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Foreign Direct Investment

According to UNCTAD's World Investment Report 2022, FDI inflows to Cameroon, traditionally low compared to the potential of its economy, reached USD 850 million in 2021, a slight increase from the low USD 675 million recorded in 2020 amid the global health and economic crisis. FDI stocks are estimated to account for USD 9.78 billion in 2021. FDI to African countries hit a record USD 83 billion in 2021, but excluding South Africa, FDI flows to Central Africa remained flat (UNCTAD). According to UNCTAD’s Investment Trends Monitor, global FDI momentum weakened in 2022 in the context of the war in Ukraine, rising food and energy prices, financial turmoil and debt pressures.

Most of the FDI to Cameroon comes from the European Union, particularly France and Germany, and targets the mining industry, including oil extraction. However, China has become the main investor in the country, pursuing large infrastructure projects. As part of its growing interest in Africa, China has been investing steadily in Cameroon, allowing the construction of Kribi Port and Industrial Complex and Memve'ele Hydroelectric Dam. Chinese companies represent around 70% of total foreign investment (UNCTAD). The African Cup of Nations, held at the beginning of 2022, stimulated investments in the sectors of tourism, real estate and infrastructure. The 2020-2030 infrastructure development plan (which include railways, extension of the deep-water port of Kribi by a Franco-Chinese consortium and Nachtigal hydroelectric dam) is expected to stimulate investments (Coface).

Cameroon’s economy has the potential to become one of the most prosperous countries and among the best placed to receive foreign direct investment in Africa. While the country has many natural resources (oil, forestry, fisheries), as well as fertile land on which to build, it needs to improve and simplify its administration in order to boost entrepreneurship and fight against corruption. However, poor infrastructure, weak rule of law and continuing inefficiencies of a large parastatal system in key sectors impede FDI growth. In addition, continuing Islamist insurgency, violence and tensions in the separatist, English-speaking regions increase political risks and negatively impact business climate.

 
 
Foreign Direct Investment 201920202021
FDI Inward Flow (million USD) 1,027675850
FDI Stock (million USD) 8,5388,9319,781
Number of Greenfield Investments* 23118
Value of Greenfield Investments (million USD) 1,188206191

Source: UNCTAD - Latest available data.

Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.

Country Comparison For the Protection of Investors Cameroon Sub-Saharan Africa United States Germany
Index of Transaction Transparency* 7.0 5.5 7.0 5.0
Index of Manager’s Responsibility** 1.0 3.5 9.0 5.0
Index of Shareholders’ Power*** 6.0 5.5 9.0 5.0

Source: Doing Business - Latest available data.

Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action.

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What to consider if you invest in Cameroon

Strong Points

The key strong points of the Cameroonian economy are:

  • A long period of political stability under the regime in place
  • Low-cost labour
  • Abundant natural resources (agricultural, oil and mining)
  • A diversified export economy (oil, mining, agriculture, etc.)
  • Many ongoing infrastructure modernisation projects supported by IMF lending
  • Monetary stability because of its membership of the CFA Franc zone
  • The positive impact of the anti-corruption policy
  • Regulation on equity participation, allowing foreigners to own 100% of a company
Weak Points

The main weaknesses of the country are:

  • A complicated business environment as evidenced by its 167th place (out of 190) in the Doing Business ranking of 2020
  • One of the highest tax burdens on the private sector in the world
  • High risk of corruption
  • Lack of infrastructure
  • Risk of high political tension: insecurity in the north at the border with Nigeria, and uncertainty over the succession of President Paul Biya (88 years old and in power since November 1982)
  • Cameroon has trade deficits, relies on food imports, and is therefore exposed to foreign shocks.
Government Measures to Motivate or Restrict FDI
The Cameroonian government has targeted certain sectors as priority sectors for investment: transport, food industry, tourism and rural development. In order to attract more investors, significant programs are being implemented by the public authorities, with the support of financial backers, in order to improve judicial decisions, increase energy supplies, reinforce economic information, simplify procedures, support companies, and ensure the protection of the economic area against illegal threats.

Cameroon also has free trade zones in which all export companies can be set up. The free trade zones are only for the use of companies that produce goods and provide services meant exclusively for export. There are many advantages for such companies: exemption from all licenses, authorisation or quota limitation for both export and import, the possibility of being able to open a foreign currency account, no restrictions on sales operations, purchase of foreign currency, right to transfer profits abroad (25% has to be re-invested in Cameroon), tax and duty exemption for a period of 10 years from the beginning of operations and taxation at a general rate of 15% on profits starting the 11th year.

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Investment Opportunities

Tenders, Projects and Public Procurement
ARMP, Public Oversight Body - Cameroon
 Tenders Info, Tenders in Cameroon
 DgMarket, Tenders Worldwide
 

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