2017 Investment Climate Statements: Cameroon

Policies Toward Foreign Direct Investment

The Government of the Republic of Cameroon (GRC) continues to rely on foreign direct investment (FDI) to sustain economic growth and build vital infrastructure projects in the country. In 2016, the GRC undertook many initiatives to attract FDI. On March 2016, Cameroon organized the first edition of “Invest in Cameroon,” an investment forum, held in Yaounde, Cameroon to attract foreign direct investment in Cameroon. On September 2016, President Biya took part in the second 2016 U.S.-Africa Business Forum organized by Bloomberg Philanthropies and the U.S. Department of Commerce. The Forum focused on trade and investment opportunities on the continent for African heads of government and American business leaders. During the event in New York, President Biya made a case for Cameroon as a good destination for FDI. Throughout 2016, the government also hosted business delegations from many countries, notably Tunisia, France, Belgium and Great Britain.

On October 20, 2016, Cameroon officially became the host of the Africa office of the European Investment Bank (EIB), following a cooperation agreement with Cameroon. The EIB has a portfolio of investment in Cameroon which spans many sectors. In February 2017, Cameroon hosted “Promote 2017—International Exhibition for Enterprises and Partnerships,” the largest trade fair in Central Africa, to which 22 U.S. companies took part alongside many hundreds of domestic and international companies. Finally, President Biya visited Italy from March 18-24, 2017 with a large delegation of economic and sector ministries. During an economic meeting with Italian business leaders, President Biya told the audience that Cameroon has a wide range of investment opportunities that leverage its strategic geographical location in the sub-region. According to the Cameroon Ministry of Economy, FDI was about 18 percent of the GDP in 2015/2016.

Cameroon does not have laws that prohibit, limit or condition foreign investment in a sector of the economy. However, the investment code has a number of general minimum requirements, which can also qualify the investor for some benefits. Local content, specifically in terms of local jobs going to Cameroonians, is increasingly becoming a requirement although it is not yet enshrined in a law. In general terms, the four criteria, though not obligatory, required to benefit from the code are (i) the number of local staff employed, (ii) the percentage of exports, (iii) the use of local natural resources and (iv) the value-added contribution to the economy.

The Cameroon Investment Promotion Agency (CIPA) in collaboration with other authorities is in charge of implementing these measures. The CIPA’s objective is to contribute to the development and implementation of government policy in the field of investments promotion. CIPA promotes the image of Cameroon abroad, contributes to the creation of an enabling business environment in Cameroon, and proposes measures to attract investors as well as improve the implementation of sector codes. The GRC prioritizes and maintains ongoing dialogue with investors through private-public formal and informal institutions. An example of these institutions is the Cameroon Business Forum, which works to improve the business climate. Another example is the Groupement Inter-Patronal du Cameroun (GICAM), Cameroon’s largest business group, which also works with government to address specific sector issues. The GRC also consults businesses on a broad range of issues such taxation, industrial and labor regulations.

Limits on Foreign Control and Right to Private Ownership and Establishment

In Cameroon, foreign businesses can set up and totally own their businesses. There is no strict or compulsory requirement to have a local partner. Subject to specific sector regulations, companies can engage in all forms of remunerative activities. There are no limits to foreign ownership or control. The State of Cameroon is the main economic actor in sectors such as upstream oil, telecom infrastructure and electricity production. These sectors have specific regulations detailing the conditions under which the private sector may invest. These regulations are not outright prohibition, but the State may grant a license (telecom) or operate through a production sharing contract (oil and gas sector). The government may screen some investment proposals in the context of standard due diligence in order to verify the credentials and professional competence of investors or investing companies. The GRC does not impose restrictions on outward or on inward investment.

If an investor cannot own the assets that it has built in Cameroon, the public private partnership (PPP) framework offers opportunities for a “Build, Operate and Transfer” (BOT) model, which enables investors to recoup their investment over time. The PPP framework is the main model recommended for foreign direct investment in large infrastructure projects. The government PPP Commission claims to have approved PPP projects worth USD 500 million since its creation.

Other Investment Policy Reviews

In recent months the Government of Cameroon and donors have conducted several economic policy reviews in the aftermath of the collapse of the oil prices. As a result of the collapse, national debt has increased to 30 percent of the Gross Domestic Product (2016), which prompted the International Monetary Fund (IMF) to downgrade Cameroon risk profile from “moderate” to “high” in the IMF debt rating. However, Cameroonian authorities argue that most global sovereign rating agencies maintained Cameroon’s rating in 2015/2016 and that the GRC debt management mechanisms enshrined in the National Debt Committee and debt monitoring institution “Caisse Autonome D’Amortissement du Cameroun” (CAA) are robust.

Standard & Poor’s credit rating for Cameroon stands at “B”, Moody’s at “B2”, while Fitch’s credit rating for Cameroon stood at “B.” All three agencies forecast a “stable outlook” for Cameroon. Authorities have endeavored to reassure investors and donors by indicating that the country is “borrowing cautiously and spending wisely.” Cameroon is currently undergoing another quasi investment policy review in the context of an imminent structural adjustment program from the IMF. Cameroon and other member countries of the Central African Economic and Monetary Community (CEMAC) agreed in December 2016 to engage with the IMF to find ways to overcome macroeconomic instability caused in part by collapse of commodity prices.

The IMF indicates that, while the Cameroonian economy has weathered these recent external shocks thus far, with economic growth remaining relatively robust, public debt has spiked rapidly causing the widening of fiscal deficit. Under the three-year plan being considered, the government will focus its attention on stabilizing public finances and boosting infrastructure projects. These infrastructure projects are expected to generate and sustain growth. During this process, Cameroon must also manage domestic security issues in the Far North Region (FNR) and also a defiant Anglophone population, which is protesting against what English-speaking Cameroonians perceive as their socio-economic and political marginalization. Although the Anglophone crisis appears non-threatening for the ruling party in terms of holding on to power, it could serve as a catalyst for more general protests against bad governance and corruption, to thereby become a driver of a larger civil society movement of discontent. The Anglophone regions are suffering some economic distress due to restrictive measures imposed by the GRC and blocking of the Internet, but there is some recent movement by Ministry of Justice and the Presidency to resolve social and political issues.

