Cameroon
In-depth country-focused analysis on Cameroon's economic, political and operational risk environment, complemented by detailed sector insight

Our comprehensive assessment of Cameroon's operating environment and the outlook for its leading sectors are formed by bringing together a wealth of data on global markets that affect Cameroon, as well as the latest industry developments that could impact Cameroon's industries. This unique integrated approach has given us an impeccable track-record for predicting important shifts in the markets, ensuring you’re aware of the latest market opportunities and risks in Cameroon before your competitors.

Country Risk

Cameroon Country Risk

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Core Views

  • Economic expansion in Cameroon is accelerating, and we predict that real GDP grow will be 4.6% in 2014. The country's economy will outperform its Central African peers, averaging 4.8% growth between 2014 and 2018.

  • Faltering oil production and high import demand will cause Cameroon's current account deficit to widen to 6.0% in 2014. We expect the shortfall to remain relatively stable over the coming years.

  • High spending on capital projects will keep the country's fiscal deficit wide. The shortfall could expand rapidly if the government is unable to control spending on costly fuel subsidies.

  • The Banque des États de l'Afrique Centrale cut its core interest rate by 250 basis points to 3.25%. While we do not expect that the cut will have a significant impact on the regional economy, further loosening is likely in...

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Cameroon Operational Risk Coverage (9)

Cameroon Operational Risk

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Businesses in Cameroon face a number of operational challenges as a result of the crime and security environment. Notable risks include high crime, a corrupt and unreliable police force and the prevalence of criminal gangs, with translates into high foreign worker vulnerability due to criminal preferences for targeting expatriates. Firms pay considerable sums for private security in order to reduce the likelihood of damaged or stolen goods and property, attacks on workers and other crimes. There are also some terrorist threats, particularly in the north of the country, which have affected cross-border trade and created operational challenges for companies in insecure areas. Although there is a low risk for interstate conflict, instability along its borders has hurt firms by increasing the likelihood of violence or theft and by interrupting trade. These factors mean we have given Cameroon a Crime and Security Risk score of 33.4 out of 100, placing it 28th out of 44...

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Cameroon Crime & Security

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Businesses operating in Cameroon face a number of operational challenges due to the country's crime and security environment. Notable risks include high crime, a corrupt and unreliable police force, and a prevalence of criminal gangs, translating into high foreign worker vulnerability due to criminal preferences for targeting expatriates. Firms therefore pay considerable sums of money for private security in order to diminish the likelihood of damaged or stolen goods and property, attacks on workers, and other types of crime. Businesses also face a variety of terrorist threats, particularly in the northern part of the country, which has adversely affected cross-border trade and created operational challenges for companies in insecure areas. Although Cameroon has a low risk for interstate conflict, instability along its borders has also hurt firms by increasing the likelihood of violence or theft and by interrupting trade. These factors merited Cameroon a Crime and...

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Cameroon Labour Market

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There is a low level of risk for businesses in Cameroon's labour market. The country offers advantages such as a high literacy and numeracy rate compared with regional averages and an increasingly successful secondary and tertiary education system that produces more sophisticated and well-qualified workers. However, sources of risk persist in the form of low life expectancy - which limits worker productivity - and moderate costs of labour, with limited access to foreign workers. As a result, we award Cameroon a score of 41.7 out of 100 for Labour Market Risk, placing it eigth regionally, higher than Nigeria (10 th), Gabon (21 st), and the Republic of the Congo (28 th).

Arguably Cameroon's largest labour asset is its educational attainment, which has enabled the country to enjoy sustained improvements in both male and female literacy rates and acquire more sophisticated skills for local firms. Although Cameroon...

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Cameroon Logistics

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BMI View: Cameroon's location at the meeting of three trans-African highways, and its relatively good port sector, means the country has the potential to play a major regional logistics role. At the moment, however, supply chain efficiency is limited by the quality of the internal transport network, with unpaved roads and a lack of regional rail connections. The utilities infrastructure reflects Cameroon's status as a developing state, and investors should expect to encounter problems including low internet penetration rates and frequent power outages that inhibit business operations and slow trade flows. Long and difficult bureaucratic and customs procedures further limit speed of trading and increase import and export costs. We give Cameroon an overall score of 33.6 out of 100 for its Logistics Risk in our Logistics Risk Index, ranking it 26th out of 44 states in the region.

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Cameroon Trade & Investment

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Cameroon has one of the worst track records in the region for trade and investment risk. Corruption poses a major obstacle to foreign investment and participation in the economy by lowering the accountability and impartiality of the judicial system, incurring adverse consequences for important procedures such as the filing and paying of taxes, the resolution of investment and property disputes, and the registration of property. Intellectual property rights and ICT laws are poorly enforced, increasing the likelihood of financial losses due to copyright violations and piracy, while high trade barriers and inadequate regulatory frameworks slow growth in both the trade and financial sectors. Cameroon therefore receives a score of 23.3 out of 100 in our Trade and Investment Risk index, placing it 39th regionally.

As an oil producer, Cameroon has been able to utilise its oil revenues to encourage the expansion of the country's financial and trade...

