Cameroon, the largest economy in the Central African Economic and Monetary Union (CEMAC), continues to face the repercussions of the COVID-19 pandemic; however, growth has started to recover from a 2020 recession. The International Monetary Fund (IMF) projects Cameroon’s gross domestic product (GDP) to increase by 4.6 percent in 2022. Cameroon’s current account balance also improved in 2021 and early 2022. The government continues to implement its 2020-2030 National Development Strategy and development projects, especially in road infrastructure, transport, energy, and health, albeit with delays. Cameroon utilized its hosting of the Africa Cup of Nations soccer tournament in early 2022 to hasten the completion of some long-awaited projects and promote Cameroon to investors.
Cameroon maintains strong competitive advantages because of a bilingual population, a relatively diversified economy, and its location as a gateway to the Central African region. It offers immense investment potential in infrastructure, extractive industries, consumer markets, 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.
Corruption and weak governance structures continue to hamper Cameroon’s business climate.
The IMF approved a three-year, $689.5 million hybrid Extended Credit Facility-Extended Fund Facility arrangement in July 2021 to advance structural fiscal reforms, improve governance, and continue mitigating the health, economic, and social consequences of the pandemic while ensuring domestic and external sustainability. Cameroon’s 2022 budget aligns with its National Development Strategy and IMF program and sets a target to reduce the budget deficit from -3.2 percent in 2021 to -2 percent in 2022.
|TI Corruption Perceptions Index||2021||144 of 180||http://www.transparency.org/research/cpi/overview|
|Global Innovation Index||2021||123 of 132||https://www.globalinnovationindex.org/analysis-indicator|
|U.S. FDI in partner country ($M USD, historical stock positions)||2020||$-19 million||https://apps.bea.gov/international/factsheet/|
|World Bank GNI per capita||2020||$1,520||https://data.worldbank.org/indicator/NY.GNP.PCAP.CD|
1. Openness To, and Restrictions Upon, Foreign 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 2020-2030 National Development Strategy 2030, which was launched November 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 National Development Strategy 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 government created the Special Crime Tribunal on corruption and economic crimes in 2012 to prosecute crimes related to the misappropriation of public funds of $100,000 or more. The Court specifically targets custodians of public funds as well as officials who have the authority to collect or spend money on behalf of the state. The Court reported it had tried 225 cases and recovered $323 million as of July 2020. Another institution, the Audit Bench of the Supreme Court, reports directly to the President and is charged with conducting audits and investigations of public funds. The National Anti-Corruption Commission also reports to the President and investigates corruption allegations. However, corruption and administrative mismanagement continue to hamper the business climate in Cameroon. Cameroon consistently ranks in the bottom half of the Transparency International’s Corruption Perceptions Index (144 of 180 in 2021). In 2020, Cameroon ranked 167 of 190 on the Ease of Doing Business 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.
The Cameroon Investment Promotion Agency (CIPA) was created in 2010 and is a state-owned entity with a mission of attracting investment to Cameroon in collaboration with other state institutions. The agency seeks also to foster an enabling environment for investments in Cameroon. As of 2021, CIPA had signed 172 investment agreements and generated the creation of over 60,000 jobs.
CIPA offers investment incentives covering 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 visa 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, 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 two years, GICAM has been critical of the government’s handling of the negative impacts of COVID-19 and global inflationary pressures on business.
There are no general economy-wide (statutory, de facto, or otherwise) limits on foreign ownership or control. Apart from the 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 expressly prohibit 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.
The IMF approved a three-year, $689.5 million hybrid Extended Credit Facility-Extended Fund Facility arrangement in July 2021. The arrangements are built around five pillars: (i) mitigating the health, economic, and social consequences of the pandemic while ensuring domestic and external sustainability; (ii) reinforcing good governance and strengthening transparency and the anti-corruption framework; (iii) accelerating structural fiscal reforms to modernize tax and customs administrations, mobilize revenue, improve public financial management, increase public investment efficiency, and reduce fiscal risks from state-owned enterprises; (iv) strengthening debt management and reduce debt vulnerabilities; and (v) implementing structural reforms to accelerate economic diversification, boost financial sector resilience and inclusion, and promote gender equality and a greener economy. The IMF completed a First Review of the program on February 23, 2022 and found Cameroon’s overall program performance to be mixed. While macroeconomic performance is broadly satisfactory, and efforts to promote good governance and transparency are gaining momentum, progress on structural reforms is slow. Copies of the review can be found on the IMF website .
