Efforts to combat COVID-19 and measures to cushion the impact of the pandemic on the economy were the focal point of 2020. The economy dipped into recession in 2020, but the International Monetary Fund (IMF) forecast a rebound in 2021, with growth forecast to reach 3.4 percent. Development projects, especially in road infrastructure, transport, energy, and health experienced severe and costly delays, but are on course to be completed. Cameroon also hosted the international African Nations Championship soccer tournament at the beginning of 2021, which likely resulted in a rise in COVID-19 cases and whose economic impact was dubious.
As a member of the Central African Economic and Monetary Community (CEMAC), Cameroon is committed to regional fiscal discipline, while complying with the monetary policies and regulations of the regional central bank. Cameroon serves as a key link between West and Central Africa and neighbor to Nigeria, Africa’s largest economy. With this strategic geographical position, the country could benefit from the African Continental Free Trade Area (AfCFTA). In 2020, Cameroon adopted a new national development strategy plan and a new budget, which attempted to control borrowing, modernize public finances, and maintain incentives to attract foreign investors. Although the mobilization of the national private sector and international investors is one of the pillars of the new national development strategy, the government has not outlined clear steps on how it will achieve these goals.
Cameroon has strong competitive advantages through its location as a gateway to the region. It offers immense investment potential in infrastructure, extractive industries, consumer market and modern communication technology (for example, internet broadband, fiber optic cable, and data centers). However, Cameroon’s telecommunication infrastructure is overutilized and in need of upgrades, which often results in network outages. Agricultural processing and transport infrastructure, such as seaports, airports, and rail, need investments, especially for modernization and maintenance. More investment opportunities exist in the financial sector as only 15 percent of Cameroonians have access to formal banking services. However, to draw benefits from these natural advantages and achieve its ambition to become an emerging economy by 2035, the country must improve governance and profoundly reform its inefficient civil service.
|TI Corruption Perceptions Index||2020||149 of 180||http://www.transparency.org/research/cpi/overview|
|World Bank’s Doing Business Report||2020||167 of 190||http://www.doingbusiness.org/en/rankings|
|Global Innovation Index||2020||119 of 131||https://www.globalinnovationindex.org/analysis-indicator|
|U.S. FDI in partner country ($M USD, historical stock positions)||2019||USD (-2) mil||https://apps.bea.gov/international/factsheet/|
|World Bank GNI per capita||2020||USD 1.490||http://data.worldbank.org/indicator/NY.GNP.PCAP.CD
1. Openness To, and Restrictions Upon, Foreign Investment
Policies Towards Foreign Direct Investment
Creating a conducive business environment to attract foreign direct investments is a corner stone of Cameroon’s development strategy. Governance and strategic management of the state constitutes one of the four pillars of the National Development Strategy 2030 (NDS 30), which was launched on November 16, 2020. The government of Cameroon acknowledges that the challenging nature of the domestic business climate remains a concern. To fight corruption, rebuild a weak legal system, and modernize an inefficient public service, the NDS 30 has adopted a holistic approach to governance, which includes political and institutional governance, administrative governance, economic and financial governance, regional governance, and social and cultural governance.
Cameroon has put in place an arsenal of institutions and laws to improve governance. The country has prevention programs and has reinforced the powers of the judiciary through the creation of the Special Crime Tribunal on corruption and economic crimes. This special tribunal, which began activities on December 14, 2012, is empowered to trial perpetrators of economic crimes amounting to at least $100,000. The court specifically targets custodians of public funds as well as officials who have the prerogatives to collect or spend money on behalf of the state. Since its creation, the tribunal has tried 225 cases and recovered $323 million. However, corruption and administrative mismanagement continue to hamper the business climate in Cameroon. Cameroon consistently ranks at the bottom of the World Bank’s Ease of Doing Business index and Transparency International’s Corruption Perceptions Index. In 2020, Cameroon ranked 167 of 190 on the Ease of Doing Business index and 149 of 180 on the Corruption Perceptions Index.
Despite the active presence of state-owned companies in important sectors of the economy, private entities – both domestic and foreign – can create and own businesses that engage in all forms of legal remunerative activities. They can also enter joint ventures and public-private partnerships with the government. There are no general economy-wide (statutory, de facto, or otherwise) limits on foreign ownership or control. Cameroon has no laws or regulations that prescribe outright prohibition on investment, equity caps, mandatory domestic joint venture partners, licensing restrictions, or mandatory intellectual property (IP)/technology transfer requirements. Cameroon has a screening process, which is applicable to all domestic and foreign investments. This screening process ensures that investors have legitimate registered businesses and are able to meet criteria, such as employment creation and export quantities, to qualify for private investment incentives.
The Cameroon Investment Promotion Agency (CIPA) was created in 2010. To date, the CIPA has signed 172 investment agreements and generated the creation of over 60,000 jobs. CIPA’S mission, in collaboration with other state institutions and private bodies, is to contribute to the development and implementation of government policy in the field of investment promotion. The agency seeks also to foster an enabling environment for investments in Cameroon.
The investment incentives offered by CIPA cover existing and emerging economic sectors. The agency also serves as a one-stop-shop facilitator through the assistance it provides to foreign and domestic investors. It processes application files for approval in compliance with its investment charter and assists in the alignment of projects with the general tax code. It can support potential foreign investors for visas applications. The agency also follows up to monitor the implementation of commitments made by approved companies.
CIPA’s sector coverage
Sources: National Institute of Statistics, IMF, Internal estimates 2019-2020
The government maintains dialogue with business associations such as the Groupement Inter-Patronal du Cameroun (GICAM) and Enterprise Cameroon through the Cameroon Business Forum, which is sponsored by the World Bank. Over the past year, GICAM has been critical of the government handling of the negative impact of COVID-19 on business.
Limits on Foreign Control and Right to Private Ownership and Establishment
There are no general economy-wide (statutory, de facto, or otherwise) limits on foreign ownership or control. Apart from national defense and security areas, there are no sector-specific restrictions, limitations, or requirements applied to foreign ownership and control. Despite an active government presence in most sectors of the economy, private entities – both domestic and foreign – can create and own businesses that engage in all forms of legal remunerative activities. They can also enter joint ventures and public-private partnerships with the government.
Cameroon has no laws or regulations that prescribe outright prohibition on investment, equity caps, mandatory domestic joint venture partners, licensing restrictions, or mandatory intellectual property/technology transfer requirements. Cameroon has a screening process, which is applicable to all domestic and foreign investments. This screening process ensures that investors meet the criteria, such as employment and export quantities, to qualify for private investment incentives.
Other Investment Policy Reviews
On June 22, 2020, the Minister of Economy and Regional Planning (MINEPAT) announced an economic stimulus package to counter the negative economic and social impacts of the COVID –19 pandemic. With a total expected budget of $798 million, the package planned to allocate funds to five areas, which include strengthening the health system ($97.3 million), supporting economic and financial resilience ($625 million), and maintaining strategic suppliers of essential goods ($9.1 million). In addition to these financial measures, the government introduced a set of temporary tax rebates, incentives, moratoria, and deferred payments for private companies. Cameroon has also benefitted from regional measures introduced by the regional central bank, Banque des Etats de l’Afrique Centrale (BEAC). Throughout 2020, BEAC maintained low interest rates, increased liquidity provisions, and widened the range of private financial instruments accepted as collateral for monetary policy operations.