According to the IMF, the government has continued to spend heavily in order to support economic growth and address insecurity in the Far North Region. Military spending is leading to an increase in public debt (which reached an estimated 30 percent of GDP in 2016, from less than 20 percent of GDP in 2013). Assuming that a deal is finalized with the IMF, this will be the first time that Cameroon has resorted to IMF financial support since its previous three-year extended credit facility arrangement expired in January 2009. In February, the Ministry of the Economy (French acronym “MINEPAT”) presented the IMF with a 2017‑19 crisis management plan, which contains proposals for additional macroeconomic measures.

Cameroon’s economic performance is supported by some relatively strong internal factors. The government of Cameroon describes Cameroon as the “land of attractiveness for investors.” The government justifies this by the strategic location of the country. Indeed, in addition to the 1,700 km border it shares with Nigeria, Africa’s large economy, which gives direct access to 180 million potential consumers, Cameroon is also at the intersection of two economic zones, namely the Economic Community of Central African States (CEMAC) and the Economic Community of West African States (ECOWAS). Together, the two economic zones have a consumer market of over 300 million people. Cameroon also harbors substantial natural resources (17 million of exploitable forest, a large variety of extractive resources including cobalt, iron and gold, and vast arable land with excellent rainfall). Politically, Cameroon has a reputation of being politically and socially stable in a turbulent region and has recorded a sustained economic growth of over 5 percent since 2013. The sectors that are driving this growth are agriculture, services, transportation and Information & Communication Technology (ICT). This economic growth is underpinned by an emerging consumer culture. More than 50 percent of the population is under the age of 25. Unlike their parents, young people want the latest technological gadgets. They are brand conscious, want to live in urban areas, and are increasingly shopping on the Internet.

Cameroon important economic sectors and their contribution to the GDP (2013)

Business Facilitation

In order to facilitate the creation of businesses Cameroon has business creation centers around the country. These are known in French as the Centres de Formalites de Creation d’Entreprises (CFCE), which can finalize the creation of a new enterprise within 72 hours. The CFCE also provides start-up tool kits for new entrepreneurs, and is referred to as a “one stop shop” for small to medium enterprises. Cameroon is also a member of the Organization for the Harmonization of Business Law and Accounting in Africa (known by its French Acronym OHADA). The objective of OHADA is to create a better investment climate by regional standardization of laws so as to attract investment and to foster more economic growth in the markets of the seventeen (17) OHADA member countries.

Cameroon’s ministry of small and medium size enterprises is developing an online business registration process. The government is assisted in this project by the United Nations Conference on Trade and Development (UNCTAD). More information can be found on https://businessfacilitation.org/countries/ .

https://www.cfce.cm/  Centres de Formalites de Creation d’Entreprises (CFCE) provide a business toolkit to entrepreneurs.

http://www.statistics-cameroon.org/  The Institute of National Statistics provides quantitative indicators on the economy and sectors.

www.apme.cm/  This agency for the promotion of small and medium size enterprises is specifically dedicated to the promotion and support for small and medium size enterprises.

Outward Investment

Although the priority for the government of Cameroon in to attract inward investment, the country does not restrict domestic investors from investing abroad. There are a few Cameroonian companies that have expanded across Sub-Saharan Africa, Europe and Asia. Afriland First Bank is a full-service bank in Cameroon, with subsidiaries in 14 African countries with the holding company based in Switzerland. Another Cameroonian company in the instant money transfer business, Express Union is present in 10 African countrie. Tradex, a subsidiary of the State-owned national oil company Societe National des Hydrocarbures (SNH) has invested in neighboring Central African Republic and Chad. Further examples can be seen with the Societe des Brasseries du Cameroon (SABC), the largest beer brewery in the country. SABC is now owned by the French group CASTEL after the State sold shares to the French family owners. SABC is listed in Paris and on the New York Stock Exchange.

• Belgium-Luxembourg: Convention between the Union Belgo-Luxembourg Union for the reciprocal promotion and protection of investments 1980
• Canada: Investment Promotion and Protection Agreement (FIPA) in Toronto on March 3, 2014
• China: Bilateral Investment Treaty Agreement signed on May 10, 1997
• Egypt: Memorandum of Understanding with the General Authority for Investment
• Germany: Treaty between the Federal Republic of Germany and the Federal Republic of
• Cameroun 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)
  Agreement between the Government of the Republic of Italy and the Government of the Republic of Cape Verde on the reciprocal promotion and protection of investments 12/6/1997
• Mali: Cultural Agreement and Commercial agreement signed March 17, 1964 in Bamako
• 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 signed in Rabat on June 25, 1974
• Netherlands: Agreement signed in 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 30.8.1980)
• Switzerland: Cameroon-Switzerland Bilateral Investment Treaty signed in 1964
• Turkey: Turkey and Cameroon signed a number of agreements, including Cultural and Scientific Cooperation Agreement on (March 06, 2002), Trade, Economic and Technical Cooperation Agreement on (March 04, 2002), Joint Economic Commission Protocol on (July 08, 2003)
• United Kingdom: Agreement between Great Britain and the Government of the United Republic of Cameroon for the Promotion and Protection of Investments March 04, 1982
• United States of America: The U.S. and Cameroon signed a Bilateral Investment Treaty (BIT) in 1986 that came into force in 1989
• Cameroon is not on the list of countries which have signed an FTA with the U.S., nor the list of countries which have Bilateral Taxation Treaties with the U.S.

