Cameroon

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

Cameroon

Cameroon has a strong agricultural sector, with commercial cultivation of coffee, sugar, tobacco, bananas, cocoa, rubber and tea. Faltering oil production and a sharp decline in global crude oil prices will cause Cameroon's current account deficit to widen over the coming years. Instability may spread to the country’s economically dominant south as Nigeria-based Boko Haram continues to launch attacks in northern Cameroon.

We keep our clients informed of the latest market moves and political developments in Cameroon, as part of our 'top-down' and 'bottom-up' perspective. Clients also benefit from in-depth analysis on eight of Cameroon’s most important industries. We provide interactive data and forecasting alongside detailed and risk-assessed analysis from our results-proven research teams. Our aim is to keep you ahead of the curve, so you can feel confident doing business in Cameroon.

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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BMI View: Risks stemming from the labour market are low for businesses operating in Cameroon. Literacy and numeracy rates are high compared to regional averages, and the increasingly successful secondary and tertiary education system is producing more sophisticated and well-qualified workers. However, drawbacks include the country's low life expectancy, which limits worker productivity, as well as the costs associated with employing labour and bringing in foreign workers. We give Cameroon a score of 43.7 out of 100 for Labour Market Risk, placing it in 12th place regionally, out of 48 Sub-Saharan African (SSA) states surveyed.

From a regional perspective Cameroon has one of the best education systems in sub-Saharan Africa, excelling in both secondary and tertiary education. Public expenditure on secondary education is the second highest in the region, which has widened access for...

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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 35.1 out of 100 for its Logistics Risk in our Logistics Risk Index, ranking...

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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 29.5 out of 100 in our Trade and Investment Risk index, placing it 34th regionally.

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Cameroon Industry Coverage (8)

Agribusiness

Cameroon Agribusiness

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BMI View: The longer term picture for cocoa remains positive and it is encouraging for the profitability of the segment that investment continues to pour into the domestic processing industry. We take a much dimmer view of coffee production, which we expect to stagnate as prices are set to become even less enticing for growers. While the continuing controversy over Justin Sugar Mills raises questions over the investment climate for sugar, new bidders have emerged willing to take on SOSUCAM's monopoly.

Agribusiness Market Value
BMI Market Value By Commodity (2011-2019)
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Autos

Cameroon Autos

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A number of barriers exist to investment in Cameroon, including a weak business environment and a much smaller new-vehicle market relative to regional neighbours. However, a developing middle class and expectations for growth in fixed investment support our optimistic forecast for the autos sector.

We have upgraded our forecast for 2015 vehicle sales to 15.0% (versus 7.5% previously) on the back of stronger private consumption in Cameroon. Our Country Risk team forecasts growth in private consumption to pick up to 6.5% in real terms in 2015 following estimated growth of 5.3% in 2014. While the country is much poorer per capita than other thinly populated states in Africa, its middle class population is slowly developing. At the same time, the substantial decline of global crude oil prices since June 2014 and our Oil & Gas team's forecast for Brent crude to remain subdued support our optimistic forecast. Low interest rates, which...

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Food & Drink

Cameroon Food & Drink

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BMI View: Despite lower oil prices, Cameroon's economy will sustain relatively stable 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...

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Infrastructure

Cameroon Infrastructure

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BMI View: With no plans to reduce expenditure despite lower revenues, we expect the short-term outlook for Cameroon's infrastructure sector to remain good. However, this is unsustainable and we expect growth in the construction sector to moderate over our 10-year forecast period. Cameroon's impressive PPP pipeline remains an important area of investment for the sector.

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 infrastructure development, however, with iron ore prices at five-year lows and mining companies cutting capital expenditure, projects could be delayed or cancelled. However, progress...

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Mining

Cameroon Mining

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BMI View: Central Africa is starting to leverage its considerable mineral wealth as mining activity expands across the region, in countries such as the DRC, Congo-Brazzaville and Cameroon. The region's considerable and largely untapped deposits and high grades are an attractive proposition for international mining group, particularly as other locations suffer falling grades and higher operating costs. We see significant potential for growth in the extraction of copper, gold, iron ore and other minerals, however, political risks and a lack of adequate infrastructure continue to present considerable challenges to operators in the region.

Striking While the Iron (Or Copper) Is Hot
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. Several small projects coming online should boost the hydrocarbons production over 2017-2018, but following that the production will decline until the end of the forecast. BMI believes that Cameroon could stand to benefit from lower oil prices as oil companies refocus investments towards more proven offshore plays. However, declining oil revenues could weigh on downstream developments as the government struggles to finance large-scale projects such as SONARA refinery development. Recent announcement that Perenco Cameroon is close to finalising a commercial deal with Golar LNG for construction of floating LNG facility can add upside to our gas production forecast.

Headline Forecasts (Cameroon 2013-2019)...

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Pharmaceuticals & Healthcare

Cameroon Pharmaceuticals & Healthcare

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BMI View : Cameroon's healthcare sector development and improved access to medicines will continue to benefit from global aid funds and growing private consumption. Also, the Cameroonian government sustained commitment to enhancing economic development through investment in infrastructure projects will contribute to an enabling economic environment, underpinning pharmaceutical sector headlines over the next few years. However, affordability levels will still remain very low, and hence growth in the pharmaceutical sector will be mainly driven by generic medicines purchasing.

Headline Expenditure Projections

  • Pharmaceuticals: XAF192.59bn (USD393mn) in 2014 to XAF213.34bn (USD358mn) in 2015; +10.8% in local currency terms and -9.1% in US...

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Telecommunications

Cameroon Telecommunications

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BMI View: Our Q315 West and Central Africa report analyses latest industry, regulatory and macroeconomic developments in the telecoms markets of seven countries: Cameroon, Cote d'Ivoire, the Democratic Republic of the Congo (DRC), Gabon, Mali, Mauritania and Senegal. Strong growth over the last decade will lead to more saturated market conditions towards the end of our forecast and 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. Despite this, regionally 3G/4G shares of the mobile markets will remain lower than that of the more advanced peers in Europe and Middle-East.

Key Data

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