France emerged as the power house of Cameroon’s Direct Foreign Investment in 2013.
President Francois Hollande’s country came first with investments that stood at FCFA 122.8 billion, according to a report the National Technical Committee for the Balance of Payment published in Yaounde recently.
Going by the report, the United States of America, USA, came in the second position by pumping investment worth FCFA 62.9 billion into Cameroon. Cameroon’s giant neightbour, Nigeria, came in the third position with FCFA 6.6 billion investments in the country.
In stark juxtaposition, direct foreign investments in 2013 slumped; giving signals that Cameroon’s environment was not enabling enough for foreign investors. In 2013, only a total of FCFA 348.2 billion entered Cameroon in terms of direct foreign investments. This figure represents a FCFA 65 billion drop as compared to 2012 during which Cameroon got foreign
investments worth FCFA 413.
4 billion. Despite the downward trend, the FCFA 3.842 billion is far better than the FCFA 219.7 billion which Cameroon had in 2011.
Statistics indicate that in 2013, Cameroon attracted less foreign investments in the petroleum sector. The sector attracted only FCFA 69.7 billion as against FCFA 80.7 billion in 2012. Such figures highlight a drop of FCFA 11 billion in the sector. The committee report holds that the industrial sector gained foreign investments worth FCFA 42.6 billion in 2013 as against FCFA 71 billion in 2012. It therefore marks a negative balance of FCFA 25 billion.
The agricultural sector had direct foreign investments worth FCFA 4.1 billion in 2012. It makes a difference of FCFA 55 billion. The forestry sector in Cameroon attracted the smallest volume of investments in 2013. On the contrary, the tertiary sector got more foreign investments in 2013 than the previous year. It registered FCFA 169.9 billion as against FCFA 99.8 billion in 2012. FCFA 10.1 billion came in for the transport sector, far below the FCFA 11.8 billion that was registered in 2012.
The Telecommunications sector had foreign direct investments worth FCFA 3.5 billion as compared to the FCFA 8.7 billion in 2012. Trade registered FCFA 53.5 billion in 2013 as compared to FCFA 74.4 billion the previous year.
These figures, according to economic analysts, are a tell-tale signs that foreign investors were still scared of doing business in Cameroon in 2013. They were asking for an enabling business environment that is void of administrative bottlenecks and corruption. That is why Government enacted law No 2013/004 of April 18, 2013 that provides incentives and lays down favourable conditions to attract private investment in Cameroon. It was within the context of this law that President Biya described Cameroon during his recent visit to the US as a good risk.
It was also in the spirit of the law that Government signed a convention recently with 13 national and international companies that are investing in the country. The 13 companies have pledged to invest FCFA 180 billion that will generate 3,000 jobs in the different sectors of the country’s economy.
One of the companies, MedCem, that signed an agreement with the Minister of Industries, Mines and Technological Development, Emmanuel Mbonde, on September 9, indicated it will invest FCFA 12 billion that will create 610 jobs. It will be producing 600.000 tons of cement a year for a start and later a million tons annually. Another company that will be producing aluminum and cement will invest FCFA 40 billion for 900 jobs while the sugar-producing company will invest FCFA 87 billion for 336 jobs.
In the same vein, the Vina Industry Corporation will invest FCFA 22.3 billion for 400 jobs. The Olam CAM Company that purchases coffee and cocoa says it will invest FCFA 22 billion for 119 jobs while the Equatorial Agro-food Industry will invest FCFA 3 billion with 142 jobs.
Experts hold that despite the law that provides incentives for private investments in Cameroon, the country is still not attractive to many foreign investors because of certain factors. Observers hold that starting a business in Cameroon is still replete with administrative bottlenecks and corruption. The World Bank yearly report, ‘Doing Business,’ has classified Cameroon over the past recent years as one of those countries where it is still difficult to start a business. Besides, the communication network is still a problem.
The road network in certain parts of the country is a nightmare. Only 50 kilometres of the entire road network in the country has been tarred. This is just 10 percent of the national road network. Critics hold that many of the tarred roads are narrow paths that can hardly bear a huge volume of traffic. The railway transport has remained stagnant since independence, linking only part of the Northern part of the country to the South.
Observers hold that Government needs to do more roads and improve the transport system in order to attract more investors.