Transparency of the Regulatory System

The World Bank Doing Business 2017, found persistent challenges in enforcing contracts in Cameroon. Globally, Cameroon stands at 160 in the ranking of 190 economies on the ease of enforcing contracts. However, the report also indicates that Cameroon made enforcing contracts easier by creating specialized commercial divisions within its courts of first instance. Cameroon has transparent policies and effective laws to foster competition on a non-discriminatory basis. Officials argue that these are indicators of “clear rules of the game.” But operationally and in practice, the courts have severe logistical challenges. For example, courts data are manually recorded because the legal system is not computerized. In many courts around Cameroon, court records are filed in paper and stored in folders, which make them subject to fire and deterioration.

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). But 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, GRC 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, the U.S. accounting standards) and suitable international standards, and another set to address the OHADA standards and GRC reporting requirements.

In view these dysfunctions and weaknesses in the courts, arbitration is increasingly becoming the solution of choice to solve business disputes. It is possible in Cameroon to solve some complex legal disputes through arbitration. In fact, arbitration exists in the OHADA corporate law. Since OHADA is a supra national law, Cameroon is bound by its decisions which follow international norms.

The Parliament of Cameroon is the source of all regulatory powers. The ministries initiate draft laws for different areas of the national life. A few laws are reviewed on a yearly basis. This is the case for the public finance law, which was just revised and published in both English and French in 2017. Institutions and groups can also initiate legislation. In rare cases, draft bills or regulations are made available for public comment and there is some level of consultation process. The National Institute of Statistics provides quantitative analysis that may be used during the review. However, public involvement in Cameroon is limited and oversight or enforcement mechanisms are weak, and therefore do not ensure that governments follow administrative processes. Appeal and pressure mechanisms are limited if the government does not consider the observations of civil society groups in the final draft. Consequently, the executive branch is responsible for 98 percent of laws, including the most relevant texts for businesses.

Typically, the legal texts submitted to parliament by the executive are voted unchallenged because of the powerful majority of the ruling party in the legislative body. After voting, the texts are recorded in the Official Journal, which is the official register of the Cameroonian government. The Official Journal is a paper-based record system. The State does not have an electronic or online version. The legislation process is completed when the President of the Republic issues an implementation decree (Executive power), which generally details the ways in which the law will be implemented. The power to issue decrees grants a high level of influence to the Executive branch, on the final version of the laws because the decree may either strengthen or weaken the implementation of law. This is because individual ministries and bodies in the civil administration, which are parts of the executive arm, are responsible for the effective implementation of individual laws and regulations. In some cases, as the execution of the laws evolves from the center (the executive and the legislative) to the lowest level of administration, or from urban cities to the rural areas, their strength, effectiveness and understanding tend to weaken.

Over the past few years, with the support of donors for capacity building, Cameroon has undertaken reform to improve the efficiency of the legal system and of public finance procedures. Some of the reforms are supported and funded by multilateral and bilateral donors. The reform of the budget process, which helped Cameroon to introduce “Program Budget,” for example, is now in full swing. If fully implemented, many areas of the public finance reforms could have a positive impact on foreign investors, create a better investment climate and lead to more broad-based inclusive growth.

International Regulatory Considerations

Cameroon is a member of the CEMAC. The treaties of this regional body supersede the laws of the member states. Cameroon is also a member of the United Nations system and a party to many international conventions. Cameroon has been a member of World Trade Organization (WTO) since 13 December 1995 and a member of GATT since 3 May 1963.

Legal System and Judicial Independence

The Cameroon legal system is a blend of Roman or common law and Cameroonian judges are fluent, well-trained and competent in the two systems. Courts are structured in a pyramidal way with the Supreme Court functioning as the highest court in the land. Regulations and enforcement actions are appealable and can be adjudicated in the national court system. Contracts are enforced through the courts or through arbitration. The country’s commercial law is the OHADA law.

The head of the executive power, namely the President of the Republic is also the Supreme Head of the Judiciary. This constitutional status gives the executive branch immense powers to influence the functioning of the judiciary matters. This influence can be exerted through his power of appointment. The President of the Republic can appoint and demote judges, and he can decide on the internal and territorial deployment of legal institutions such as courts. In the absence of proper checks and balances the current judicial process in unpredictable. The outcome of legal processes are uncertain because judges are not immune from pressure or from simple logistical challenges such as the lack of computers to electronically and digitally process court documents.

Laws and Regulations on Foreign Direct Investment

The Law No. 2013/004 of 18 April 2013 defining incentives for private investment in Cameroon proposes common and special incentives while indicating the State’s commitments with regard to private investors in Cameroon. This important law remains valid for domestic and foreign investors. Additional laws and regulations are available on the website of the Cameroon ministry of finance (http://www.minfi.gov.cm/index.php/en/documents ). In addition to these sources, the Investment Promotion Agency offers a “one-stop-shop” website for investment, with relevant laws, rules, procedures, and reporting requirements for investors http://www.investincameroon.net/home2/ ).

Competition and Anti-Trust Laws

The National Competition Commission (of the Ministry of Commerce) is the official body in charge of competition regulations.

Expropriation and Compensation

Decree N°.87-1872 of 16 December 1987 and the subsequent implementation decree N°.85-9 of 4 July 1985 lay down 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 general public interest, the State may expropriate any person or entity from privately owned land. The laws also lay down 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 generally 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. In practice, over the past 10 years many cases of compensation procedures have been marred in serious corruption schemes masterminded by civil servants in charge of the process. These incidents have significantly diluted the trust in the whole process throughout the country.

Dispute Settlement

ICSID Convention and New York ConventionInternational

Cameroon ratified the “International Centre for Settlement of Investment Disputes” (ICSID) Convention on 3 January, 1967 and the New York Convention on 19 February, 1988. But 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 located 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.

