Cameroon: Statistics In 2012

I have recently read a great brochure on investment in Cameroon 2012  by Jeune Afrique, and I wanted to share the findings with you. Here they are.

Economic powerhouse of Francophone Central Africa, and accounting for half of its population, Cameroon is strategically positioned with its Atlantic coast, its borders with six major countries and its natural situation on the borders of  Western Africa and Southern Africa.
Vast country, stretching from the Atlantic coast, not far from the equator to the heart of the African continent, towards Lake Chad. It offers a wide variety of landscapes and climates, many forests, mineral resources in quantity (52 minerals) and 7.2 million hectares of arable land (10% of total 54 African countries).

Determined to attract foreign investors, Cameroon offers a political and economic stability, many natural and human resources, and a great development ambition.
Here are sector by sector the key statistics of Cameroon:

• A robust and mature economy

In steady growth (4.5% in 2012), Cameroon's economy has sound fundamentals. The country is not in debt (less than 4% of GDP), exports and imports are growing steadily, the trade balance is in surplus (0.8% of GDP) and inflation is contained (2%).

• A large market

With 19.4 million inhabitants, 52% in urban areas, Cameroon is one of the first sub-Saharan African markets and the first in Francophone Central Africa. Distribution, transportation and, more generally, services are promised a great development.

• A well-trained and  bilingual youth

Cameroon has 80 colleges, which graduate nearly 4,000 students per year. 48% of Cameroonians are under 15 years in a country that has one of the highest enrollment in the region (over 50%). French and English are both official languages.

• A solid network of business

The country has more than 90,000 companies with fifty large companies (revenue of 20 million dollars to over a billion dollars), and 86% of SMEs. They have a favorable institutional environment for their expansion (coaching, access to credit and government procurement, etc..).

• A favorable business environment

The Cameroonian civil and commercial codes are similar to the French codes (also harmonized with those of all French-speaking sub-Saharan Africa). Many organizations facilitate investments: stop, simplified procedures (delay of starting a business was reduced to three days) ... Taxation is also suitable for business facilitation and trade, particularly with neighboring countries.

•  Investment

Many sectors are available for investment:

In services
The service sector represents 51% of GDP and 85% of companies. The ambitions of the economic development of Cameroon promise a strong development, especially in distribution and trade, transportation and tourism.

In manufacturing and mining
Manufacturing and mining represent the secondary sector and account for 22% of GDP, and it is changing rapidly. Very dynamic, BTP achieved annual growth of 12.5%. Gas and its transformation, and the exploration and mining industry offer many opportunities.

In Agriculture
Large producer of cocoa, wood, rubber, banana, coffee, tea and cotton, Cameroon accounts for 27% of its GDP through the primary sector, which has several strengths. Three quarters of the arable lands are available for new crops and food industries are in short supply.

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Business Opportunities And Risks In Africa

          Investment in Africa is growing and more money is actually coming in. But some companies are still skeptical and hesitate to put their money in Africa. The truth is, the perceived risks about doing business in Africa are by far greater than the actual risks.  Lots of European companies have actually invested in more than 40 African countries and those businesses are doing very well, making lots of profits in sectors like telecommunication, transportation, agro business and so on. And we already can see an overall growth in GDP in the entire continent.

• Nigeria: Nigeria is the United States' largest trading partner in sub-Saharan Africa and supplies a fifth of its oil (11% of oil imports). It has the seventh-largest trade surplus with the U.S. of any country worldwide. Nigeria is currently the 50th-largest export market for U.S. goods and the 14th-largest exporter of goods to the U.S. The United States is the country's largest foreign investor. According to Citigroup, Nigeria will get the highest average GDP growth in the world between 2010-2050. Nigeria is one of two countries from Africa among 11 Global Growth Generators countries. 
• Angola: Overall, Angola's economy has undergone a period of transformation in recent years, moving from the disarray caused by a quarter century of civil war to being the fastest growing economy in Africa and one of the fastest in the world, with an average GDP growth of 20 percent between 2005 and 2007. During 2001–2010 Angola has the world's biggest Annual average GDP growth with 11.1 percent. In 2004, China's Eximbank approved a $2 billion line of credit to Angola. The loan is being used to rebuild Angola's infrastructure, and has also limited the influence of the International Monetary Fund in the country.
• South Africa: At the start of 2000, the President Thabo Mbeki vowed to promote economic growth and foreign investment by relaxing restrictive labor laws, stepping up the pace of privatization, and cutting unneeded governmental spending. His policies faced strong opposition from organized labor. From 2004 onward economic growth picked up significantly; both employment and capital formation increased. South Africa is ranked 25th in the world in terms of GDP (PPP) as of 2008, and is considered a newly industrialized country. By UN classification South Africa is a middle-income country with an abundant supply of resources, well-developed financial, legal, communications, energy, and transport sectors, a stock exchange that ranks among the top twenty in the world, and a modern infrastructure supporting an efficient distribution of goods to major urban centers throughout the entire region.

