Cameroon is located in Central Africa. It shares borders with Nigeria on the North and West, Congo, Equatorial Guinea, and Gabon on the South, the Central Africa Republic on the East, and Chad on the North East. It gained its independence from France on 1 January 1960. Its constitutional capital is Yaounde, Cameroon is split into 10 Administrative regions. It is a multiparty presidential republic with the President sitting as both the Head of State and government.
It runs a bicameral national assembly as the legislative arm of the government. Both French and English are the official languages. Christianity and Islam are the predominant religions along with other traditional religions. It has a mixed legal system of English common law, French civil law, and customary law. It has an area size of 0.475 million square kilometers. Bordering the Atlantic Ocean on the South West, Cameroon serves as a natural gateway into the landlocked region of Central Africa including Chad, Central African Republic, and northern Congo.
Cameroon has an estimated population of 27.7 million comprising mostly of younger population less than 25 years which makes up about 62.4 percent of the population, those in the age bracket of 25 to 64 years make up about 34.5 percent of the population and above 65 years age group makes up of about 3.1 percent of the population. The average population density is estimated at 56 inhabitants per square kilometer. In terms of human development indicators, The country has a life expectancy of 64 years for women and 60.6 years for men. It achieved universal primary education with a 103.4 percent Primary enrolment rate in 2018 and an overall literacy level of 77.1 percent as of 2018.
Broad Economic Overview of Cameroon
Cameroon has an abundance of natural resources such as bauxite ore, oil and gas, and iron. It is one of the major global producers of agricultural products such as cocoa, coffee, bananas, palm products, tobacco, rubber, cotton, maize, and cassava. Agriculture represents about 14 percent of their GDP and oil and gas about 8 percent. It has consistently achieved robust GDP growth in the past 5 years having grown 4.8 percent over the period. Fishing and forestry are two of the country’s additional significant activities as the country has high value varieties of timber. However, persistent security challenges with Boko Haram, in the far north and socio political tensions in the northwest and southwest are having an adverse impact on the economy.
Its currency is CFA Franc BEAC which is pegged to the euro and has maintained a stable inflation rate over the past years. Main export includes cocoa, lumber, cotton, coffee, crude oil etc. Major imports include fuel, foodstuffs, and consumer goods, electrical equipment, machinery etc.
Investment Opportunities in Cameroon
Cameroon’s abundant natural resources which include petroleum, gas, bauxite, iron, nickel, wood, and agricultural products such as cocoa, coffee, cotton, banana, hevea, palm oil, pineapple offer investment opportunities in the oil and gas and agricultural sectors. Specifically, the country is seeking investment in the following areas: the transformation of hydrocarbons, transformation of agricultural products, animal or halieutic, Forest exploitation assorted with the transformation of wood, Industrial and local fishing, Hospitals, and pharmaceutical laboratories, Tourism sector etc.
Impact of Foreign Direct Investment In Cameroon
According to the 2021 United Nations Center For Trade And Development World Investment Report, FDI inflows to Cameroon is traditionally low compared to the potential of its economy. FDI in Cameroon reached 488 million dollars in 2020, a sharp decline from the 1027 million dollars recorded in 2019, due to the global health and economic crisis triggered by the Covid-19 pandemic. FDI stocks are estimated to account for 9 billion dollars in 2020. Most of the FDI comes from the European Union, particularly France and Germany, and targets the mining industry, including oil extraction. However, China has become a major investor in the country, pursuing large infrastructure projects. Currently, Cameroon is among the African countries borrowing funds from the AfDB that are financed by the Fight Covid-19 social bond. Specifically, a 106 million dollars loan is financing the country’s Crisis Response Budget Support Programme, which aims to build capacity to test, manage and respond to COVID-19 by providing planning and strategic tools, as well as financial resources, to the health sector. It also aims to stabilize household income and livelihoods to safeguard food security.
In the World Bank’s 2020 Doing Business Report, Cameroon ranked on the 167th position out of 190 countries. This represents a slight decline from the 2019 edition when the country was ranked 166th. According to Doing Business, despite this ranking, the country has made improvement in giving access to credit. Cameroon improved access to credit information by establishing a framework through the Central African Economic and Monetary Community for the licensing and operation of credit bureaus.
Cameroon’s economy has the potential to become one of the most prosperous countries and among the best placed to receive foreign direct investment in Africa. While the country has many natural resources ranging from oil, forestry to fisheries as well as fertile land on which to build, it needs to improve and simplify its administration in order to boost entrepreneurship and fight against corruption. Poor infrastructure, weak rule of law, and continuing inefficiencies of a large parastatal system in key sectors impede FDI growth in Cameroon.
The country needs to attract foreign investors in order to finance its future projects of developing infrastructure and notably the exploitation of gas which is the more reasons you should consider investing in Cameroon now.
Large French companies are well placed in these developing sectors. As part of its growing interest in Africa, China has been investing steadily in Cameroon with total Chinese direct and indirect investments amounting to 2.43 billion dollars in 2016 according to the Cameroonian Ministry of Economy, which has paved way for the construction of Kribi Port and Industrial Complex and Memve’ele Hydroelectric Dam.
What to consider if you invest in Cameroon
The key strong points of the Cameroonian economy are: A long period of political stability under the regime in place, Low-cost labor, Abundant natural resources in agriculture, oil, and mining, A diversified export economy in oil, mining, agriculture, etc, Many ongoing infrastructure modernization projects supported by IMF lending Monetary stability because of its membership of the CFA Franc Zone.
Cameroon’s positive impact of the anti-corruption policy regulation on equity participation allows foreigners to own 100 percent of a company.
Government Measures to Motivate FDI
The Cameroonian government has targeted certain sectors as priority sectors for investment: transport, food industry, tourism, and rural development. In order to attract more investors, significant programs are being implemented by the public authorities, with the support of financial backers, in order to improve judicial decisions, increase energy supplies, reinforce economic information, simplify procedures, support companies, and ensure the protection of the economic area against illegal threats.
Cameroon also has free trade zones in which all export companies can be set up. The free trade zones are only for the use of companies that produce goods and provide services meant exclusively for export. There are many advantages for such companies: exemption from all licenses, authorization or quota limitation for both export and import, the possibility of being able to open a foreign currency account, no restrictions on sales operations, purchase of foreign currency, right to transfer profits abroad but 25 percent has to be re-invested in Cameroon, tax and duty exemption for a period of 10 years from the beginning of operations and taxation at a general rate of 15 percent on profits starting the 11th year.
There is freedom of starting a trade in Cameroon as a foreign investor. Foreign nationals can be 100% owners of a company.