The pandemic emerged as Cameroon prepared to close a three-year Extended Credit Facility agreement with the International Monetary Fund (IMF), which it signed in June 2017. The program included structural reforms to accelerate and consolidate growth and control spending. Under the terms of the agreement, the IMF has conducted five policy reviews outlined below. Copies of the reviews can be found on the IMF website.
- First Review (January 2018)
- Second Review (July 2018)
- Third Review (December 2018)
- Fourth Review (July 24, 2019)
- Fifth Review (February 14, 2020)
The evaluation and closure of the program has been disrupted by the eruption of COVID-19. But on January 22, 2021, IMF said the economic shock associated with the COVID-19 pandemic was set to have long-lasting effects on the economic outlook for the Central African Economic and Monetary Community (CEMAC). The IMF indicated that the CEMAC economic outlook is highly uncertain and contingent on the evolution of the pandemic and its impact on oil prices. Before COVID-19, IMF expressed satisfaction with the progress of the implementation of reforms, while urging the country to implement stronger measures on budget transparency and improvement of the business climate.
Sources: Cameroon Ministry of Finance and IMF
The IMF estimates that the economic shock associated with the COVID-19 pandemic is set to have long-lasting effects on the economic outlook for Cameroon and other CEMAC members. The IMF has granted financial resources to individual countries in the region to fight the pandemic. This emergency financial support has contained the initial economic fallout. Uncertainties remain in the long-term impact, especially in the context of stagnating oil prices. The IMF outlook projects that CEMAC’s fiscal and external adjustments will be slower than previously envisaged, entailing large external financing needs (around $7.7 billion for 2021–23). The IMF concludes that the outlook is highly uncertain and contingent on the evolution of the pandemic and its impact on oil prices.
Entrepreneurs obtain a unique tax identifying number when they open a company in Cameroon. This taxpayer’s identification number, known as the single identification number, is attributed to the business owners immediately when they start the registration procedure of their business. Any entity or sole proprietor starting a business in Cameroon is attributed this single identification number by the Directorate General of Taxation. The number is attributed on a permanent basis upon effective localization of the taxpayer and only after the taxpayer has filed an application to register the business with the competent tax authority within 15 working days following the commencement of activities.
According to the World Bank, it takes 14 procedures and 82 days to establish a foreign-owned limited liability company in Douala, Cameroon’s largest city and economic capital. This process is lengthier and more complex than regional and global averages. For foreign investors, a declaration of foreign investment to the Ministry of Finance is mandatory 30 days prior to the beginning operations. In addition, if the company wants to engage in international trade, registration in the importers’ file is required to obtain an automated customs systems number (Système Douanier Automatisé, or “sydonia”). This number facilitates the entry and exit of goods produced by the company. The authentication of the parent company’s documentation abroad is required only to establish a subsidiary. Foreign-owned resident companies that wish to maintain foreign currency bank accounts must obtain prior approval. The Minister of Finance issues such authorization, which is subject to approval from the Bank of Central African States (BEAC) as per Section 24 of the exchange control regulations. This approval takes on average 38 days to obtain. There is a minimum paid-in capital requirement of CFA 1,000,000 (~USD 1,800) for establishing LLCs.
In Cameroon, business registration remains manual after the failure of a registration portal launched by the Ministry of Small and Medium-Sized Enterprises that was supposed to automate the process. To register, entrepreneurs must go to one of the regional centers for the creation of enterprises, which can complete the registration procedure within one week.
The Cameroonian government does not promote or incentivize outward investment, nor does it restrict domestic investors from investing abroad.
2. Bilateral Investment Agreements and Taxation Treaties
Cameroon has Bilateral Investment Treaties or Free Trade Agreements with the following countries:
- Belgium-Luxemburg: convention between the Union Belgo-Luxembourg Union for the Reciprocal Promotion and Protection of Investments (1980)
- Canada: Investment Promotion and Protection Agreement (2014)
- China: Bilateral Investment Treaty Agreement (1997)
- Egypt: Memorandum of Understanding with the General Authority for Investment
- Germany: Treaty between the Federal Republic of Germany and the Federal Republic of Cameroon concerning the encouragement of investments (1962)
- Guinea: Mutual Discussions and Framework Agreement
- Italy: Economic, Technical, and Financial Development Cooperation Agreement between the Government of the Republic of Italy and the Government of the Republic of Cameroon (1989)
- Mali: Cultural Agreement and Commercial Agreement (1964)
- Mauritania: Framework Agreement for General Bilateral Cooperation following recognition After Independence
- Mauritius: Framework Agreement for General Bilateral Cooperation following recognition after independence
- Morocco: Economic and Technical Cooperation Agreement (1974)
- Netherlands: Agreement (1967)
- Romania: Agreement between the Government of the Socialist Republic of Romania and the Government of the Republic of Cameroon on the mutual promotion and protection of investments (1980)
- Switzerland: Cameroon-Switzerland Bilateral Investment Treaty (1964)
- Turkey: Cultural and Scientific Cooperation Agreement (2002), Trade, Economic and Technical Cooperation Agreement (2002), Joint Economic Commission Protocol (2003)
- United Kingdom: Agreement between Great Britain and the Government of the Republic of Cameroon for the promotion and protection of investments (1982). UK and Cameroon signed a new Economic Partnership Agreement on March 09, 2021.
- United States of America: Bilateral Investment Treaty (1986)
- On December 1, 2020, Cameroon became the 33rd country to ratify the African Continental Free Trade Area agreement.
Cameroon does not have a Bilateral Tax Treaty with the United States; it has tax treaties with Canada, France, Morocco, South Africa, Tunisia, United Arab Emirates, and other members of CEMAC (Gabon, Equatorial Guinea, Congo, Chad, and Central African Republic).
The latest finance law, passed in December 2020, is the main new legal instrument to have been published in the past year. It contains new taxes and a few exonerations for specific sectors, for example, for the import of aquaculture equipment. The main innovations are the prohibition of the payment of taxes and duties in cash, which is replaced by electronic and digital electronic payment, or payment by bank transfer. Second, the government maintains and increases advantages granted to companies located in the Northwest, Southwest, and Far North Regions. Full implementation of these measures began on February 2021. During the first quarter of 2021, the government extended tax declaration deadlines to companies to cushion the impact of COVID-19 as part of its economic relief measures.
The new 2021 finance law can be found here .
Tax disputes tend to emerge from penalties imposed by the Taxation Directorate. In case of suspected wrongdoing, for example, late filing or payment, interest on the amount due may be imposed at 1.5 percent of the tax due per month. Regarding the monthly payments of taxes, late declarations are subject to a penalty of 10 percent per month, which shall not exceed 30 percent. Penalties are calculated as follows: 30 percent (if there is evidence of force majeure which prevented the payment in time or “good faith”), 100 percent (if there is evidence of deliberated delays not ascribed to force majeure or “bad faith”) and 150 percent (fraud). Where a taxpayer initiates the process to settle outstanding taxes, no penalties will be assessed. In case of dispute, the taxation director generally requires the payment of penalties upfront. But it takes years to recover these payments even when the company eventually wins the case.