International Commercial Arbitration and Foreign Courts

There have been cases of disputes between Cameroonian partners and U.S. companies, but they tend to be solved through arbitration. General misunderstandings between partners about contractual commitments tend to cause conflicts. But such cases have been infrequent over the past 10 years. Issues related to Bilateral Investment Treaty (BIT) or Free Trade Agreement (FTA) with an investment chapter with the United States, have thus far not emerged in claims by U.S. investors. Local courts may recognize foreign arbitral awards issued against the GRC, but they are not well equipped to enforce such decisions. In general, foreign investors complain more about administrative harassment or bottlenecks, and less about extrajudicial actions.

The Embassy has been successful in engaging and reaching out to key government officials when U.S. companies face disputes or harassment. In practice, the duration of dispute resolution will depend on the complexity of the case, and no standard timeline exists or can be estimated. This alternative approach can be further complicated by the inherent dysfunctions within the public administration, such as bureaucratic red tape, corruption, and lack of technical expertise on modern commercial contracts.

Additional alternative dispute resolution may involve mediation and negotiations, also possibly through third-party binding arbitration. The OHADA system serves both as domestic and primary reference legislation. However, the Groupement Interpatronal du Cameroon (GICAM), the country’s most powerful business lobbying group, has an arbitration center (Centre d’arbitrage du Groupement interpatronal du Cameroun), which is based in Douala. Douala is Cameroon’s largest city and trade hub, and the arbitration center is modern and well-equipped.

As a treaty, the OHADA prevails 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 a remit covering all the OHADA states. Judicial processes are bureaucratic, expensive, time-intensive and lengthy to pursue. 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.

Bankruptcy Regulations

Cameroon has bankruptcy laws, which recognize the right of creditors, the equity of shareholders and other types of liabilities. Bankruptcy is not criminalized, if it is not a deliberate collusion to avoid tax or mislead investors. Globally, Cameroon stands at 122 in the ranking of 190 economies on the ease of resolving insolvency. According to data collected by Doing Business 2017, resolving insolvency 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 as piecemeal sale. The average recovery rate is 15.8 cents on the dollar.

Investment Incentives

Cameroon’s 2013 investment law lists several types of investment incentives for investors and also specifies the conditions that they have to meet, in order to benefit from those incentives. This law lays down incentives applicable to Cameroonian or foreign legal entities, whether or not 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, this law seeks to facilitate, promote and attract productive investment in order to develop activities geared towards strong, sustainable and shared economic growth as well as job creation. In a context where businesses have to navigate between national and regional incentives, U.S. companies and investors must seek local and regional expertise if they plan to operate in the economic zone of Central Africa (The Economic and Monetary Community of Central Africa).

http://investincameroon.net/fr/download/law-n-2013004-of-18-april-2013-to-lay-down-private-investment-incentives-in-the-republic-of-cameroon .

Common incentives:

Common incentives are granted to investors during the establishment and operation phases. The investor may, during the operation phase, which may not exceed 10 (ten) years, according to the scale of investment and expected economic returns, as applicable, 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 5 (five) graduates each year, (2) combats pollution, and (3) develops public interest activities in rural areas.

Tax and customs incentives:

The investor shall enjoy the following benefits during establishment phase, which may not exceed 5 (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 is 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; and
• Immediate removal of equipment and material related investment program during clearance operations.

Administrative incentives:

Subject to the fulfillment of the obligations incumbent on them, notably with respect to the exchange rate regime and the tax legislation, investors may enjoy the following benefits:

• 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 such;
• 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.

Also, 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 Enterprise (SMEs).

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 handicraft;
• Development of housing, including social housing;
• Promotion of agro-industry, 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;
• 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 FTZ 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.

Performance and Data Localization Requirements

The government of Cameroon does not mandate local employment except as an incentive to entice foreign investment. The government of Cameroon encourages investors to create jobs and employ local labor. These are not compulsory and there are no legal restrictions on senior management and boards of directors either, although local content (goods, raw material, technology and manpower) tend to 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 our 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.

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. Cases of “forced localization” have not been reported and the government has not stated intentions to maintain, increase or decrease performance requirements.

Foreign information technology (IT) providers are not required to turn over source code and/or provide access to encryption. But they can be required to provide such data in cases of cybercrime under the national cybercrime law. The same legal principle applies to the transfer of business-related data. On the other hand, the government is trying to build data storage centers in order to manage IT data. In the meantime, all cellphone users have a legal requirement to register their phone number with the government.

Real Property

Interests in property are recognized in the law. For mortgage transactions between two private parties, a proper contract is required for the agreement to be binding and enforceable in the courts. Liens have to be recorded in the contract. A registry of land title exists in Cameroon. The land rights of indigenous peoples, tribes or farmers are recognized in the Constitution.

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 had been issued. On average, this represents approximately 1,000 titles per year, covering less than 2 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. Existing legislation does not discriminate against foreign land owners but land disputes are common between 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 stands at 177 in the ranking of 190 economies on the ease of registering property.

Intellectual Property Rights

The legal structure for Intellectual Property Rights (IPR) and corresponding enforcement mechanisms are weak. Infringement on IPR is especially common in the media, pharmaceutical, software, and print industries. No new laws have been enacted in the last year, and IPR protection remains uniformly weak. The country occasionally seizes and publicly burns counterfeit goods, but these actions are not systematically documented, and no cumulative data exists on the seizures. Imported counterfeit goods, such as fake luxury watches, clothes, copied movies in DVDs and music-CDs are prevalent in the local market. Customs officers have authority to seize, store and then eventually destroy these counterfeit goods. National institutions are overwhelmed by the problem and have no influence on the countries of origin for problems, notably China, India, Nigeria, and Pakistan. Cameroon is not listed in the 2014 Special 301 Report or the Notorious Markets Report.

https://ustr.gov/sites/default/files/ USTR%202014%20Special%20301%20Report%20to%20Congress%20FINAL.pdf 

Customs officers have seizure authority, but destruction is deferred until detailed review of the property is made by officials, transparent to the property owner and/or rights holder. The following are common items that are seized:

• Counterfeit medication
• Pirated music, films and software
• Fake copies of luxury consumer goods (clothes, shoes, glasses, watches, perfumes)
• Fake car tires simulating major brand names
• Fake spare car parts

Report from the World Intellectual Property Organization (WIPO) shows the following data for Cameroon:

Cameroon is a member of the African Intellectual Property Organization (OAPI –Organisation Africaine de la Propriete Intellectuelle), the main organization that ensures the protection of intellectual property rights in most African Francophone countries. OAPI is located in Yaounde. Individuals and companies can register their IP and brands directly at the OAPI.