Civil society organizations and business associations have provided investment related policy recommendations. Following the introduction of an electronic payment tax, which includes mobile money, in the 2022 finance law, Cameroon’s largest business association GICAM noted “mobile money taxes can have a negative impact on excise tax receipts as consumers are pushed into non-traceable cash transactions, and on the size of remittances from abroad.” GICAM recommended the government enhance consumer purchasing power by reducing some taxes, reviewing remuneration policy, and amending its price regulation policies. Following reform proposals from the road transport syndicate on freight conditions on the Douala-Bangui Corridor, the government approved the construction of rest areas along the corridor as well as the reduction of police checkpoints in 2021.
Entrepreneurs obtain a unique tax identifying number when they open a company in Cameroon. Within 15 days after the registration for a new business, the Directorate General of Taxation issues a permanent taxpayer identification number, known as the Unique Identification Number (UIN).
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 longer 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 of 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 (~$1,800) for establishing LLCs.
In Cameroon, business registration is most often manual, although the Ministry of Small and Medium-Sized Enterprises launched an electronic registration portal designed to automate the process at https://cameroun.eregistrations.org/ . Due to internet access challenges, the website is not always operational. To manually register, entrepreneurs must go to a Ministry of Small and Medium Sized Enterprises regional center 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.
3. Legal Regime
Cameroon’s laws are consistent with international business and legal norms. Cameroon’s legal architecture is made up of national, regional CEMAC, and supra-national regulations, most of which are applicable to domestic and foreign businesses. Weak implementation and investigative 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 with 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 2021 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. 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). Cameroon is a member of CEMAC and is thus subject to its regulations, though implementation remains weak. CEMAC’s central bank, the Bank of Central African States (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 has 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 government does not require companies to have environmental, social, or governance disclosures.
Cameroon is a CEMAC member state. 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 are 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. Cameroon did not notify all draft technical regulations to the WTO Committee on Technical Barriers to Trade (TBT) in 2020 and submitted eight notifications between 1995 and 2020.
The Cameroonian legal system is a legacy of French (Civil Law), German (Codified Laws), English (Common Law), and domestic national customs, which vary 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. There are not enough specialized judges in the commercial and economic fields. Consequently, poor enforcement of laws and accounting standards tend 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.
Arbitration is becoming the solution of choice to solve business disputes in Cameroon. Arbitration is in the OHADA corporate law and business associations can choose to use OHADA law to run arbitration councils. 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. In Cameroon, businesses mostly use the GICAM and Abidjan Arbitration Councils.
Foreign direct investments are governed by Law No. 2013/004 of April 18, 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 applies to both 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 2022 finance law is the newest legal instrument to have been published in the past year. The 2021 finance law created new taxes, while maintaining some existing exonerations, notably on value-added taxes and life insurance savings. The 2022 law created new taxes as well, including a tax on electronic payments. CIPA maintains a list of relevant laws, rules, procedures, and reporting requirements for investors ( https://www.investincameroon.net/language/en/ ).
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 enterprises tend to have quasi-monopoly or monopsony status in their markets.
Decree No.85-9 of July 4, 1985 and the subsequent implementation of Decree N°.87-1872 of December 16, 1987, outline the procedures governing expropriation for public purposes and conditions for compensation. Some of the provisions of these legal texts were repealed by Instruction No. 005/I/Y.25/MINDAF/D220 of December 29, 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 large infrastructure road and hydroelectric dam projects. 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.
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 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, to encourage private investment and boost national production. For example, during the establishment phase (which cannot exceed five years), the code provides for exemptions from VAT and duties on key services/assets (including an exemption from stamp duties on the lease of immovable property). During the operation phase (which cannot exceed 10 years), further exemptions from, or reductions of, other taxes (including a corporate tax), duties (such as a 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 duties 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, or (3) develops public interest activities in rural areas.
BEAC foreign exchange regulations govern how investors in Cameroon open foreign currency accounts and carry out transactions on such accounts. The regulations also stipulate how funds are transferred abroad. Notwithstanding BEAC regulations, 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 duties 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 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 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.
The government does not offer incentives for businesses owned by underrepresented investors such as women. The government does not offer incentives for clean energy investments.