3. Legal Regime
Transparency of the Regulatory System
Cameroon laws are consistent with international business and legal norms. Cameroon legal architecture is made of national, regional (CEMAC), and supra-national regulations, most of which are applicable to domestic and foreign businesses. Weak implementation and investigating capacity, a lack of understanding of international business practices, and corruption in the judiciary limit the effectiveness of the rule of law. In many circumstances, judicial loopholes persist, leading to arbitrary interpretations of the texts.
Some government ministries, though not all, consult with public and private sector organizations through targeted outreach to stakeholders, such as business associations or other groups. There is no formal process for such consultations. Ministries do not report the results of consultations, but there is no evidence that such processes disadvantage U.S. or other foreign investors.
Cameroon’s National Assembly and Senate pass laws. The Executive proposes bills and then executes laws. Though there is technically a separation of powers, the Presidency is the supreme rule-making and regulatory authority. Decentralized institutions in the regions and municipalities have little additional regulatory authority. Draft bills and regulations are not made available for public comment. The website for the Office of the Prime Minister (www.spm.gov.cm) contains PDF versions of most new regulatory actions published in the Cameroon Tribune, the country’s newspaper of record.
Ministries and regulatory agencies do not have a list of anticipated regulatory changes or proposals intended to be adopted/implemented within a specified period. Ministries do not have a legal obligation to publish the text of proposed regulations before their enactment. There is no period set by law for the text of the proposed regulations to be publicly available. There is no specialized government body tasked with reviewing and monitoring regulatory impact assessments conducted by other individual agencies or government bodies.
Cameroon has administrative courts that specialize in the application and enforcement of public laws. From a strictly legal perspective, the Supreme Court has oversight on enforcement mechanisms, but a lack of separation of powers prevents the judiciary from carrying out its responsibilities. There have been no new regulatory or enforcement reforms announced since the 2020 Investment Climate Statement.
Cameroon does not meet the minimum standards of fiscal transparency. This is partly because many of the state-owned enterprises do not have public accounts. But companies that are listed or aspire to be listed on the Central African Stock Exchange (CASE) have more stringent transparency requirements. There are only four publicly listed companies on the CASE. All four use the Organization for the Harmonization of Business Law in Africa (OHADA) accounting system, which does not align completely with International Financial Reporting Standards (IFRS) or Generally Accepted Accounting Principles (GAAP) standards. Cameroon is a member of CEMAC and is thus subject to its regulations, though implementation remains weak. CEMAC’s central bank, BEAC, controls monetary policy and is the de facto finance sector regulator, in coordination with the Ministry of Finance.
The National Institute of Statistics (INS) conducts surveys and produces statistics, which are meant to inform policy decisions. Some of these statistics are cited in government documents when ministries are drafting legislative proposals or during parliamentary debates. Quantitative analysis conducted by the INS have often been used by multilateral lenders such as the IMF, the World Bank, and the African Development Bank. However, empirical evaluation and data-driven assessments of the impact of new and existing regulations are limited. Similarly, public comments are not the main drivers of regulations. However, some consultations take place for the national budget, which is produced each year, but there is little oversight to ensure adherence to the document. The framework of the IMF’s 2017 Extended Credit Facility has induced the publication of more information on public debt by the Debt Management Office (better known by its French acronym CAA).
International Regulatory Considerations
Cameroon is a CEMAC member. CEMAC regulations supersede those of individual members, though areas such as the free movement of people, goods, and services are not respected by some states. Recent reforms by CEMAC’s central bank, BEAC, have met stiff resistance and delays in their application by individual member states, including Cameroon.
The government requires use of OHADA accounting standards, which is used by 14 African nations. No other norms or standards are referenced in the country’s regulatory system.
Cameroon joined the World Trade Organization (WTO) on December 13, 1995 and was previously a member of the General Agreement on Taxes and Tariffs. On March 11, 2019, Cameroon was suspended from the WTO for failure to meet its designated 180 million CFA (USD 308,000) contribution to the organization. The government of Cameroon is expected to notify all draft technical regulations to the WTO Committee on Technical Barriers to Trade (TBT).
Legal System and Judicial Independence
The Cameroonian legal system is a legacy of French, German (Codified Laws), English (Common law), and domestic national customs, which varies for each ethnic group. The government wants to harmonize these different legal traditions to equip Cameroon with laws that are applicable across the country and to reduce the need to navigate different legal opinions. This project, however, is being met with stiff resistance from English-speaking lawyers, who believe that the initiative will undermine the English system to which they are accustomed.
In terms of standards, Cameroon’s commercial legal system follows the OHADA rules, which are supposed to be aligned with International Financial Reporting Standards (IFRS). Enforcement is weak partly because of lack of capacity. Cameroon does not train enough specialized judges in the commercial and economic fields. Consequently, poor enforcement of laws and accounting standards tends to create confusion for foreign investors. Despite efforts to align OHADA standards to international norms, government accounting regulations remain obsolete in the context of rapid developments in international finance and capital markets. To circumvent the problem, U.S. enterprises and investors often maintain two sets of accounting records, one in accordance with U.S. Generally Accepted Accounting Principles (GAAP) or suitable international standards, and another set to address the OHADA standards and government reporting requirements.
The judicial system is not independent of the executive branch. The executive regularly interferes in judiciary matters. The current judicial process is not procedurally competent, fair, or reliable. Endemic corruption, lack of funding, and political considerations makes the courts unable to function as independent arbiters of disputes.
Arbitration is becoming the solution of choice to solve business disputes in Cameroon. Arbitration is in the OHADA corporate law. Since OHADA is a supra-national law, Cameroon is bound by its decisions. In OHADA, regulations and enforcement actions are appealable, and they can also be adjudicated in the national court system. Due to the court’s lack of objectivity, few businesses attempt to appeal unfavorable rulings.
Laws and Regulations on Foreign Direct Investment
Foreign direct investments are governed by Law No. 2013/004 of 18 April 2013, which defines incentives for private investment in Cameroon, while proposing generic and special incentives and affirming the government’s responsibilities towards private investors. The law remains valid for domestic and foreign investors. Additional laws and regulations that refer to specific economic sectors are available on the website of the Ministry of Finance (http://www.minfi.gov.cm/index.php/en/documents ).
The 2021 finance law is the main new legal instrument to have been published in the past year. The new finance law has created new taxes, while maintaining some existing exonerations, notably on value-added taxes and life insurance savings. Full implementation started on February 2021. The Cameroon Investment Promotion Agency maintains a list of relevant laws, rules, procedures, and reporting requirements for investors ( https://investincameroon.net/en/ ).
Competition and Antitrust Laws
The National Competition Commission handles anti-competition and anti-trust disputes. In some cases, the regulator of a specific economic sector can play the anti-trust role. State-owned companies tend to have quasi-monopoly or monopsony status in their markets.