Once registered there is legal protection and recourse for the inventor or IP rights holder, although protection is realistically more limited once commercial products reach the market.

IP protections are deteriorating in Cameroon because of the influence of supply countries such as China and India, both of which illegally export volumes of counterfeit goods. For additional information about treaty obligations and points of contact at local IP offices, please see WIPO’s country profiles at http://www.wipo.int/directory/en/ . Cameron does not appear to be listed in the notorious market report in 2016.

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/ .

Capital Markets and Portfolio Investment

Cameroon is open to foreign investment and has been able to attract well known global brands that have invested in the country. U.S. companies such as General Electric, Boeing, Microsoft, and Oracle all have large projects in Cameroon. There are no governmental restrictions at this time and no policy obstructions are interfering in the investment markets. In October 2016, JP Morgan led senior executives from five investment management companies to Cameroon. These investment firms which comprised Franklin Templeton Investments, Fidelity, Lazard Asset Management, Grantham Mayo van Otterloo & Co. (GMO) and Alliance Bernstein (A/B Global) comprise collectively around USD5.3-Trillion in assets under management, with about USD 145-million USD already invested in Cameroon. Another group of prospective investors led by Citi Bank visited Cameroon in late October 2016. Collectively, this group represents a portfolio of USD 3.5 Trillion in assets under management. At least three major U.S. investment funds invested USD 145 in Cameroon’s first Eurobond which was issued in 2015.

The Douala Stock Exchange (DSX) is one of the youngest stock exchanges in Sub Saharan Africa. It was created in 2001 and currently has only three companies listed and five sovereign bonds. The regulatory system of the DSX permits portfolio investment, but the market is still in its infancy, suffering from low liquidity and bureaucratic inertia.

International capital market actors, more precisely private equity firms, operate in Cameroon. These new actors are enabling the connection of Cameroon to larger international investors. There are also major bank credit instruments available on the open market and venture capital operations are gaining traction in the Cameroon business sectors. Foreign investors can get credit on the local market and the private sector has access to a variety of credit instruments. Cameroon is connected to the international banking payment systems and there are no government restrictions on payments or transfers. The banking system is regulated by the regional six member country Central Bank (French acronym “BEAC”) called the Bank of Central African States. The bank follows IMF standards. Foreign investors – including from the U.S. as well as international banks – that provide business credit, personal finance, and even mortgage instruments on real estate, are beginning to show great interest in Cameroon.

Money and Banking System

The banking sector is regulated, but financial institutions tend to suffer from under-performance on local debt and un-serviced loans from both commercial and individual debtors. Less than 10 percent of Cameroonians have access to banking services. According to the World Bank, non-performing loans were 10.31 percent of total bank loans in 2016.

1. Afriland First Bank Group (USD 2.3 billion, 2011) is a large financial services provider in Cameroon with customer deposits in excess of USD 951 million (CFA: 460 billion), as of December 2012
2. Banque Internationale pour l’Epargne et le Credit (USD 2.1 billion 2011)
3. Societe Generale de Banque au Cameroun (USD 972 million 2011) with global assets of €1.308 trillion (2014)
4. Standard Chartered Bank Cameroon (USD 706 million 2011)
5. Ecobank (USD 508 million 2011) with total assets of USD 22.5 billion (2013)

The Bank of Central African States (Banque des Etats de l’Afrique Centrale, BEAC https://www.beac.int/ ) is the central bank that serves six central African countries that form the Economic and Monetary Community of Central Africa (CEMAC) including Cameroon, Central African Republic, Chad, Equatorial Guinea, Gabon, and the Republic of Congo. BEAC has been in operation since 1972, although rocked by a few embezzlement scandals in 2009 and 2010. The current governor of BEAC is Lucas Abaga Nchama (from Equatorial Guinea).

There are no restrictions on foreigners establishing bank accounts, credit instruments, business financing or other such transactions. Rules on all forms of mergers and acquisitions, including hostile, are governed by OHADA and are detailed in a lengthy body of commercial, legal and accounting codes. The OHADA sections on mergers and acquisitions are the Napoleonic version of our SEC regulations.

Foreign Exchange and Remittances

Foreign Exchange

There are no restrictions or limitations placed on foreign investors in converting, transferring, or repatriating funds associated with an investment. Funds may be converted to any world currency. The national (regional) currency, the Central African CFA Franc, (or the “CFA”) is pegged to the Euro and fixed at a specific rate. The Central Bank controls monetary policy, follows IMF standards, and is independent from member states.

Cameroon has not passed any laws which change or tighten access to foreign exchange for investment remittances. There are no time limitations on transactions beyond the classic banking transactions timeline. Remittances policies and banking transactions are regulated by the regional Central Bank. Foreign investors can remit through convertible and negotiable instruments through legal channels recognized by the regional central bank. Any incidence of currency manipulation tactics is handled by the regional central bank.

The 2015 Finance Bill increased taxes on each external outbound transfer by 33.33 percent, causing the suspension of all outbound transfers of top international operators namely Western Union, MoneyGram, Ria, Sigue, and Money Express, and also for the their agents & sub-agents. The measure also had another unintended consequence, to the extent that it has stimulated informal transfers or quasi “black market” activities especially, on the Cameroon- Dubai and Cameroon-China corridors.

Remittance Policies

Domestically, the remittance market is expanding. Cameroon currently counts more than 6 million registered mobile money subscribers. In addition, 1.5 million people are using 4 digital solutions currently offered by banks and mobile phone companies, namely ATM, mobile wallet, mobile debit card and website. These systems are supporting various forms of remittances and financial services.

