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Transforming the economy.

The government of Paul Biya has put together an ambitious plan to transform the country's economy. It is doing so by focusing on some strategic sectors where it has a clear comparative advantage as well as creating the right conditions by enhancing the business climate, with a big emphasis on the country's infrastructure.

Agriculture remains central to this grand plan. Cameroon is blessed with various climatic regions, and consequently grows a large variety of agricultural products including coffee, cocoa, cotton, rubber, bananas, maize, oilseed, grains, cassava (manioc) and timber. It is thought that seven in 10 Cameroonians are employed by the sector, often in small-scale enterprises, including raising livestock, and agriculture (including fishing) accounts for nearly 25% of GDP and 43% of the country's exports.

In Cameroon's Growth and Development Strategy Paper, the government acknowledged various challenges faced by the sector, including the lack of value addition and development of agri-business enterprises. Nevertheless, within the Central African region (CEMAC), Cameroon is the pre-eminent producer and exporter of fruits and vegetables.

Considerable effort has been expended to increase the mechanisation of the sector, with the government attracting investment in an assembly plant for Indian tractors. Their leasing to small farmers is anticipated to lead to a rapid increase in cereal production, especially maize, and the growing of rice (nearly all imported at present), complementing Cameroon's traditional crops of bananas and pineapples.

Cameroon is the world's fifth-largest producer of the cocoa bean, currently growing a crop of more than 170,000t, that goes to make chocolate confectionery and other products. Enormous effort has gone into raising the quality of the crop, by establishing communal drying ovens and farm-gate advice on the control of pests and diseases.

The nation's forests cover a huge expanse of the southeast of the country, constituting 40% of the country's land area, in fact, the second-biggest forest in Africa. Precious tropical woods such as iroko, mahogany, sapelli and azobe are found in abundance, some of over 600 species that have been identified in the country. Over two million tons of wood is produced each year, half of which is exported, mainly to Asian and European markets.

Continued efforts to revitalise the agricultural sector, develop infrastructure and strengthen energy supply should consolidate Cameroon's growth, according to the AfDB.

ENERGY

Without the strengthening of Cameroon's energy supplies, it is unlikely that manufacturing and value addition to the agricultural sector can really gain a foothold within Cameroon's economy, and it is this factor that is cited as the main deterent to inward investments. But government seems to have taken this on board, and while 80% of Cameroon's electricity is generated by hydroelectric facilities, a further raising of the amount of energy generated to 12,000MW is viewed as being possible.

Again, Chinese contractors (China International Water and Electricity Corporation) have been awarded an important infrastructure project, the part-World Bank-funded $300m contract to build 30MW of new capacity, namely the Loin Pangar dam on the River Sanaga. This hydroelectric dam will supply the electricity for a new aluminium smelter.

Interestingly, the new dam will flood an area through which the Chad-Cameroon oil pipeline runs, so tenders have been issued to move it. President Biya has also laid the foundation stone for the Memve'le Dam to be built on the River Ntem by Sinohydro, to power 1,200MW power plant by 2016.

To meet Cameroon's more immediate needs, a gas-generated power plant at Kribi has been built, which is beginning to supply 1,200MW of power to the national grid, alleviating much of the pent-up demand from both industry and domestic consumers.

It is at Kribi that a massive new port facility is being constructed, due for completion towards the end of next year. This should create capacity for trade imports and exports, with the port able to service large ships of up to 16m draft. This will offer an alternative to the very congested Douala port, Cameroon's commercial centre, which is currently undergoing an extensive rehabilitation and upgrade programme.

However Kribi port is only part of a huge development programme for this once-sleepy seaside town. Formerly a tourist hotspot, the town is industrialising fast.

What is being envisaged by the developers, the giant GDF-Suez French conglomorate that has earmarked almost $5bn for the plan, is a hydrocarbon terminal, an aluminium smelter and an iron-ore facility (no doubt with the development of the giant Mbalam deposits uppermost in the developers' minds) about 40km to the south.

All these ambitious developments are planned to be completed within five years, and in addition work on an LNG train and associated gas pipelines to the offshore wells that will capture the gas associated with oil exploitation, is scheduled to begin next year.

TOURISM

Representing a major plank in Cameroon's economy, tourism is one of the country's trump cards in terms of export earnings and is attracting valuable flows of inward investment. Now falling within a newly renamed ministry, the Ministry of Tourism and Leisure, there are two overseas offices promoting tourism, in Washington DC, USA, and Beijing, China.

Cameroon's natural wonders are prolific, but the country lacks the required infrastructure in terms of hotels and lodges, as well as tour operators and allied services, to adequately meet the undoubted demand that exists. As one industry insider noted. "If Cameroon can attract one million tourist arrivals each year [not a wholly unrealistic target], the country will earn 50bn XAF in entry visa fees; 10bn XAF in airport taxes and they will spend at least 250,000 XAF on accommodation; at least 300,000 XAF on food and beverages, at least 200,000 XAF in transportation, and that is more that 750bn XAF in direct income for the travel and tourist industry alone."

That is a compelling case for an international investor prepared to take the early mover advantage and reap the rewards. And the same could be said for all of the other opportunities, across all economic sectors in Cameroon, that lie in wait for intrepid foreign capital.

HOW TO INVEST

Preparing your stamps

Purchase tax documents

Apply for notarised statutes and obtain a certificate proving that the company is in the process of being created

Open a bank account for a company in the process of being created

Deposit start-up capital at the bank

Obtain a receipt for the deposit

Sign notarised statutes

Retrieve notarised statutes and declaration of subscription and payment

Registration of the application

Prepare the application for the CFCE (Centre des formalites de creation des entreprises)

Obtain an accounts receivable card

Pay for the accounts receivable card

Pay registration fees at the Registre du Commerce (Registry of Companies)

Submit the application to the CFCE

Retrieve documents attesting to the creation of the business

Publication of incorporation in a legal journal

Submit the legal announcement for publication

Pay the fees for the legal announcement's publication

What are the costs?

27,500 XAF (for the RCCM registration fees--for an individual)

27,000 XAF (for the legal announcement)

15,000 XAF (for disbursements)

10,000 XAF (to start the application)

6,000 XAF (for tax stamps and various tax fees)

5,000 XAF per copy (of the declaration of capital subscription)

400 XAF (for the original and three copies of the declaration affirming the existence of a place of business)

4,000 XAF (to submit the payment and subscription declaration to the Registrar)

4,000 XAF (for the submission of the statute minutes to the Registrar)

3,000 XAF (for the application and two copies of your police record)

2,000 XAF (for tax stamps for the tax registration of the statute minutes, declaration of subscription and payment of capital)

1,500 XAF (to declare revenue--accounts receivable)

1,000 XAF per tax stamp (for certification of non-usage of personnel)

1,000 XAF per tax stamp (for notarised copies of statutes)

2% XAF (for notary emoluments)

The estimated total cost of the procedure is 147,500 XAF (less than $300)
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Title Annotation:CAMEROON/SPECIAL REPORT
Publication:African Business
Geographic Code:6CAME
Date:Jun 1, 2013
Words:1323
Previous Article:Cameroon realising its potential.
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