Expropriation and Compensation
Decree N°.85-9 of 4 July 1985 and the subsequent implementation of Decree N°.87-1872 of 16 December 1987 outline the procedure governing expropriation for public purposes and conditions for compensation. Some of the provisions of these legal texts were repealed by Instruction n°005/I/Y.25/MINDAF/D220 of 29 December 2005. Essentially, for the public interest the state may expropriate privately-owned land. The laws also explain the formalities to be observed within the context of the procedure, both at the central and local levels.
In recent years, the government of Cameroon has expropriated in the context of the construction of large infrastructure projects, such as roads and hydroelectric dams. The government has a compensation process in place to meet the losses of those affected by such decisions.
Despite weakness in the actual implementation and execution of laws on the ground, compensation after expropriation generally follows a due process. There are no cases of indirect expropriation, confiscatory tax regimes, or regulatory actions that deprive investors of substantial economic benefits from their investments. However, serious allegations of corruption have plagued compensation procedures over the last decade. These incidents, often carried out by civil servants, have undermined trust in the process.
ICSID Convention and New York Convention
Cameroon ratified the “International Centre for Settlement of Investment Disputes” (ICSID) Convention on January 3, 1967 and the New York Convention on February 19, 1988. There is no specific domestic legislation providing for enforcement under the 1958 New York Convention and for the enforcement of awards under the ICSID Convention.
Investor-State Dispute Settlement
The OHADA-signatory nations adopted a uniform act on arbitration (the Uniform Act) on March 11, 1999. The Uniform Act sets out the basic rules applicable to any arbitration, where the seat of arbitration is in an OHADA member state. The Uniform Act is based on the United Nations Commission on International Trade Law (UNCITRAL) model law. It supersedes the national laws on arbitration of the OHADA states. Cameroon’s arbitration law is contained in its code of civil and commercial procedure in the third volume, Articles 576 to 601.
Cameroon has a Bilateral Investment Treaty (BIT) with the United States. There have been no claims against the BIT since it came into force in 1989. While there have been disputes between Cameroonian partners and U.S. companies, few have risen to the level of requiring arbitration. Misunderstandings between partners have led to conflicts, but such cases have been infrequent over the past 10 years.
Local courts may recognize foreign arbitral awards issued against the government, but they are not well-equipped to enforce such decisions. Post is aware of several such awards against state-owned companies that have not been enforced. In general, foreign investors complain more about administrative harassment or bottlenecks, and less about extrajudicial actions.
International Commercial Arbitration and Foreign Courts
The OHADA system serves both as domestic and primary reference legislation for alternative dispute resolution but is rarely used. GICAM, the country’s largest business lobby group, has an arbitration center based in Douala. In principle, local courts have the power to recognize and enforce foreign arbitral awards issued against the government if found at fault. As a treaty, OHADA standards prevail over domestic laws. An international arbitration award can prevail especially if operating through the OHADA framework. The Common Court of Justice and Arbitration (CCJA) enforced under OHADA are both an arbitration institution and a judicial court, with jurisdiction overall OHADA states.
Judicial processes are bureaucratic, expensive, time-intensive, and lengthy. This is true even for domestic and state-owned companies, which like their foreign competitors, also suffer from the weaknesses of the legal system and are not guaranteed any better treatment in case of dispute.
In a prominent November 2019 case, the general manager of a state-owned hydrocarbon distribution company complained that debts owed by the state-owned electricity company, in combination with frequent power cuts, had caused millions of dollars in financial losses. Instead of addressing the issue or seeking arbitration, the company fired the manager.
Cameroon has bankruptcy laws, which recognize the right of creditors, the equity of shareholders and other types of liabilities. Bankruptcy is not criminalized unless it can be proven that it is a deliberate collusion to avoid tax or mislead investors. In 2020, Cameroon ranked 167th out of 190 economies in the World Bank’s ranking of the ease of doing business and 129th on its ability to resolve insolvency. In bankruptcy situations, it takes 2.8 years on average and costs 33.5 percent of the debtor’s estate, with the most likely outcome being that the company will be sold piecemeal. The average recovery rate is 15.8 cents on the dollar.
4. Industrial Policies
Cameroon’s investment incentives remain in place. The 2013 investment law lists several types of investment incentives for investors and specifies the conditions that they must meet in order to benefit from those incentives. This law specifies incentives available to Cameroonian or foreign legal entities, whether established in Cameroon, conducting business therein, or holding shares in Cameroonian companies, with a view to encouraging private investment and boosting national production. For example, during the establishment phase (which cannot exceed five years), the new code provides for exemptions from VAT and duties on key services/assets (including an exemption from stamp duty on the lease of immovable property). During the operation phase (which cannot exceed 10 years), further exemptions from, or reductions of, other taxes (including corporate tax), duties (such as stamp duty on loans), and other fees are granted. Overall, the law seeks to facilitate, promote, and attract productive investment to develop activities geared towards strong, sustainable, and shared economic growth as well as job creation. In a context where businesses must navigate between national and regional incentives, U.S. companies and investors must seek local and regional expertise if they plan to operate in the CEMAC region.
Common incentives are granted to investors during the establishment and operation phases. During the operation phase, which may not exceed 10 years, the investor may enjoy exemptions from or reductions of payment of several taxes, duties, and other fees including corporate tax, tax on profit and stamp duty on loans. In addition, any investor may benefit from a tax credit provided he or she meets one of the following criteria: (1) employs at least five graduates each year, (2) combats pollution, and (3) develops public interest activities in rural areas.
The investor shall enjoy the following benefits during establishment phase, which may not exceed five years, with effect from the date of issuance of the approval:
- Exemption from stamp duty on establishment or capital increase;
- Exemption from stamp duty if immovable property used exclusively for professional purposes and that is part of an integral part of the investment program;
- Exemption from transfer taxes on the acquisition of immovable property, land, and buildings essential for the implementation of the investment program;
- Exemption from stamp duty on contracts for the supply of equipment and construction of buildings and installations that are essential for the implementation of their investment program;
- Full deduction of technical assistance fees in proportion to the amount of the investment made, calculated on the basis of the total amount of the investment;
- Exemption from VAT on the provision of services related to the execution of the project and obtained from abroad;
- Exemption from stamp duty on concession contracts;
- Exemption from business license tax;
- Exemption from taxes and duties on all equipment and materials related to the investment program;
- Exemption from VAT on the importation of equipment and materials;
- Immediate removal of equipment and material related investment program during clearance operations;
- The right to open in Cameroon and abroad local and foreign currency accounts and to carry out transactions on such accounts;
- The right to freely use and or keep abroad funds acquired or borrowed abroad, and to freely use the funds;
- The right to freely keep abroad dividends and proceeds of any kind from capital invested, as well as proceeds from the liquidation or sale of their assets;
- The right to directly pay abroad non-resident suppliers of goods and services essential for conduct of business; and,
- Free transfer of dividends and proceeds from the sale of shares in case of disinvestment.
