
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 | 2019 | 2020 | 2021 |
FDI Inward Flow (million USD) | 1,027 | 675 | 850 |
FDI Stock (million USD) | 8,538 | 8,931 | 9,781 |
Number of Greenfield Investments* | 23 | 11 | 8 |
Value of Greenfield Investments (million USD) | 1,188 | 206 | 191 |
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.
