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1. Accelerating National Value Chains Through a Better Implementation of the African Continental Free Trade Agreement in Cameroon

Author:
Adeline Nembot, Sandrine Viesi Maingeh, and Jean-Cedric Kouam
Publication Date:
07-2024
Content Type:
Policy Brief
Institution:
The Nkafu Policy Institute
Abstract:
Like most African countries, Cameroon, a country endowed with abundant human and natural resources, has for decades been grappling with the challenge of developing and strengthening its national value chains. Value chains refer to the sequence of activities that create value for a product or service, from the raw material to the final consumer. Indeed, Cameroon’s national value chains face numerous difficulties, including poor infrastructure, limited access to finance, lack of diversification, lack of skilled labor and corruption (1). This results to low levels of processing and value addition, leading to low export prices and high import bills. This is particularly the case for the country’s cocoa bean exports, which are processed and sold elsewhere and therefore make only a small contribution to GDP (15%) (2) Fortunately, the implementation of the African Continental Free Trade Area (AfCFTA) agreement, signed by Cameroon in 2020, appears to be a significant opportunity to accelerate its national value chains. Indeed, this agreement aims to promote intra-African trade and economic integration by eliminating tariffs on intra-African trade, facilitating the movement of goods and services, and encouraging investment. From this perspective, this article seeks to explore how Cameroon can position itself to take advantage of the opportunities presented by the implementation of the AfCFTA on its national value chains. In doing so, it will highlight to African leaders and governments, economic operators and national and multinational companies the importance of developing their manufacturing sector and achieving the target of 30% of GDP by 2030. This article presents the trade and economic profile of Cameroon in Section 2, the role of the AfCFTA in promoting Cameroon’s value chains in Section 3, and the conclusion in Section 4.
Topic:
Regional Cooperation, Natural Resources, Free Trade, and Value Chains
Political Geography:
Africa and Cameroon

2. Financial Autonomy of Decentralized Local Authorities and Local Development

Author:
Herve Ondoua, Bin Meh, Boris Andzanga Ndzana, and Jean-Cedric Kouam
Publication Date:
02-2023
Content Type:
Working Paper
Institution:
The Nkafu Policy Institute
Abstract:
The financial autonomy of Decentralized Territorial Collectivities (DTCs) is today considered as the foundation of local governance. It confers decision-making power in financial matters to municipalities and regions, as well as a certain level of independence in the management of the resources at their disposal. In Cameroon, the general principles of financial autonomy are defined in the law on the General Code of DTCs, in particular in the Fifth Book, which repeals the law establishing the financial regime of local authorities and that on the financial regime of the State. Thus, financial autonomy should enable DTCs to develop by using their own resources in improving the living conditions of their populations. Despite these powers, DTCs still depend for the most part on income from municipal taxes and income transferred by the State. However, DTCs in Cameroon have real economic and financial potential but not a degree of financial autonomy that would allow them to accelerate the development of their locality. This reflection is aimed at local elected officials, political authorities, government authorities and civil society, with the aim of examining the effectiveness of financial autonomy in the face of the economic and financial potential of DTCs and their ability to implement their own local development projects. This article relates financial autonomy and local governance, on the one hand, and shows how financial autonomy is a factor of valorization of local resources, on the other hand.
Topic:
Development, Government, Finance, Local, Decentralization, and Autonomy
Political Geography:
Africa and Cameroon

3. Entrepreneurship, Youths, and Women Economic Inclusion in Cameroon

Author:
Laurent Brice Nsengue, Bin Joachem Meh, and Jean-Cedric Kouam
Publication Date:
01-2023
Content Type:
Working Paper
Institution:
The Nkafu Policy Institute
Abstract:
Bentham’s theory of utilitarian morality leads us to know that the purpose of economic activity is to ensure social progress for the happiness of the greatest number. Thus, excluding people from an economic system without considering their interests is considered a destruction of the common good. According to the United Nations (1962), population is one of the most important factors of economic productivity, as it influences the rate of development of a country. Women represent 49.6% of the world’s population and young people aged 10 to 24 represent 15.5% of the world’s population (UN World Youth Report, 2020; World Bank, 2020). In Cameroon, youth and women represent more than 60% of the population, but remain the most economically excluded (BUCREP, 2005). This reality appears to be a challenge for a country that wants to be an emerging country by 2035. The main objective of this paper is to show the role that entrepreneurial development could play in promoting the economic inclusion of youth and women in Cameroon. It is expected to raise awareness among public authorities as well as the private sector of the importance of economic inclusion of youth and women through entrepreneurship development. Based on studies carried out by credible international and local institutions, we focus on the challenges of entrepreneurship in the context of the economic inclusion of youth and women and the opportunity of entrepreneurship for the economic inclusion of young people and women in Cameroon.
Topic:
Economics, Women, Entrepreneurship, Discrimination, Youth, Equality, and Inclusion
Political Geography:
Africa and Cameroon

