopes, Realities, Risks        www.imf.org

Klaus Schwab, 2012: The Global Competitiveness Report 2012 -2012; World Economic Forum www.eforum.org/gcr

Ministry of Economy, Planning and Regional Development: Cameroon Vision 2035, Working Document, February 2009

Ministry of Economy, Planning and Regional Development: Growth and Employment Strategy Paper – Reference Framework for Government Action over the period 2010 -2020

Ministry of Finance: Les dossiers du MINFI, 2012

Ministry of Finance: Proceedings of the Annual Conference of MINFI Central and Devolved Services, 2012 Edition, January 2013

Ministry of Finance: Reports on the Financial Situation 2012 and Prospects for the Nation 2013 Financial Year, January 2013

World Bank, 2012; Doing Business: World Economic Profile Cameroon.  www.worldbank.org

ARTICLES

Nico Halle & Co Law Firm; Investment Incentives in Cameroon            www.hallelaw.com

The Cameroon Business Forum Program: Dialogue for Better Business in Cameroon, 2011.  www.wbginvestmentclimate.org

USAID Country Profile: Property Rights and Resource Governance, Cameroon, 2009.  www.usaidlandtenure.net/Cameroon

NEWS ITEMS

Cameroon Tribune, April 12, 2013

Cameroon Tribune, April 19, 2013

Cameroon Tribune, April 23, 2013

LEGISLATION AND OTHER JUDICIAL DECISIONS

2012 Finance Law

2013 Finance Law

Circular N^o 002/MINFI of 8^th February 2012

Decree N^o 76/165 of 27^th April 1976 Setting down conditions for obtaining land title

Decree N^o 2005/281 of 16^th December 2005, amendment of Decree N^o 76/165 of 27^th April 1976

Law N^o 2007/006 of 26^th December 2007 on the Financial Regime of the State

Philemon Yang, PM Cameroon, Nov 26^th 2012; Government’s Economic, Financial, Social and Cultural Program for the year 2013

The General Tax Code, 2011 Edition; Ministry of Finance, Directorate of Taxes

Web pages

Active Spaces      http://congress2012.cpsociety.org/business-creation-expansion-and-entrepreneurship

Cameroon Radio Television Corporation CRTV               www.crtv.cm/cont/nouvelles

Start up procedures to register a business                      www.tradingeconomics.com/cameroon

UN High Commissioner for Refugees                                 www.refworld.org/docid/516e64184.html

Index Mundi                                                                               www.indexmundi.com

Association of Cameroonians in Goteborg                      www.assocaborg.org/cameroon/investment