The U.S. Department of State’s Investment Climate Statements provide information on the business climates of more than 170 economies and are prepared by economic officers stationed in embassies and posts around the world. They analyze a variety of economies that are or could be markets for U.S. businesses.
Topics include Openness to Investment, Legal and Regulatory systems, Dispute Resolution, Intellectual Property Rights, Transparency, Performance Requirements, State-Owned Enterprises, Responsible Business Conduct, and Corruption.
These statements highlight persistent barriers to further U.S. investment. Addressing these barriers would expand high-quality, private sector-led investment in infrastructure, further women’s economic empowerment, and facilitate a healthy business environment for the digital economy. To access the ICS, visit the U.S. Department of State Investment Climate Statement website.
Executive Summary
Cameroon continues to implement an Extended Credit Facility from the IMF but has fallen behind on most of the reforms outlined in the agreement. In May, the IMF approved the disbursement of a $226 million Rapid Credit Facility to support the “urgent balance of payment needs” stemming from the COVID-19 crisis. A resurgent Boko Haram and ISIS-West Africa in the country’s Far North Region, combined with separatist violence in the Anglophone Northwest and Southwest Regions, continue to undermine Cameroon’s security and distract the government from needed economic reforms and infrastructure improvement. In January 2020, Cameroon lost its eligibility in the African Growth and Opportunities Act due to human rights concerns. Collapsing oil prices in early 2020 and the economic slowdown related to COVID-19 will hamper public finances and growth prospects, which will limit the government’s ability to make much-needed investments in physical infrastructure, education, and health.
Foreign investment continues to focus on extractive industries and infrastructure, most notably minerals and energy. The government regularly calls for expanded international investment in utilities and myriad state-owned enterprises but has little appetite for removing bureaucratic impediments and tackling corruption.
Cameroon has a unique mix of natural resources and geography that make it attractive to investment. The country shares a 1,000-mile border with Africa’s largest economy, Nigeria, and is the economic engine of the Economic and Monetary Community of Central Africa (CEMAC). Cameroon is a bilingual country, with significant swathes of the population speaking French and English. Continued conflict in the two Anglophone regions and the incursion of Boko Haram and ISIS-WA in the Far North undermine the country’s security. State-owned companies with monopolistic power often function as regulators in various sectors and distort the business climate. Cameroon struggles with rampant corruption which pervades an inefficient and slow public administration. The result is underinvestment in infrastructure, education, and health.
Sectors that have historically attracted significant investment are:
Extractive Industry (Oil/Gas, Mining, Timber)
Cameroon has been an oil exporter since 1977. Oil production has stagnated as prices fluctuated, but the country can count on untapped gas reserves estimated at 3.5 billion cubic meters, according to the U.S. Energy Information Administration. The government dominates the sector and generally operates a revenue-sharing business model with foreign investors. Cameroon also has dozens of deposits of valuable minerals, including gold, cobalt, magnesium, nickel, iron, and bauxite. Cameroon’s immense tropical rainforests contain valuable hardwoods and softwoods.
Agriculture
The Cameroonian government has invested heavily in agriculture over the past 30 years, with minimal results. Cameroon is often described as the breadbasket of Central Africa because it supplies foodstuffs to Nigeria and CEMAC members. Market opportunities exist in the transformation of raw crops into finished or semi-finished products. Access to credit, poor infrastructure, securing land rights, and ongoing fighting between separatists and government security forces in the cocoa and coffee-growing regions are significant obstacles.
Information & Communication Technology
Information and communication technology is the fastest growing economic sector in Cameroon, though internet penetration is still one of the lowest in sub-Saharan Africa. The mobile sector is still concentrated in the hands of four companies, including the state-owned Cameroon Telecommunication (CAMTEL), which also functions as the market regulator. Despite CAMTEL’s monopoly on the communication backbone, including underwater fiber optic cables, faster internet broadband and 3G-4G offer lucrative investment opportunities.
Banking and Finance
The financial sector of Cameroon has 15 banks, 26 insurance companies, a state pension fund, and a state-owned mortgage bank. In addition, the country has over 400 microfinance institutions, a state-owned postal bank, and a nascent stock market based in Douala. According to the International Monetary Fund, total financial assets represent 40 percent of national GDP, two-thirds of which is held by banks. Less than 15 percent of Cameroonians have access to financial services. There are investment opportunities in subsectors of the financial industry, particularly in conventional banking, risk protection, or in the increasingly popular mobile money business.