Cameroon - Foreign investment





Under the terms of a structural adjustment program, Cameroon has liberalized its investment code, eliminated most price controls, reduced import and export duties, and sought to privatize its parastatals. Foreign and domestic investors are provided with guarantees that substantially comply with international standards. Cameroon's investment code, enacted in 1990, eliminated requirements for technology transfer and geographic location. Investments are not screened and foreign exchange privileges are not rationed. Investors can freely transfer dividends, return of capital, and interest and capital on foreign debt. The code requires at least 35% Cameroonian equity ownership in small- and medium-sized enterprises. In 1990, Cameroon also promulgated an industrial free zone (IFZ) regime which features a comprehensive package of incentives (a ten-year tax holiday and 15% corporate tax year beginning the 11th year) for enterprises which export at least 80% of their output, with licenses awarded by an independent regulatory agency, the National Office for Industrial Free Zones (NOIFZ). From 1996 to late 1999, the licensing process was suspended pending audits, but in 2002, the government declared all of Cameroon an IFZ, with benefits available to any enterprise meeting the export criterion. Cameroon has a special agreement with France only recently implemented which gives preferential treatment to France, including a special 15% tax and tax deductions for technical assistance.

Despite Cameroon's attractive investment code and IFZ regime, few foreign investors have come forward because of problems in its implementation. In 2002, Transparency International scored Cameroon 2.2 on its 10-point International Corruption Perceptions Index, ranking 90th of 102 countries scored. In June 2003, the government got a soft ODA loan from the World Bank for about $50 million to help it buy back $953.3 million of commercial debt and suppliers' credits at 14.5% face value. If acceptable to creditors who have not received payments for years, this could increase Cameroon's attractiveness for foreign investment.

The government does not publish reliable statistics on foreign investment, but according to UNCTAD estimates, foreign direct investment (FDI) in Cameroon was in the range of $30 million to $50 million from 1997 to 2000. FDI inflow rose to $75 million in 2001, reflecting the sale of 56% of the state electricity company, SONEL, to the US company AES Sirocco for about $70 million.

France has been the biggest source of foreign investment. The French company Pechiney has long owned the majority share of ALUCAM, the state aluminum complex, and in the privatization process begun in 1994, a French firm bought a state sugar mill in 1998; a French telecom firm was granted a mobile telephone license in 1999 and a French bank bought Cameroon's last state bank in 2000. South African firms acquired controlling shares in the privatized national railroad and the state-owned mobile telephone company. The Commonwealth Development Corporation had over £36 million ( US $58 million) invested in Cameroonian enterprises as of 1999, including CDC, HEVECAM, Printpak, SNEC, and SOCATRAL. In 2001 and 2002, the principal investors in the $2.2 billion Chad/Cameroon pipeline project were Exxon Mobile with 40% (also the project operator), Petronas of Malaysia (35%), and Chevron Texaco (25%), with the US Export-Import Bank providing $158 million in loan guarantees for the project.

In June 2003, the government officially launched the Douala Stock Exchange, after more than three years of preparation and two missed launch dates, with the announced purpose of facilitating foreign investment in the Cameroon economy. No listings had yet been published.

User Contributions:

Valentine Nde Fru
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Apr 17, 2009 @ 4:04 am
Cameroon had a mixed Economic System after 1960s following post independence nationalisations principally in the natural resource sector of Properties that had long been in the Hands of foreign control. That means, there were still existing private interests represented within the nattional economy. However, by 1990s, following pressures from the Brettonwoods Institutions, the country slowly moved to a mixed Economic System as the Properties that were the source of Nationalisations and within governmental control became the object of privatisations such as SONEL and the part privatisation of the Cameroon Developoment Corporation.
However, the problem with foreign investment in Cameroon is that, Investments generally are moving into the Service sector and the country lack the kind of Human Resource and Infrastructure to attract such Investments. Therefore, independent of how much the country liberalise the Economy, without these factors in place, the inflow of international foreign investments capital will remained hindered.
Eyiomen Yosimbom Raymond
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Aug 13, 2010 @ 5:05 am
Foreign investments are a critical fibre in the entire fabric of national development. I concur with Fru's opinion that meaningful foriegn investment in any developing country results from an ensemble of factors. Foreign investments in any economy is largely a product of sound public policies, an attractively effective judicial machinery and a national culture of "accountability". A blend of the foregoing factors and economic liberalisation eventually drive the economic engine to a position where foreign investments become inevitable.
To my mind, we are letting the cart pull the horse if we concentrate on economic liberalisation.
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Oct 9, 2011 @ 12:12 pm
I am Cameroonian living in South Africa. I own and run a business consulting company herein. I brought to Cameroon several investors but we could not invest a cent as there was too much bureaucracy as to grant us authorisation to operate. Even the small Police officer at the airport did not mind to ask for some moneys, saying it is by instructiin from Government that investors should be severely dealt with at their arrival. This discourages investors. We need land, tax free zone in Douala and Loum for Souh African investment for serious job creation in Cameroon. Contact me.
njima
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Jan 16, 2014 @ 5:05 am
Really I'm very surprised of my country's policy regarding foreign investors and the investments. I live in Dubai working as a sales executive. I really see a proper application of foreign investment and how it really goes in hand to match with the government- business success of the region. This success just from the rare availability of Petroleum deposit which right now is not even the main source of the government's income. What of a big nation like Cameroon where we have every natural resources at our disposal and being Africa in miniature we are not capable of utilizing our resources for the well being of our nation. I think the problem is due to a corruptible system where politics has come to be at the center of every single development decisions. after the lecture of this article and many other articles ive come across, Cameroon arrange it policies to match at the international standard and to be approved by the AU and the UNO, but yet it is not enough for the economic situation to be at the international standard. This is simply because the means of it application in the territory is not followed in a proper manner. Let hope that things will change for the better when there will be competent and God's fearing people to rule.

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