With respect to foreign staff employed by the investor and resident in the Republic of Cameroon, they shall enjoy free conversion and free transfer to their country of origin of all or part of amounts due them, subject to prior payment of various taxes and social security contributions to which they are liable in compliance with the regulations in force. Finally, the government shall institute facilities necessary for the establishment of a specific visa and a reception counter at all airports throughout the national territory for investors, subject to their presentation of a formal invitation from the body in charge of investment promotion of small and medium-sized enterprises. There are additional incentives in priority economic sectors. In addition to the above-mentioned incentives, specific incentives may be provided to enterprises, which carry out investments that contribute to the attainment of the following priority objectives:
- Development of agriculture, fisheries, livestock, and plant, animal or fishery product packaging activities;
- Development of tourism and leisure facilities, social economy, and handicrafts;
- Development of housing, including social housing;
- Promotion of agroindustry, manufacturing industries, industry, construction materials, iron and steel industry, construction, maritime and navigation activities;
- Development of energy and water supply; encouragement of regional development and decentralization;
- The fight against pollution and environmental protection;
- Promotion and transfer of innovative technologies and research and development;
- Promotion of exports; and,
- Promotion of employment and vocational training.
Foreign Trade Zones/Free Ports/Trade Facilitation
In Cameroon, Foreign Trade Zones (FTZ) are demarcated and fenced geographic areas, with controlled access, where some standard trade barriers, tariffs, quotas, or other bureaucratic requirements are lifted or lowered to attract investments. Cameroon passed a special law instituting FTZs in 1990. Applications for an authorization to establish an industrial free zone are submitted to the National Office for Industrial Free Zones. The authorization to establish an Industrial Free Zone is granted by the Minister in Charge of Industrial Development. Some of the benefits of the FTZ are built into commercial, fiscal, custom, and labor codes. The status of FTZs has not changed since the last reporting period.
Performance and Data Localization Requirements
The government of Cameroon does not mandate local employment except as an incentive to entice foreign investment. It encourages investors to create jobs and employ local labor. There are no compulsory or legal requirements on senior management and boards of directors either, although local managers can facilitate the understanding of the domestic business environment. Prospective investors and their employees can travel to Cameroon on standard intentional visas. The fees may vary per country of application. Once they settle in Cameroon, they can apply for long-term residence permits. The government of Cameroon applies the visa reciprocity rules to a limited extent, but companies have in the past complained about the difficulty of obtaining work permits or the fact that work visas expire after six months and frequently are single entry. Longer term work permits are now said to be available, but they have not been issued to Post’s interlocutors unless included as residency work permits, a different category with more complicated application procedures. The government does not impose rules on the recruitment of senior management nor excessively onerous visa, residence, work permit, or similar requirements inhibiting mobility of foreign investors and their employees.
The government does not impose conditions on permission to invest in Cameroon. It gives incentives to investors to transform local raw materials, goods, and services in their production or their projects. There is no “forced localization” policy. Enforcement procedures for performance requirements are not yet standardized, but the government generally develops terms of reference on a case-by-case basis for contract performance. The government has not stated intentions to maintain, increase, or decrease performance requirements.
Investment incentives, described above, are available to both domestic and foreign investors. Foreign information technology providers are not required to turn over source code and/or provide access to encryption, but they can be required to provide them in cases of cybercrime under the national cybercrime law. Post is unaware of any measures designed to prevent or impede companies from freely transmitting customer or other business-related data outside of Cameroon.
5. Protection of Property Rights
Property rights are recognized by law, but Cameroon’s weak judiciary makes enforcement sporadic. For mortgage transactions between two private parties, a proper contract is required for the agreement to be binding and enforceable in the courts. Liens must be recorded in the contract. A registry of land title exists in Cameroon. The land rights of indigenous peoples, tribes, and farmers are recognized in the Constitution. Existing legislation does not discriminate against foreign landowners.
Records from the Ministry of State Property and Land Tenure (French acronym “MINDAF”) indicate that land registration rates have not significantly increased since colonial times. Between 1884 and 2005, only 125,000 title deeds were issued. On average, this represents approximately 1,000 titles per year, covering less than two percent of the land in Cameroon. In 2009, a study by the African Development Bank (AfDB) identified other distinctive patterns in land ownership. For example, formal land registration is more common in urban (60 percent) than in rural areas. According to the World Bank, the registration process can cost up to 13.7 percent of the property value.
Land disputes are common among Cameroonian citizens. The disputes are generally caused by non-respect of commercial sales contracts or by informal sales of land. Illegal occupations of lands are also common. Globally, Cameroon ranks 175th out of 190 economies on the ease of registering property in the World Bank’s Doing Business Report 2020.
Intellectual Property Rights
The legal structure for intellectual property rights (IPR) and corresponding enforcement mechanisms are weak. IP infringement and theft are especially common in the media, pharmaceuticals, software, and print industries. To secure a trademark registration right, a Cameroonian attorney must prepare and file a trademark application with the African Organization for Intellectual Property Rights (OAPI). The courts are responsible for enforcement.
There were no new IPR-related laws or regulations enacted during the previous year. The government seizes and publicly burns counterfeit goods. These actions are not documented systematically, and no cumulative data exists on the seizures. Cameroon is not listed in the United States Trade Representative (USTR) Special 301 Report or the Notorious Markets List. For additional information about national laws and points of contact at local IP offices, see WIPO’s country profiles at http://www.wipo.int/directory/en/ .
6. Financial Sector
Capital Markets and Portfolio Investment
The Cameroonian government is open to portfolio investment. With the encouragement of IMF and BEAC, Cameroon and other members of the CEMAC region have designed policies that facilitate the free flow of financial resources into the product and factor markets.
The Financial Markets Commission (CMF) of Cameroon physically merged with the Libreville-based Central African Financial Market Supervisory Board (CONSUMAF) in February 2019. The merger has led to the establishment of a unique regional stock exchange called the Central African Stock Exchange (CASE). Cameroon’s financial sector is underdeveloped, and government policies have limited bearing on the free flow of financial resources into the product and factor markets. Foreign investors can get credit on the local market and the private sector has access to a variety of credit instruments. In 2016, Cameroon sought to encourage the development of capital markets through Law No 2016/010 of 12 July 2016, governing undertakings for collective investment in transferable securities in Cameroon.
Cameroon is connected to the international banking payment system. The country is a CEMAC member, which maintains a central bank, BEAC. The current governor of BEAC is Abbas Mahamat Tolli (from Chad). CEMAC’s central bank works with the IMF on monetary policies and public finance reform. BEAC respects IMF Article VIII by refraining from restrictions on payments and transfers for current international transactions. Despite generally respecting Article VIII, BEAC has instituted several restrictions on payments to boost foreign exchange reserves. Throughout much of 2019-2020, financial institutions and importers complained of a backlog of requests for foreign exchange. BEAC is currently negotiating with several international oil companies on repatriation of revenues before external payments. While the situation has improved over the last six months, investors should be aware that timely repatriation of profits may be a stumbling block.
In 2020, with the support of the IMF, BEAC took steps to address the economic impact of COVID-19 in the region. The central bank eased monetary policy and introduced accommodative measures to ensure adequate liquidity in the banking system to supporting internal and external stability. Concomitantly, the regional banking sector controller (Commission Bancaire de l’Afrique Centrale or COBAC) eased prudential regulations to help banks delay pandemic-related losses.
