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.