Soverign Wealth Funds

Cameroon does not have a sovereign wealth fund.

The Government of Cameroon has over 130 state owned enterprises (SOEs) in which it has majority ownership, and which operate in more than 8 key sectors of the economy including strategic ones such as agribusiness, energy and mining. SOEs are also present in real estate, transportation, services, information & communication, finance and travel (tourism).

In Cameroon, a State-Owned Enterprise (SOE) is an enterprise partly or totally owned by the GRC. Some SOE are profit oriented (70 percent), while others are set up to provide public services. In other cases, SOEs themselves are so dominant, because of their quasi-monopoly, that they often act as de facto regulators, for example in telecom and in the media. Data on SOEs’ R&D and share of public contracts are not publicly available. Inside the GRC’s portfolio of companies, there are intricate cross-holdings, whereby various state institutions mutually hold equities in SOEs. Shareholders in SOEs include the National Hydrocarbons Company (SNH), the Hydrocarbon Price Stabilization Fund and the National Social Security Fund, which together have stakes in more than 30 state-owned entities. The largest holdings are controlled by National Investment Company (NIC) with shares in more than 32 enterprises. In 2010, the NIC valued the GRC’s stakes to be worth USD 516 million or one fifth of the national budget.

Operationally, the private sector enjoys technological competitive advantages and flexibility to respond to market conditions that bureaucratic and over-staffed SOEs cannot replicate. Delivery of products and services to the markets still depends on price-competitiveness and quality of goods offered, so inferior SOE products and services (e.g. Internet, cable television and cellular telephone offerings) face legitimate private-sector competition. The government does not publish data on percentage of expenditures SOEs allocate to research and development. SOEs can source equipment, purchase goods, and acquire services from the private sector, including overseas providers in the United States.

Financially, some SOEs have a legal ability to contract debt and, in so doing, generate contingent liabilities for the state. 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 subventions. Private companies do not automatically have such advantages. The Audit Chambers of the Supreme Court of Cameroon indicates in its yearly reports that SOEs are not financially transparent. Only about 22 percent of these structures publish financial accounts. Other reports have highlighted corruption cases involving managers of SOEs and unveiled inefficiencies, severe dysfunctions and opacity of the management of SOEs. These problems are exacerbated by the fact that over the past years, the government has not imposed 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, they 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).

Cameroon is an observer under the World Trade Organization’s Agreement on Government Procurement (GPA), but SOEs may receive a larger percentage of government contracts/business than their private sector competitors, as it is not clear if SOEs are covered under the agreement.

In Cameroon law, ownership in SOEs is regulated by laws. The government claims that its regulations and codes comply with international standards, but over the past two decades the regulations and code governing SOEs have become obsolete since they were introduced when the GRC was the dominant economic actor in most sectors. Since then, new actors, notably domestic and international private companies, have emerged and are finding it difficult to compete in a landscape where the GRC maintains specific privileges in the name of the public good on behalf of non-transparent SOEs.

Although individual SOEs are generally placed under the tutorship of a sector ministry, the entire portfolio is heavily centralized. The management reports to line ministries but the board of directors are directly appointed by the President of the Republic who also determines the corporate governance structures. The Technical Committee for Rehabilitation within the Ministry of Finance is responsible for the financial surveillance. Most board members are former ministers or leading members of the central committee of the ruling party appointed by the President. In most cases they do not have the expertise, experience and sound understanding of the enterprise or sector they are required to serve in. This misalignment of competence affects the performance of SOEs. In a 2016 report, the International Monetary Fund (IMF) observed that the profitability and financial autonomy of SOEs have deteriorated in recent years, draining scarce budget resources, partly because of weak corporate governance.

Privatization Program

Cameroon enacted major privatization policies in the 1990s and early 2000 under the purview of international donors such as the International Monetary Fund and the World Bank. The process has been stalled for over a decade, but market pressures continue to mount for additional privatization efforts. Data shows that GRC had stakes in 171 entities in 2004. Since then, 30 companies had been privatized. An additional list of 10 companies have been scheduled for privatization since 2005 (examples CAMAIRCO, CAMTEL, SCDP, SODECOTON) for more than ten years.

In general privatization appears to on hold. The government favors Public Private Partnership (PPP) 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 take participation in ventures, such as mining companies, rather than creating a state-owned company. The framework for PPP can be found at http://www.ppp-cameroun.cm/uploads/Telechargements/cadre-juridique-des-PPP-recueil-des-textes-en.pdf .

This is evident in the oil and gas sector, where the government has a dominant presence in extraction, refinement, distribution, and storage of oil and gas. Similar dominant positions exist in other sectors of the economy – particularly transport. The GRC controls the vast majority of transport infrastructure (airports, seaports, and road networks) through companies such as Cameroonian Airline Company (Camair-Co), Cameroonian Shipping Lines (CAMSHIP), Cameroon Shipyard and Industrial Engineering Ltd. (CNIC), and Cameroon Rail Network (CAMRAIL).

Moreover, in addition to the 119 SOEs featured in a recent survey by the IMF(2015), the government of Cameroon has in recent years expanded its foothold in the most important economic sectors. In financial services, the GRC is creating two new banks to fund agriculture and provide finance for small and medium size enterprises. These new State-funded banks will compete with 13 already existing domestic and international private banks. In the energy sector, the government created the Cameroon Electricity Transport Company (SONATREL), a wholly State-owned company to manage electricity infrastructure. Similar plans are underway to allow the Electricity Development Corporation of Cameroon (EDC) to become a water marketer for hydroelectric dam operators. In manufacturing, the GRC is setting up a fertilizer plant with a German firm, an agricultural tractor assembly plant with India, and cement factories with Nigerian and Moroccan firms. In some sectors, this dominant position of the State could distort the competitive landscape.