Money and Banking System
Less than 15 percent of Cameroonians have access to formal banking services. The Cameroonian government has often spoken of increasing access, but no coherent policy or action has been taken to alleviate the problem. Mobile money, introduced by local and international telecom providers, is the closest tool to banking services that most Cameroonians can access.
The banking sector is generally healthy. Large, international commercial banks do most of the lending. One local bank, Afriland, operates in multiple other countries. Most smaller banks deal in small loans of short duration. Retail banking is not common. According to the World Bank, non-performing loans were 10.31 percent of total bank loans in 2016. The Cameroonian government does not keep statistics on non-performing assets. Cameroon’s largest banks are:
- Afriland First Bank ($3 billion)
- Société Générale Cameroon ($2.5 billion)
- Banque Internationale Du Cameroun Pour L’Epargne Et Le Crédit-BICEC ($2.1 billion)
- EcoBank ($1.4 billion)
- BGFI Bank Cameroon ($918 million)
- Union Bank of Africa Cameroon ($ 811 million)
(Source: Jeune Afrique, October 2020)
Foreign banks can establish operations in Cameroon. Most notably, Citibank and Standard Chartered Bank have operated in Cameroon for more than 20 years. They are subject to the same regulations as locally developed banks. Post is unaware of any lost correspondent banking relationships within the past three years. There are no restrictions on foreigners establishing bank accounts, credit instruments, business financing, or other such transactions.
The country has 412 registered microfinance institutions, 19 insurance companies, 4 electronic money institutions, and one Post Office bank. Two major money transfer operators are also present, essentially offering over-the-counter services. The Cameroon market is at the startup stage for its digital financial system. This emerging market segment is currently provided by banks in partnership with telecom operators. According to the World Bank (June 2020), in Cameroon, mobile money accounts are held by 15.1 percent of the adult population, which falls right after Gabon (43.6 percent). The specific market for e-payments is also less developed when compared to peer countries in the region such as Côte d’Ivoire (38.9 percent) and Senegal (31.8 percent).
Financial inclusion is low despite some progress brought about by mobile telephony. There were 21 million mobile telephony subscriptions at the end of 2019 in Cameroon (Agence de Regulation des Telecommunications – ART, 2018). Putting aside the multi-SIM effect, the penetration rate in terms of unique subscribers was about 50 percent at the end of 2019, which puts Cameroon in the lower end in the Central African region.
Foreign Exchange and Remittances
In May 2020, the BEAC reported that foreign reserves had increased by 30 percent compared to 2019. According to the central bank, this is the result of the tightening of regulations after foreign exchange reserves plummeted in the aftermath of the 2014 oil shock. At the time, the IMF estimated that the volume of foreign exchange assets illegally held outside the CEMAC zone by local firms and institutions was five trillion CFA ($8.3 billion).
On March 1, 2019, CEMAC members states through BEAC adopted a new foreign exchange currency regulation, which restricts payments in foreign currency by individuals and businesses. All sectors of the economy without exception will be subject to the new regulations. Given the importance of the oil sector in the economy of the region and the challenges in the implementation, BEAC allowed for an implementation period until December 31, 2020. In November 2020, this moratorium on implementing the foreign exchange regulations was extended until December 31, 2021. In addition, the bank has tightened administrative procedures. Each request for a foreign exchange transaction requires a “dossier” that would include various documents. The documents required vary based on the type of transaction to demonstrate the “legitimacy” of the planned purchase in foreign exchange that BEAC would approve. The formal list of required documents from BEAC includes a significant number of required supporting documents.
The IMF has stated that forex transactions of less than one million U.S. dollars only require approval by local BEAC representatives in each country and should take place in a matter of days. Forex transactions exceeding one million U.S. dollars require approval from BEAC headquarters in Yaoundé and should occur in less than 48 hours. Banks and other financial institutions complain that requests are often rejected on minor technical grounds. In practice, approved requests often take more than two weeks to process.
As of May 2020, BEAC is requiring international oil companies to repatriate 70 percent of proceeds from the sale of oil and gas and then apply to receive dollars or euros. Several Ministers of Finance and/or Energy in CEMAC countries have assured oil companies that they do not need to comply with the regulation, creating uncertainty for the operators. In theory, funds associated with any form of investment can be freely converted into any world currency, but the current BEAC restrictions are causing currency conversion concerns at financial institutions and oil companies.
The Central African CFA Franc is the currency of six independent states in Central Africa: Cameroon, Central African Republic, Chad, Republic of the Congo, Equatorial Guinea, and Gabon. It is administered by BEAC and is currently pegged at roughly 657.02 CFA to one Euro (April 08, 2021).
Remittance Policies and Sovereign Wealth Funds
According to the United Nations High Commissioner for Refugees, officially recorded inbounded remittances to Cameroon are estimated at $242 million and outbound remittances at $2.55 billion in 2017. Therefore, Cameroon is a net sender of remittances. Also according to UNHCR, ninety percent of the outbound remittances from Cameroon are sent to Nigeria.
Apart from the tightening of foreign exchange and remittance rules in 2019, Post is unaware of any recent changes or plans to change investment remittance policies that either tighten or relax access to foreign exchange for investment remittances. There are no time limitations on transactions beyond the classic banking transactions timeline. BEAC regulates remittance policies and banking transactions. Foreign investors can remit through convertible and negotiable instruments through legal channels recognized by BEAC, subject to the recent issues mentioned above. Cameroon does not have a sovereign wealth fund.
7. State-Owned Enterprises
Cameroon has at least 200 SOEs. Roughly 70 percent of SOEs are profit-oriented, though most are a net negative on government finances. Some provide public services. Many SOEs are so dominant in their markets that they act as de facto regulators, specifically in telecommunications and media. The Government of Cameroon has over 130 state-owned companies in which it has majority ownership, and which operate in key sectors of the economy including agribusiness, energy, and mining. SOEs are also present in real estate, transportation, services, information and communication technology, finance, and travel.
In 2017, the National Assembly voted into law a new regulation to govern SOEs. The stated objective is to improve the services offered and the competitiveness of public companies, in line with the country’s development objectives. Some of the innovations of this law include the diversification of the investment universe of SOEs, modern control through reporting requirements, and compliance with modern governance principles. As of 2021, it does not appear that any of these objectives have been completed. SOEs competing in the domestic market receive non-market-based advantages from the Cameroonian government. They receive taxpayer subsidies, and in many markets, serve as de facto regulators. They also have a history of accumulating unpaid tax arrears while at the same time benefitting from preferential access to land and to public funds through state interventions.
The Supreme Audit Chamber of Cameroon indicates in its yearly reports that SOEs are not financially transparent. Only about 22 percent of these companies publish financial accounts. Other reports have highlighted corruption cases involving managers of SOEs, inefficiencies, severe dysfunctions, and opacity in the management of SOEs. These problems are exacerbated by the government’s failure to impose any performance targets, productivity requirements, and quality of service standards nor any significant budget constraints on SOEs. The governing boards and senior executive teams are political appointees and connected individuals. The SOEs have means to avoid tax burdens levied on private enterprises, receive specialized consideration for subsidies and enhanced operating budgets, and obtain generally preferential treatment from the government (including courts).