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. An Industrial Free Zone (IFZ) is a type of FTZ in Cameroon. Applications for an authorization to establish an IFZ are submitted to the National Office for Industrial Free Zones. The Minister in Charge of Industrial Development grants authorization to establish an IFZ. To qualify for industrial free zone status, a company must export 80 percent of its products. The status of FTZs has not changed since the last reporting period. Additionally, Law No. 2013/11 of December16, 2013 defines an economic zone as an area made up of one or more geographical areas that are serviced, developed, and equipped with infrastructure, with a view to enabling the entities located there to produce goods and services in optimal conditions. Decree No. 2019/195 of April 17, 2019, also establishes the modalities for the creation and management of economic zones in Cameroon. The ports of Douala and Kribi have economic zones.
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 international 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 U.S. Embassy Yaoundé’s interlocutors unless included as residency work permits, a different category with more complicated application procedures.
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. U.S. Embassy Yaoundé officials are 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 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 property are also common. Globally, Cameroon ranked 175th out of 190 economies on the ease of registering property in the World Bank’s Doing Business Report 2020.
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 (OAPI), which is headquartered in Yaoundé. 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 exist 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, please see WIPO’s country profiles at http://www.wipo.int/directory/en/.
6. Financial Sector
The Cameroonian government is open to portfolio investment. With the encouragement of the 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 of Cameroon merged operations with the Libreville-based Central African Financial Market Supervisory Board 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 July 12, 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. 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. Financial institutions and importers complain of a backlog of requests for foreign exchange. BEAC is currently negotiating with several international oil companies on repatriation of revenues before external payments. 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.
Less than 20 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. In its 2022 finance law, the government introduced a tax on electronic payment transfers, including the ubiquitously used “Mobile Money.”
The banking sector is generally healthy. Large, international commercial banks do most of the lending. One local bank, Afriland, operates in Cameroon and 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. According to Cameroon’s National Credit Council, Afriland First Bank, Societe General Cameroun (SGC), Banque Internationale du Cameroun pour l’Epargne et le Credit (BICEC), and Societe Commerciale de Banque Cameroun (SCB) are the most important banks in the national banking system, accounting for 52 percent of the banking system’s total consolidated balance sheet, 54 percent of total loans, and 54 percent of customer deposits in 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 local banks. U.S. Embassy Yaoundé officials are 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, four 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 a 2021 BEAC report on the state of electronic payments in the CEMAC zone, electronic money payments in the CEMAC region increased 21.8 percent from 2019 to 2020, totaling approximately $51 million in 2020 compared to $42 million in 2019. Cameroon represented the largest amount of electronic payment transfers, accounting for 73 percent of all CEMAC transactions and totaling over $20 million in 2020.
Financial inclusion is low despite some progress brought about by mobile telephony. The World Bank estimates there were 25 million mobile cellular subscriptions in Cameroon in 2020. 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.
Cameroon does not have a sovereign wealth fund.
8. Responsible Business Conduct
U.S. Embassy Yaoundé officials are 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. U.S. Embassy Yaoundé officials are 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 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 an environmental impact assessment for all projects that can cause environmental degradation.
The Cameroonian government struggles to enforce laws in relation to human rights, labor rights, consumer protection, and environmental protection. 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. U.S. Embassy Yaoundé officials are 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. The informal sector provides crucial livelihoods to the most vulnerable in urban environments; however, labor conditions are generally precarious. In the agricultural sector, the government estimates that 70 percent of labor is informal with instances of child labor 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. Indigenous forest communities also complain the government does not enforce logging concession laws.
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;
- U.S. National Contact Point for the OECD Guidelines for Multinational Enterprises; and;
- Xinjiang Supply Chain Business Advisory
Department of the Treasury
Department of Labor
- Findings on the Worst Forms of Child Labor Report;
- List of Goods Produced by Child Labor or Forced Labor;
- Sweat & Toil: Child Labor, Forced Labor, and Human Trafficking Around the World and;
Cameroon revised its nationally determined contributions in November 2021. Cameroon’s mitigation target is to reduce greenhouse gas emissions by 35 percent by 2035. Mitigation targets are focused on forest management, energy, agriculture, and waste. Cameroon developed a National Adaptation Plan in 2015. Cameroon’s adaptation strategies include integrating adaptation planning into national sectoral strategies and policies, reducing the vulnerability of major economic sectors and agro-ecological zones to climate change, and raising awareness among the population. Cameroon does not yet have a national climate strategy or strategy for monitoring its natural capital, although the U.S. government is supporting Cameroon to build capacity to collect, monitor, and analyze climate data. With U.S. government support, Cameroon published its first atlas of land coverage in 2021. Cameroon developed a National Biodiversity Strategy and Action Plan in 2012 to integrate the conservation and sustainable use of biological diversity into relevant sectoral or cross-sectoral plans, programs, and policies.