Foreign investors can participate in the privatization programs. According to some analysts, of the 30 State-owned companies privatized by 2004, the majority (22) were won by foreign bidders. 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 very large scale projects. The listing of public tenders in the Cameroon Tribune newspaper and publication of which firms received the contract will not, in and of themselves, result in a fully transparent process of awards. Many other practical problems may continue years after the contract has been granted. This is the case in some large government projects where the government has accumulated arrears payments to major road construction companies causing delays and in some cases severe financial stress to the contractors.

Responsible business conduct is not regulated by law in Cameroon. However, the GRC has enacted laws that cover issues related to what is locally considered “corporate social responsibility” or CSR. 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. A Ministry of Environment and Forestry was created in April 1992 with a mandate to elaborate, implement and follow up the national policy of environment; a master law August 1996 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. Cameroon is also compliant with the Extractive Industries Transparency Initiative (EITI).

Cameroon works with non-governmental organizations and multilateral partners in the private sector to improve, monitor, and promote the effectiveness of legislation and the enforcement of laws on human rights. The country has a human rights commission, which strives to educate people, institutions and the private sector on these issues. However, the country faces challenges when it comes to implementing these principles in general, because of the dysfunctions in the legal systems, or when human right issues intercept with domestic political issues. In addition, the OHADA laws have provisions for corporate governance, transparent accounting, and fair executive compensation standards to protect shareholders.

In Cameroon, corruption is punishable under sections 134 and 134 (a) of the Pena1 code of Cameroon. From November 2012 to December 2015, 112 serious cases of corruption are in courts. Since then 14 more officials have been arrested and are on trial for corruption and embezzlement of public funds. Prior to these cases, the courts had judged and jailed senior government officials for acts of corruption. Since inception, the Special Criminal Tribunal has handled over 123 cases and recovered USD 5.5 million USD worth of state funds. Most legal observers estimate that this amount is minute compared to the huge sums allegedly stolen. The cases have revealed complex levels of collusion inside and outside the civil service. Embezzlements are fueled by several dysfunctions within the civil service, and an ambient environment of conflicts-of-interests, notably in government procurement and overall due to weak supervision.

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. The private sector is also infected although public institutions have historically been more vulnerable to corruption. The government has introduced anti-corruption mechanisms and measures for all economic actors, but provides little support to “whistle blower” cases and especially non-governmental organizations. However, in recent years, private companies have initiated their own peer anti-corruption sensitization measures. Cameroon is signatory to the United Nations and the African Union anti-corruption initiatives, but these international initiatives have practical limited effects on the enforcement of laws in the country. The newly formed Business Coalition Against Corruption (BCAC) is rapidly growing in private-sector membership and influence.

In the civil service, cronyism, nepotism, tolerance for serious conflicts of interest and also collisions to defraud the State abound. The government declares that it is committed to fighting corruption but appears overwhelmed by the daunting task, or complicit in the system of clientelism that harbors corrupt actors. In some extreme instances, civil servants blatantly violate laws and then offer bribes to State inspectors so that they are not investigated and prosecuted. It is a vicious cycle that replicates, metamorphoses, and perpetuates itself in an environment of apparent impunity. Officially, bribes are prohibited and the State has many institutions that are supposed to fight against systemic corruption. Cameroon has signed up to many international anti-corruption agreements. But this scourge continues to plague the civil service at almost every level (government procurement, award of licenses or concessions, transfers, performance requirements, dispute settlement, regulatory system, customs or taxation) with private companies paying a heavy price despite several anti-corruption initiatives by business groups.

Resources to Report Corruption

Rev. Dieudonne MASSI GAMS
Chairman
National Anti-Corruption Commission
B.P. 33200 Yaounde Cameroon
(+237) 22 20 37 32
www.conac-cameroun.net 
infos@conac-cameroun.net

Me Charles NGUINI
Country Representative
Transparency International Cameroon
Nouvelle route Bastos, rue 1.839, BP: 4562 Yaounde
(+237) 33 15 63 78
transparency@ti-cameroon.org

Cameroon is a peaceful country in a turbulent region. However, the country is facing domestic security challenges from the terrorist group Boko Haram, in the Far North of Cameroon. Also, since December 2016, the two English speaking regions of Cameroon have been rocked by social unrest. Anglophones claim that they are marginalized by the central government. Since then lawyers and teachers have been on strike and schools have been closed. Since January 2017, physicians and teachers of the French speaking regions have also periodically been on strike, generally over pay and working conditions. But some Anglophones want a return to a two state federation while other more extremists fringes of secessionists want total separation to form a new state. Although the likelihood of a split between the two communities is remote, the economy of the English speaking Northwest and Southwest regions has nearly collapsed. Outside of Cameroon, the crisis is seen as a domestic matter and the central government appears to have the crisis under control, although systematic clamp downs with massive arrests have prompted complaints of human right abuses. In the short term, the impact of this domestic crisis on foreign direct investments has been weak.

In the Far North and the English speaking regions, there are some disruptions to economic activities despite the measures taken by the government to limit the impact of the crises. There may be more turbulence ahead. Cameroon is heading into an electoral year with presidential elections scheduled for 2018. President Paul Biya, who has been in power for 34 year, is likely to bid for another 7 years in office. If elected, he will be 91 years old when his mandate ends. In 2008, opposition to his candidacy triggered unrest in the country for many months.

In Cameroon, over 50 percent of the population is under 25. The official unemployment is around 4 percent, although youth unemployment may be as much as 75 percent. The majority of youth who are qualified are under-employed in the informal sector. Unskilled labor is prevalent in the agricultural and service sector, and under-employment is prevalent in manufacturing, commerce, technician or technical trades, and mid-management jobs. A 2010 Survey of Employment and the Informal Sector (EESI) by the National Institute of Statistics revealed an unemployment rate of 3.8 percent based on International Labor Organization (ILO) standards. The study identified under-employment as a real challenge for employment policy makers in Cameroon, with rates of 12.3 percent and 63.7 percent, respectively for visible and invisible under-employment.