         In fact, all over the continent, entrepreneurs, foreign business owners, investments companies and banks are getting involved and are learning how to deal with the execution and political risks of doing business in Africa and getting local partners to help them with local problems.  One of the greatest needs for Africa’s growth is the infrastructure. This creates the biggest opportunity for investment. The potential to trade with this new infrastructure is huge and we are all looking forward for that. Lots of business analyst forecast an overall economic growth in Africa and the good news is that almost all type of investment can take advantage of such a growth:

• The infrastructure sector,
• The telecommunication sector, with a phenomenal growth,
•  Financial services,
• Consumer businesses for the middle class with huge demographic numbers,
• Energy supply,  Hotels.

We also have other sectors that support the consumer sector like logistics; banking and mortgage activities with are important issues for new entrepreneurs. Some other challenges we need to overcome to accelerate this growth are: 

• Facilitate the business environment and then lets the private sector to come in,
• Remove government in order to reduce barriers to the private sector,
• Reduce the overall time it takes to open a business,
• Create an information pole or stop shop to have an ecosystem where, instead of an investor coming to a country and having to go to 10 different ministries, they can go to one place and get all the information they need. 
• Provide funding and permit banks to lend more than 1 year: African banks need help because they can’t finance long term projects, making lots of great ideas by young entrepreneurs never get funding. 
• Create a dialogue between the private sector and the public sector: The government needs private sector businesses to boost the economy; it should therefore listen to their problems and try to find solutions to mitigate them.

The risks

Doing business has always been risky. Every time you are starting a business in a new place (different from what you’re used to) you will surely encounter some difficulties and there are always risks. Some of the African investment risks are civil war, unreliable judiciary procedures and court. And many people are afraid to invest just because they imagine that a civil war in any given country will propagate to the entire continent; that’s simply not true.

African countries are really trying to improve their exposure to the world and build their credibility by adopting democracy, opening borders and avoiding civil wars. And a good way to get a real sense of what are the risks in the African market, is to talk with someone already established in Africa and ask him or her about what the situation really is and what are the ongoing improvements that are being made to the system to facilitate investments as a whole and to enable an environment for business creation both for local and for foreign investment.

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Investing In Africa’s Emerging Market

      Africa is the world's second largest and second most populous continent, after Asia. Although it has abundant natural resources, Africa remains the world's poorest and most underdeveloped continent, the result of a variety of causes that may include the spread of deadly diseases and viruses (notably HIV/AIDS and malaria), corrupt governments that have often committed serious human rights violations, failed central planning, high levels of illiteracy, lack of access to foreign capital, and frequent tribal and military conflict (ranging from guerrilla warfare to genocide). All these problems make the international community believes that Africa, with only 1.5% of global trade, is the less active continent in the trade world.

         Now that Energy prices and commodity prices are up all over the world, Africa is becoming a strategic location for all parts of the world. With the demographic explosion of middle class, with lots of resources and commodities that are attractive to the world, with lots of investment commitment in the infrastructure sector, we believe that these opportunities can translate to investment opportunities and that Africa will rise and contribute to the rest of the world. As evidence, those foreign companies which are already installed in Africa are doing well and are seeing the results of their investment.

          In term of investment, Africa is becoming an investment destination and a trading block. We can divide the continent in to economic blocks where the East Africa for example, with more than 150 million of inhabitants, builds custom protocol to increase trade between countries in the region. This reduces barriers and frees the market so that people, goods and commodities can move within the region. And other region like the south SADEC region is building infrastructure to support the growth and is opening borders as well to welcome more trade and attract investors. So if you are doing business in one country, let say Kenya for example, you also have other countries of the region with you.

Chinese investment in Africa           China came in Africa, 11 years ago; they found it very difficult to be adopted by the continent and the countries were hostile and uneasy. But after years of hard work and good strategy execution, china has really penetrated the continent and African countries are more receptive to the Chinese ideas and interest to the continent. China started off studying the continent and the large African market. They found the urbanization and the demographic explosion of the countries as a huge opportunity. One famous quote says “The difference between Africa and the western countries is the abundance of business opportunities”.

Unlike other western countries that extract African resources to only profit their countries, China appreciates these resources and uses them to serve the African market. They also have the strategy and qualified human resources to import goods and build product in Africa. Most of the Chinese investment is in infrastructure sector for opening up the continent. All new investors will have to compete with china because it’s pretty well established.

Other investments:

India is also systematically getting involved but their interest in not known yet. They are mostly focusing in the IT retail sector which is quite developed in India. Other countries like Russia or Brazil are also interested in Africa, and lots of African immigrate are coming back to build their country given the recession and global crisis faced by the western countries. And really what Africa offers now that the western countries don’t is “business opportunities”. The overall western contribution also played a productive role with goods and services distribution, job creation and transfer of practices and this value chain is backed up by setting up manufacturing in their industry and bringing telecommunication and financial services to the continent.

         In conclusion, we can agree that foreign investment is always welcomed, but to the question “what role Africa has to play in its own future”, I believe that Africa should drive its own economic growth because our future depends on us. We should drive the behavior and the development as opposed to being in the receiving end of whatever the international community gets interested in, in Africa.

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