Cameroon does not have policies to achieve net-zero carbon emissions by 2050, but the government recognizes the huge role its forests, which are in the Congo Basin Forest region, will play as a carbon sink and focused mitigation targets on the forestry sector. Cameroon does not specify expectations on private sector contributions to achieving relevant climate targets. There are currently no climate-related regulatory incentives for private sector. All infrastructure projects are compelled to conduct an Environmental and Social Impact Assessment to establish the impact of projects on people and nature. The National Development Strategy has integrated environmental protection into its objectives.
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 2021, Cameroon ranked 144 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 enforced, since the adoption of the constitution in 1996. 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 April 25, 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 No. 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 March 11, 2006), the National Anti-Corruption Commission (CONAC) has encouraged private companies to establish internal codes of conduct and ethics committees to review practices. U.S. Embassy Yaoundé officials are 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, U.S. Embassy Yaoundé officials are 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 limited practical effects on the enforcement of laws in the country. U.S. Embassy Yaoundé officials are unaware of any NGO’s involvement in investigating corruption. The government prefers the National Anti-Corruption Commission (CONAC) to investigate potential cases. U.S. companies cite corruption as among the top obstacles to investing in Cameroon and report its being most pervasive in government procurement, the award of licenses and concessions, customs, and taxation.
Rev. Dieudonné MASSI GAMS
National Anti-Corruption Commission
B.P. 33200 Yaoundé Cameroon
(+237) 22 20 37 32
Transparency International Cameroon
Nouvelle route Bastos, rue 1.839, BP: 4562 Yaoundé
(+237) 22 68 23 30
10. Political and Security Environment
Cameroon faces several security challenges. Violence by non-state armed groups against security forces and the local population is in its sixth year in the primarily 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 has led to increased military presence. Terrorists and separatists alike have targeted economic assets and public infrastructure to effect political change.
In the Northwest and Southwest regions, leaders of non-state armed groups have claimed responsibility on social media for the killing of government officials, arsons that destroyed hospitals, schools, bridges, roads, and the seizure of state-run utilities. Non-state armed groups have also posted videos on social media of executions and beheadings of security officers while also claiming responsibility for multiple kidnappings for ransom of persons perceived to be against their cause. Human rights organizations and local citizens 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.
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, the unemployment rate reached 6.1 percent in 2021 according to the National Institute of Statistics. Most of the youth who possess skills that could be used 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 Cameroonian 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.
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 regime, some matters are governed by special provisions under the 1990 law establishing Industrial Free Zones. 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 and Social Security monitors labor abuses, health and safety standards, and other related issues, but enforcement is poor. Labor laws are waived within the framework of Industrial Free Zones 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 (including when the employer is the government) and are resolved quickly. Recent strikes involved public sector employees. The National Potable Water Employee Union launched a strike in February 2022, citing management concerns of the state-owned water utility, CAMWATER. The union also cited concern about the absence of a plan for the construction of new water infrastructure, and a maintenance and rehabilitation plan for existing networks. In response, the Minister of Energy and Water Resources, who supervises CAMWATER, engaged the union directly in negotiations. In another public sector strike, teachers launched a broad, nation-wide strike in February 2022 to demand better working conditions and compensation for unpaid wages and benefits, totaling hundreds of millions of dollars. The government has called for dialogue and offered to pay a portion of the amount teachers demanded.
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. U.S. Embassy Yaoundé officials are unaware of any pending draft bills.
The Cameroon National Institute of Statistics estimates that every sector has a level of informality. Likewise, the IMF estimates the informal economy contributes 20-30 percent to Cameroon’s GDP every year and provides jobs to 84 percent of the active working population. Additionally, informal employment comprises over 90 percent of the agricultural sector.
|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)
14. Contact for More Information
Deputy Chief, Political-Economic Section
U.S. Embassy Yaounde