There are shortages of technical trade skills, for example, for maintenance and repair of industrial machinery, in every sector of the economy. Truck and automotive maintenance is widely practiced in the informal sector. Rudimentary or artisanal agriculture, fishing, and textile manufacture economic sectors are still in need of significant development, and a lack of skilled workers tends to be the norm across the country. The government of Cameroon does not require companies to hire nationals. However, foreign nationals are required 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 benefiting 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. Layoffs 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 IFZ. 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 through the regime of Industrial Free Zones to attract or retain investment. As indicated earlier, 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 labor unions that are independent, and others that are affiliated with the government under existing laws and regulations. Over 100 trade unions and 12 union confederations operate 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. For more information (see: https://www.ilo.org/dyn/natlex/docs/WEBTEXT/31629/64867/E92CMR01.htm )

The law provides for the rights to collective bargaining as a means to regulate labor relations between employers and workers. Workers are allowed to bargain collectively and re-negotiate past collective agreements from time to time. In case of an inability to conclude a collective agreement, the National Labor Advisory Board can issue a decree to establish a minimum wage for a particular occupation. In the context of rampant poverty, labor disputes tend to have socio-political ramifications beyond the boundaries of simple legal employment contracts. In February 2008, a strike by transportation workers who were opposing high fuel prices and poor working conditions triggered a series of violent demonstrations in Cameroon. In response to the protests, the government reduced the cost of fuel, reduced the duties paid on cement, suspended duties on essential goods such as cooking oil, fish and rice, as well as raised salaries of civil servants and military personnel.

The labor code differentiates between layoffs and firing (w/ severance). In all cases of dismissal, it shall be up to the employer to show that the grounds for dismissal alleged by him are well-founded. Whenever a contract of employment of unspecified duration is terminated without notice or without the full period of notice being observed, the responsible party shall pay to the other party compensation corresponding to the remuneration including any bonuses and allowances which the worker would have received for the period of notice not observed. Except in the case of serious misconduct, where a contract of employment of unspecified duration is terminated by the employer, the worker with no less than two successive years of seniority in the enterprise shall be entitled to severance pay distinct from pay in-lieu-of notice which shall be determined giving regard to the worker’s seniority. However, in most cases implementation of these decisions may take many years of negotiations often involving the Ministry of Labor, courts and social services.

The Cameroon labor market continues to be dominated by a large informal sector. According to the World Bank, a large section of the work force earns their living in the informal sector. Agriculture provides a large portion of informal jobs with over 70 percent of jobs performed informally. Other economic sectors which continue to feed this labor informality are telecommunications, manufacturing, construction, banking, and the hotel industry. The formal private sector and the public sector employ 4 percent and 6 percent of the workforce, respectively. Informality is often decried but it has instilled a culture of flexibility in the Cameroonian job market. Cameroon 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 dispute. There is informality even in the formal sector which is against the law. Despite this landscape, it is important for U.S. companies to ensure compliance with the local labor laws and to abide by international best practice which refer to the treatment of workers.

There is a gap in the supply and demand for labor in Cameroon. Often skills do not match the needs of companies, while the qualification of many job seekers may not be the ones needed by employers. This stems from the inadequacy or obsoleteness of the content of the educational systems. While the Cameroonian educational system has schools that can produce good engineers and doctors, there are few schools which provide training for technicians such as welders, plumbers, computer technicians and maintenance workers. Cameroon does not impose the hiring of nationals although some level of local content and transfer of skills tend to be positively perceived as elements of corporate social responsibility. There is no direct linkage between the labor code and incentives for FDI which are stipulated in a different law. The government expects foreign companies to also abide by all Cameroonian laws. In theory, the Labor Code provides a legal framework for the emergence of a flexible and efficient labor market, but such a market has not fully emerged. Cameroon is a party to the ILO Conventions 87 and 98 permitting the freedom to form unions and the right to collective bargaining.

In general, any individual dispute arising from a contract of employment between workers and their employers or from a contract of apprenticeship shall fall within the jurisdiction of the court dealing with the labor disputes in accordance with the legislation on judicial organization. In Cameroon, trade unions are not strong. For this reason, collective bargaining agreements are relatively rare. The OHADA corporate laws have additional provisions for dispute resolution. However, dysfunctions in the legal systems can create gaps in compliance or practice with international labor standards. The ILO works with the Cameroonian government on issues such as the prevention of child labor and trafficking in person, which contributes to the alignment of Cameroon laws with international labor standards.

Cameroon and OPIC signed an Investment Guarantee in 1967. In recent years and with this agreement, OPIC has been able to provide insurance and contributed to an increased access to finance for Cameroonian farmers and small and medium sized enterprises. The current official currency exchange rate for the U.S. dollar is CFA 590/USD 1.00, although there have been significant fluctuations recently, from CFA 583/USD 1.00 to CFA 612/USD 1.00.

Cameroon has ambitious development plans and hopes to become an emerging economy by 2035. The government has published a list of 80 large infrastructure projects covering many sectors that would help achieve that goal. Cameroon officials have officially invited U.S. companies to bid and support them in the execution of these projects. The government has been slow to move on many of these projects. Nonetheless, these projects offer good business opportunities for OPIC’s continued involvement in Cameroon.

Cameroon signed an Investment Incentive Agreement with OPIC on March 07, 1967.

Table 3: Sources and Destination of FDI

The IMF relies on country authorities to submit data for this survey and the Mission is initiating talks with Cameroonian authorities to encourage the government to assist the IMF in the data collection and uploading process. At this time, fields in Table 3 are Not Applicable.

Table 4: Sources of Portfolio Investment

Not Applicable.

Dr. Derrin Smith
Deputy Chief of the Political and Economic Section
US Embassy Yaounde, Rosa Parks Ave, Yaounde, Cameroon
+237-2-2220-1500
yaoundepolecon@state.gov