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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Cameroon has a number of operational advantages for potential investors and businesses. It has one of the lowest risks for its labour market on the continent, providing a workforce generally equipped with basic literacy and numeracy skills and an increasing number of young people with secondary and tertiary educational backgrounds. However, it performs poorly for other forms of operational risk, notably its trade and investment risk, as a result of pervasive corruption, inadequate financial and investment regulatory frameworks and an inefficient bureaucracy. We give Cameroon an overall score of 35.3 out of 100 for operational risk, 24th in Sub-Saharan African and 139th out of all the countries and territories we survey globally.

Central African countries generally perform poorly in the category of trade and investment, and Cameroon is no exception, with trade and investment conditions constituting the biggest operational risk to potential...

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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 34.2 out of 100 for its Logistics Risk in our Logistics Risk Index, ranking it 24...

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Cameroon Trade & Investment

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BMI View: 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 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 24.4 out of 100 in our Trade and Investment Risk index, placing it 33rd...

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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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According to Renault Group, auto sales for the first 11 months of 2014 came in at 3,408 units, a decline of 1.0% year-on-year (y-o-y). That said, we expect auto sales to return to positive territory in 2015 on the back of stronger private consumption in Cameroon and we forecast growth of 7.5% in 2015 versus our estimate of a contraction of 7.0% in 2014. Our Country Risk team forecasts real growth in private consumption to pick up to 6.5% in real terms in 2015 versus our estimate of 5.0% in 2014. At the same time, the halving of global crude oil prices since June 2014 and our Oil & Gas Team's forecast for Brent crude to remain subdued in the USD50-60/bbl range over 2015 supports our optimistic forecast, as it represents a substantial tax cut for consumers. Over the 2015-2019 period, we forecast auto sales to grow at an annual average of 7.1%, which will see sales reach 5,286 units in 2019.

We forecast fixed capital...

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Food & Drink

Cameroon Food & Drink

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Despite low oil prices, Cameroon's economy will sustain relatively strong economic growth, driven by a combination of consumer spending and rising investment spending by both the public and the private sectors. 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 2019 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 between domestic and foreign firms will boost domestic production of certain consumer goods, as highlighted by the investments made by SABMiller and Diageo into West Africa's...

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Infrastructure

Cameroon Infrastructure

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BMI View: An excellent pipeline of projects spanning the power and transport segments supports our view of sustained growth in Cameroon's construction sector. We predict growth of 8.43% in 2015 and average annual growth of 8.15% over the forecast period to 2024. Funding is set to come from a combination of development funding, private investment and Chinese capital.

The limited reliance on government investment for project development will shield the construction sector from an expected economic slowdown over the next few years that is mainly related to falling government revenues as a result of lower commodity prices. We note rising risks from lower commodity prices, both to the country's fiscal position and fixed asset investment supporting natural resource extraction. Investment in Cameroon's iron ore resources has been a major driver of...

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Mining

Cameroon Mining

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BMI View: 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. While lower oil prices could add significant downside to the upstream production profile of some of Cameroon's regional peers, BMI believes that the country is still well positioned for further exploration activity and we have not changed our outlook While Cameroon's gas production will remain modest, the size of GDF Suez's proposed LNG terminal highlights production potential of over 5bcm by the end of our forecast period.

Headline Forecasts (Cameroon 2012-...

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Pharmaceuticals & Healthcare

Cameroon Pharmaceuticals & Healthcare

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BMI View : Rapid population growth and economic development will drive Cameroon's pharmaceutical and healthcare market expansion over a multi-quarter timeframe, albeit from a low per capita spending level. The combination of rising consumer spending, global aid funds and Cameroon's government recent commitment to enhance investment through 2015-2018 in several key areas, including the health sector, will sustain market development. Meanwhile, we expect mobile health innovations to keep spreading across the Cameroonian health system, improving access to healthcare. However, poor governance and a challenging business environment will continue to drag down the market full potential.

Headline Expenditure Projections

  • Pharmaceuticals:...

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Telecommunications

Cameroon Telecommunications

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BMI View: Our Q115 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. As mobile subscriptions growth slows down in these markets, operators will increasingly shift their resources towards advanced data services to sustain revenue growth. Their efforts will be complemented by the proliferation of low-cost smartphones and tablets as well as cheaper and more reliable access to international bandwidth connectivity via submarine cables.

Key Data

  • The average mobile market growth for the seven countries in our coverage in Q314 was 4...

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