In general, privatization appears to be on hold. The government favors Public-Private Partnerships or some variations of outsourcing of contractual management, with the state retaining some ownership of assets or of the business, rather than outright privatization. In some cases, the state also prefers to participate in ventures, such as mining companies, rather than creating a state-owned company. Yet, in at least one case, the government has appeared to be reversing privatization. This is the case for the country’s utility sectors, such as water and electricity, where the government has outsourced distribution to private operators. The state retains control of infrastructure, and there are no indications that this situation will change soon. There has been call for the government to list part of its stakes in state-owned companies on the Central African Stock Exchange (CASE).
Foreign investors can and do participate in the privatization programs. According to some analysts, of the 30 state-owned companies that were privatized before 2004, foreign bidders won the majority (22). For example, a British private equity firm owns the controlling share in ENEO, the country’s electricity monopoly. The public bidding on tender offers is transparent. They are advertised in the media, but the actual process of awarding contracts may still be tainted by corruption, particularly on large projects. The listing of public tenders in the Cameroon Tribune newspaper – the government-owned paper of record –and publication of which firms received the contract do not guarantee a fully transparent process of awards.
8. Responsible Business Conduct
Post is unaware of a formal definition of responsible business conduct (RBC) within the Cameroonian government. It does not have a national ombudsman for stakeholders to get information or raise concerns about RBC. The government has not conducted a national action plan on RBC nor does it factor RBC into its procurement decisions. Post is not aware of any recent high-profile instances of private sector impact on human rights. Cameroon does not have laws that regulate responsible business conduct. However, the government of Cameroon has enacted laws that cover issues related to what is locally considered corporate social responsibility. There are additional initiatives in the private sector to foster a corporate social responsibility culture.
All major infrastructure projects in Cameroon are compelled to conduct an Environmental and Social Impact Assessment (ESIA) to establish the impact of the projects on people and nature. Cameroon’s ESIA law strives to follow World Bank standards. An August 1996 master law related to environmental management prescribes environmental impact assessment for all projects that can cause environmental degradation. The ESIA is fast becoming an important and unavoidable compliance step for foreign and domestic companies.
The Cameroonian government struggles to enforce laws in relation to human rights, labor rights, consumer protection, and environmental protection. This situation has been exacerbated by the conflicts in the Northwest, Southwest, and Far North Regions. There is little corporate governance law in Cameroon, mostly since very few companies are open to portfolio investment. The Business Council for Good Governance, the American Chamber of Commerce, Rotary International, and Transparency International promote RBC in Cameroon, though their ability to monitor RBC is limited. Post is unaware of any government efforts to adhere to the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Afflicted and High-Risk Areas. Cameroon participates in the Extractive Industries Transparency Initiative. Domestic transparency measures requiring the disclosure of payments made to governments are lacking.
The economy of Cameroon is modernizing, but most sectors experience disruptions from informal activities. Even though this sector provides crucial livelihoods to the most vulnerable in urban environments, labor conditions are generally precarious. In the agricultural sector for example, the government estimates that 70 percent of labor is informal with instances of child labor especially in subsistence agriculture. In other sectors, for example mining, allegations of human or labor rights abuses by Chinese mining companies have surfaced in the recent past.
|Prevalence of informality in the economy of Cameroon|
|Key Sectors||% of GDP||Example of informality|
|2||Transportation||5.3||Motorbike taxis/Cross border trade|
|3||Information, Communication Technology (ICT)||5||Maintenance, repair, retail market|
|4||Extractive industry (Oil, Gas, Mining)||9||Artisanal mining/cross border trade|
|5||Banking and Finance||8.5||Informal microfinance institutions|
|6||Services and consumer retail market||12||Support services/home workers|
|7||Utilities (Electricity, Water, domestic gas, waste disposal-management)||3.1||Maintenance and repair|
|8||Real Estate and Infrastructure Construction||10.8||Labor, rental activities|
|10||Health services and pharmaceuticals||1||Counterfeit medicine|
|11||Public Administration||8||Unlicensed institutions and labor|
|12||Tourism, media, and Leisure||–||Unlicensed institutions and labor|
(Source: Cameroon Ministry of Finance, Finance laws 2016-2020)
Department of State
- Country Reports on Human Rights Practices;
- Trafficking in Persons Report;
- Guidance on Implementing the “UN Guiding Principles” for Transactions Linked to Foreign Government End-Users for Products or Services with Surveillance Capabilities and;
- North Korea Sanctions & Enforcement Actions Advisory
Department of Labor
Resources to Report Corruption
Corruption is punishable under sections 134 and 134 (a) of the Pena1 Code of Cameroon. Despite these rules, corruption remains endemic in the country. In 2020, Cameroon ranked 149 of 180 in Transparency International’s Corruption Perception Index. Anti-corruption laws are applicable to all citizens and institutions throughout the national territory. Article 66 of the constitution requires civil servants and elected officials to declare their assets and property at the beginning and at the end of their tenure of office, but it has never been implemented. Similarly, the Civil Service Statute contains provisions and the procedures to be followed in the event of a conflict of interest. These provisions are enshrined in Law No. 003/2006 of 25 April 2006, which also created the Commission for the declaration of property and assets. Other codes of conduct in different public institutions have created gift registers to prevent bribes, but they are not implemented. In terms of public contracts, Decree N° 2018/0001/PM of January 5, 2018 created a portal called Cameroon Online E-procurement System (Coleps) for the digitalization, including application processing, award, and monitoring and evaluation of all tenders. Since the launch of the portal, technical issues and disregard by civil servants have curbed its effectiveness, leading to the parallel continuation of the bribe-prone paper-based procurement system. U.S. firms indicate that corruption is most pervasive in government procurement, award of licenses or concessions, transfers, performance requirements, dispute settlement, regulatory system, customs, and taxation.
Since its inception in 2006 (Presidential Decree No. 2006/088 of 11 March 2006), the National Anti-Corruption Commission (CONAC) has encouraged private companies to establish internal codes of conduct and ethics committees to review practices. Post is unaware of how many companies have instituted either program. Bribery of government officials remains common. While some companies use internal controls to detect and prevent such bribery, Post is unaware of how widespread these internal controls are.
Cameroon is signatory to the United Nations and the African Union anti-corruption initiatives, but the international initiatives have practical limited effects on the enforcement of laws in the country. Post is unaware of any NGO’s involvement in investigating corruption. The government prefers the National Anti-Corruption Commission (CONAC) to investigate potential cases. U.S. firms indicate that corruption is most pervasive in government procurement, award of licenses or concessions, transfers, performance requirements, dispute settlement, regulatory system, customs, and taxation.
Resources to Report Corruption
Rev. Dieudonné MASSI GAMS
National Anti-Corruption Commission
B.P. 33200 Yaoundé Cameroon
(+237) 22 20 37 32
Barrister Charles NGUINI
Transparency International Cameroon
Nouvelle route Bastos, rue 1.839, BP : 4562 Yaoundé
(+237) 33 15 63 78
10. Political and Security Environment
Cameroon faces several security challenges. A conflict between security forces and armed separatists is entering its fifth year in the English-speaking Southwest and Northwest Regions. Boko Haram and ISIS-West Africa continue to attack civilians and security forces in the Far North Region. In the Adamoua and East Regions, a wave of kidnappings and the presence of refugees from the Central African Republic and from Nigeria, has led to increased military presence. Terrorists and separatists alike have targeted economic assets to affect political change. The country is growing increasingly more politicized and insecure.