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Cameroon Industry Coverage (8)

Agribusiness

Cameroon Agribusiness

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BMI View: We see better prospects for coffee and cocoa output in 2014/15 compared to the previous year with exports of the two key agricultural commodities set to rise as a result. Cocoa will be particularly important as higher prices will make any improvements in output translate into substantial gains. This makes it all the more imperative that ongoing issues with distribution and port access are resolved as quickly as possible. Dry weather poses some downside risk to cocoa and has already reduced expectations for 2014/15 corn production. The newly imposed ban on sugar imports may provide some benefit to local production but we are sceptical that it can last given its likely political unpopularity.

Agribusiness Market Value
BMI Market Value By Commodity (2010-2018)
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Autos

Cameroon Autos

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Cameroon's new vehicle market is a fraction of the size of some of its larger regional neighbours, but its growth rate picked up significantly in 2013. Vehicle ownership is still low by regional standards and is expected to remain below 15 vehicles per 1,000 people during our five-year forecast period to 2018, which suggests there is not the same level of middle-class development as in some of the bigger Sub-Saharan African markets. Several economic episodes have reduced demand for new cars in favour of cheaper second-hand alternatives. These include the economic crisis of the 1980s, the franc's devaluation and the reduction in civil servant salaries in the 1990s.

According to Renault Group, auto sales for the first nine months of 2014 came in at 2,708 units, a decline of 5.2% year-on-year (y-o-y). The poor growth print achieved year-to date has prompted us to downgrade our sales growth forecast for the year to a...

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Food & Drink

Cameroon Food & Drink

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Increasing oil output and   buoyant consumer spending   will contribute to accelerating Cameroonian economic growth in 201 4 and beyond.  This bodes well for Cameroon's food and drink industry, which will benefit from rising private consumption levels as well as a favourable demographic situation. Coming from a relatively low base, a number of segments in the food and drink industry will experience strong growth rates to 2018 thus offering attractive investment opportunities.

As per capita incomes rise, we expect per capita food consumption to increase, resulting in large multinational corporations investing heavily in Cameroon in order to tap into this growing market. We believe that joint ventures (JVs) between domestic and foreign...

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Infrastructure

Cameroon Infrastructure

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BMI View:   We are maintaining our positive outlook for Cameroon's construction sector growth over the five - year time horizon based on a strong project pipeline and growing PPP employment. However, we note rising risks from lower commodity prices, both to the country's fiscal position, and fixed asset investment supporting natural resource extraction.

Cameroon's construction sector growth is expected to average 9.4% between 2015 and 2019, broadly in line with the high growth trend set over the previous five years. A strong project pipeline across the power and transport segments in particular is supporting this outlook, with funding coming from a combination of development funding, private investment and Chinese capital.

The limited reliance on government investment for project development will...

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Mining

Cameroon Mining

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Central Africa's mining sector is set to follow much of the continent by developing its substantial mineral wealth. The region is still far from achieving its full potential, but these recent developments could indicate a changing tide for these three countries and indicate that the mining sector is set for sustained lift-off. However, many of the issues that have held back the region from achieving its potential for much of its history remain. Political risk and a lack of adequate infrastructure are the most pressing concerns, and while there are some efforts to address these problems, a lot more needs to be done if the region is not going to be considered 'frontier' for many years to come.

Significant Growth Ahead
DRC - Gold And Copper Output
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Oil & Gas

Cameroon Oil & Gas

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BMI View : Cameroon is a small producer of oil and a nascent gas producer. Oil production should slightly increase, after years of decline, with several small projects coming online. However, new exploration and discoveries will be necessary if Cameroon is to stabilise or grow output and conserve its net export potential in the longer term. While Cameroon's gas production will remain modest, the size of GDF Suez' proposed LNG terminal highlights production potential of over 5bcm by the end of our forecast period.

Headline Forecasts (Cameroon 2012-2018)
  2012e 2013e ...

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Pharmaceuticals & Healthcare

Cameroon Pharmaceuticals & Healthcare

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BMI View : Against a backdrop of sustained economic growth, Cameroon's pharmaceuticals and healthcare market will sustain an expansive trajectory over the medium-to-long term. Although from a low per-capita spending level, population growth and rising incomes will drive drug consumption in the foreseeable future. A number of public and private investment projects across the healthcare system will contribute to overall sector growth, as illustrated by recent investment projects by Swiss entrepreneurs, and continued global aid funds. However, weak governance and a challenging business environment will continue to weigh on the market 's full potential.

Headline Expenditure Projections

  • Pharmaceuticals: XAF208.84bn (USD420mn) in 2013 to XAF210....

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Telecommunications

Cameroon Telecommunications

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BMI View: Our Q414 West and Central Africa report analyses latest industry, regulatory and macroeconomic developments in the telecoms markets of seven countries: Cameroon, Côte d'Ivoire, the Democratic Republic of Congo (DRC), Gabon, Mali, Mauritania and Senegal. The greatest growth area in these markets is the broadband sector, which should benefit from improved international connectivity, investment in wireless data networks and cheaper devices. The mobile operators in the region will also seek to expand their non-voice services portfolios to create new revenue streams that will offset the sluggish revenue growth from traditional services.  

Key Data

  • The average mobile market growth for the seven countries in our...

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