In the Anglophone regions, separatist leaders have claimed responsibility on social media for the arsons that destroyed hospitals, schools, bridges, and roads. Separatists have also posted videos of executions and beheadings on the internet while also claiming multiple kidnappings for ransom. Human rights organizations have accused soldiers and separatists of grave human rights abuses. In the Far North of Cameroon, Boko Haram and ISIS-West Africa fighters have looted villages and cattle, kidnapped, and abused women. Consequently, several infrastructures projects have ground to a halt.
Cameroon is growing increasingly insecure. In 2020, despite public statements by the government of a willingness to dialogue to resolve the Anglophone crisis, it continues to rely on the military to control and curb the conflict. At the same time, security forces are stretched thin, allowing Boko Haram and ISIS-West Africa to maintain a footprint in the country’s Far North Region. Political dissent is quickly stamped out. Several members of opposition political parties are still languishing in jail, in most cases without trial.
11. Labor Policies and Practices
COVID-19 has had a significant impact on the labor market. Data from the National Institute of Statistics show that a large proportion of workers have seen a drastic reduction in wages (68 percent) and temporary job suspension (31.6 percent). Also, unemployment rate reached 7.47 percent in April 2020. Officially, the unemployment rate hovers around four percent based on International Labor Organization (ILO) standards but is believed to be much higher. Most of the youth who possess skills that could be put to use in the economy are under-employed in the informal sector. Under-employment, which is generally under-reported, has continued to hover around 75 percent for youth under 30. Most Cameroonians find occupation in the informal sector, where unskilled labor is prevalent, especially in the agricultural and service sectors, manufacturing, commerce, technical trades, and mid-management jobs.
Other structural problems in the labor market include the chronic shortage of technical trade skills, for example for maintenance and repair of industrial machinery, in every sector of the economy. Truck and automotive maintenance are widely practiced in the informal sector, while rudimentary or artisanal agriculture, fishing, and textile manufacturing continue to hamper industrialization with unskilled labor.
The government of Cameroon does not require foreign companies to hire nationals. Foreign nationals are required, however, to obtain work permits prior to formal employment. While foreign nationals are automatically issued work permits for companies of the industrial free zones regime, their number may not exceed 20 percent of the total work force of a company after the fifth year of operation in Cameroon if it benefits from the Industrial Free Zone (IFZ) regime.
Although union and contract agreements vary widely from sector to sector, in general, Cameroon functions as an “employment at will” economy, and labor laws differentiate between layoffs and firing. Layoffs are not caused by the fault of the employees and are often considered as alternative solutions to dismissing workers based on performance fault or economic grounds. There is no special treatment of labor in special economic zones, foreign trade zones, or free ports.
While the Labor Code applies to enterprises of the Industrial Free Zone (IFZ) regime, some matters are governed by special provisions under the 1990 law establishing IFZs. These include the employer’s right to determine salaries according to productivity, free negotiation of work contracts, and automatic issuance of work permits for foreign workers. The Ministry of Labor monitors labor abuses, health and safety standards, and other related issues, but enforcement is poor. Labor laws are waived within the framework of IFZs to attract or retain investment. The waivers include the employer’s right to determine salaries according to productivity, free negotiation of work contracts, and automatic issuance of work permits for foreign nationals.
There are independent labor unions and others affiliated with the government that operate under existing laws and regulations. Over 100 trade unions and 12 union confederations are active in the country. However, the labor union movement is highly fractured and somewhat ineffective in promoting workers’ rights. Some union leaders accuse the government and company managers of promoting division within trade unions to weaken them, as well as protecting non-representative trade union leaders with whom they can negotiate more easily.
Cameroon’s labor dispute resolution mechanisms are outlined in the labor code. The procedure differs depending on whether the dispute is individual or collective. Individual disputes fall under the jurisdiction of the civil court dealing with labor matters in the place of employment or residence of the worker. The legal procedure is initiated after the labor inspector fails to settle the dispute amicably out of the court system. Settlement of collective labor disputes is subject to conciliation and arbitration, and any strike or lock-out started after the procedures have been exhausted and have failed is deemed legitimate. While the conciliation procedure is conducted by the labor inspector, arbitration of any collective dispute that has not been settled by conciliation is handled by an arbitration board, chaired by the competent judicial officer of the competent court of appeal. Workers who ignore procedures to conduct a legal strike can be dismissed or fined.
Strikes occur regularly and are generally repressed by the police, though they are often due to lack of payment by the employer and are resolved quickly. The latest strike started on February 3, 2021 at the construction site of the Nachtigal hydroelectric dam, which will have a capacity of 420 megawatts. The dispute erupted after a new electronic time keeping system grossly reduced the wage of workers. On March 15, 2021, the construction company announced that the dispute had been resolved after the Minister of Labor and Social Security and the Minister of Energy and Water held talks with 1,350 workers.
Cameroonian labor code lays down principles of labor laws regarding employment, dismissal, remedies for wrongful dismissal, compensation for industrial injuries, and trade unions. But most jobs do not have binding contracts, and employers generally seem to have the upper hand in labor disputes. There is informality even in the formal sector, which is against the law. Because of this landscape, it is important for U.S. companies to ensure compliance with the local labor laws and to abide by international best practices. There were no new labor-related laws or regulations enacted during the last year. Post is unaware of any pending draft bills.
13. Foreign Direct Investment and Foreign Portfolio Investment Statistics
|Host Country Statistical source*||USG or international statistical source||USG or International Source of Data: BEA; IMF; Eurostat; UNCTAD, Other|
|Host Country Gross Domestic Product (GDP) ($M USD)||2021||$44,41||2020||$39,04||https://www.imf.org/external/datamapper/
|Foreign Direct Investment||Host Country Statistical source||USG or international statistical source||USG or international Source of data: BEA; IMF; Eurostat; UNCTAD, Other|
|U.S. FDI in partner country ($M USD, stock positions)||2019||$ -2.00 mio||2018||$14.00 mio||https://apps.bea.gov/international/factsheet/
|Host country’s FDI in the United States ($M USD, stock positions)||N/A||N/A||N/A||N/A||N/A|
|Total inbound stock of FDI as % host GDP||2019||$782.00 mio||2018||$765 mio||https://unctad.org/topic/investment/
* Source for Host Country Data: 2021 Cameroon Finance Bill, page 13 (converted at $1=563 Central African Francs as of March 16, 2021)
Table 3: Sources and Destination of FDI
Data not available.
Table 4: Sources of Portfolio Investment
Data not available.
14. Contact for More Information
Economic Specialist, Political and Economic Section
6050, Avenue Rosa Parks, Yaounde, Cameroon
TELEPHONE NUMBER: +237 222514000
EMAIL ADDRESS: firstname.lastname@example.org