4. Fiscal Policy Letter No5: Improving Financial Inclusion To Broaden The Tax Base In Cameroon

Author:
Jean-Cedric Kouam and L.B. Bongbinsin
Publication Date:
07-2021
Content Type:
Working Paper
Institution:
The Nkafu Policy Institute
Abstract:
For several months, Cameroon has been facing the ravages of the pandemic caused by the coronavirus. To stop the spread of the virus, the Cameroonian authorities in April 2020 announced a series of fiscal easing measures to help companies and households in difficulty. Estimated at more than 114 billion CFA francs according to the Director-General of Taxation, the decisions taken have profoundly impacted public finances. Indeed, well before the pandemic, the country was already facing a high risk of external debt overhang (IMF, 2018) and immense security challenges in the North and the Anglophone regions. Despite this constraining socioeconomic and political context, the state must find the necessary and sufficient resources to ensure its proper functioning and territorial integrity. This fiscal policy letter proposes through analyzes a way for the government of Cameroon to increase its tax revenues in the coming years without penalizing growth: improving financial inclusion. The goal is to eliminate all constraints that exclude the most disadvantaged from full participation in the financial sector. The letter is structured around six key points. First, we provide an overview of Cameroon’s financial inclusion situation. Second, we analyze the factors that explain economic agents’ access to financial services, the transmission mechanisms between the financial and formal sectors, and the barriers to financial inclusion in Cameroon. Our results show that a deepening of the financial system would likely positively affect tax mobilization in Cameroon. Estimates show that a 10% increase in financial assets would lead to a 1.87% increase in tax revenue, equivalent to CFAF 49.70 billion – based on the level of tax revenue projected in the 2021 budget law. Similarly, a 10% increase in the number of secure servers – better access to the internet – would lead to a 1.1% increase in tax revenue, equivalent to CFAF 30.62 billion. This improvement in access to financial services for all economic agents – households, businesses – requires the public authorities to make the current regulations more flexible and increase the banking network’s density. This includes the development of payment systems, the construction of quality infrastructures, the definition of mechanisms to limit massive illicit capital flight, and the multiplication of consumer/investor protection guarantees.
Topic:
Development, Infrastructure, Governance, Finance, and Tax Systems
Political Geography:
Africa and Cameroon

5. Information Asymmetry: A Major Obstacle to Credit Provision In Cameroon

Author:
Jean-Cedric Kouam and Maurice Tchegho
Publication Date:
07-2021
Content Type:
Working Paper
Institution:
The Nkafu Policy Institute
Abstract:
According to the report published by the World Bank, which ranks the world’s economies Doing Business (2020) according to the ease of doing business, Cameroon ranked 167th out of 190 economies, a loss of one place compared to 2019. However, the country gained 0.1 point by recording a score of 46.1 points out of the 100 at stake. According to the World Bank, this slight increase is the result of the improvement of one of the ten indicators taken into account in the calculation of the score, that relating to access to credit. Indeed, with the help of the Economic and Monetary Community of Central Africa (CEMAC), Cameroon has established a framework for the granting of licenses and the operation of credit bureaus (1) which has enabled it to rank 80th in terms of obtaining credit, with a score of 60 out of 100 for obtaining credit and 6 for the depth of information on credit. Conversely, the score for credit bureaus is zero (World Bank, 2020). Despite this notable progress, particularly with regard to access to credit information, information asymmetry remains a serious problem in the relationship between the credit applicant and the credit provider in Cameroon. Defined as the lack of communication of accurate and reliable information from companies, this translates into the fact that one of the contracting parties holds information that it decides, voluntarily or not, to transmit to the other party. This constitutes an obstacle to project financing. From this situation, a major concern arises: What are the causes and consequences of informational opacity in the credit granting process in Cameroon?
Topic:
Communications, Finance, Business, and Credit
Political Geography:
Africa and Cameroon

6. Examining the Difficulties Encountered by Women in Obtaining Credit in Cameroon

Author:
Jean-Cedric Kouam, Ulrich D'Pola, and Shandy Mopia
Publication Date:
10-2021
Content Type:
Working Paper
Institution:
The Nkafu Policy Institute
Abstract:
In Cameroon, women represent 50% of the total population (World Bank, 2020). Vulnerable jobs among women – i.e., those of unpaid family workers and those of self-employed persons – represent 80.82% of total jobs among women, compared to 62.89% among men (World Bank, 2019). One of the reasons for the high vulnerability of women’s employment is the difficulty of accessing finance (credit), which is limited to micro-finance. Indeed, more than 90% of women do not have an account with a formal banking institution and therefore cannot benefit from the credit, and only 16.8% of women have access to credit for any use. However, access to credit and other financial services for women is a prerequisite for the economic empowerment of women and promulgation of gender equality. It is a pathway to fight against the economic marginalization of women and promote economic inclusion. The role of women in economic development cannot be underestimated, even though most women are involved in the informal sector. Major challenges, such as access to credit, limit the ability of women to grow from the informal to the formal sector or exploit the same economic opportunities as men. This challenge is pertinent and is faced by several countries in sub-Saharan Africa, where most women are involved in informal activities such as agriculture. While the general conditions necessary for access to credit in Cameroon do not discriminate gender-wise, women still face several impediments that make access to credit difficult for them as compared to men. This article looks at the difficulties encountered by women in obtaining credit and makes key recommendations to respond to these challenges to make credit easily accessible for women.
Topic:
Gender Issues, Finance, Credit, Banking, and Equality
Political Geography:
Africa and Cameroon

7. Report on the 2021 Budget of Cameroon: An Analysis of the Sustainability of the Public Debt

Author:
Jean-Cedric Kouam, Henri Kouam Tamto, Bin Joachem Meh, and Marlyse Noussi
Publication Date:
11-2021
Content Type:
Working Paper
Institution:
The Nkafu Policy Institute
Abstract:
The purpose of this report is to analyze the 2021 budget of the State of Cameroon, examining the sustainability of public debt. We use data extracted from the Republic of Cameroon’s Finance Laws, notably those for 2021; available public debt data from the Autonomous Sinking Fund; as well as forecasts made by the Ministry of the Economy, Planning, and Regional Development in the New National Development Strategy 2020-2030. Using the framework for analyzing public debt sustainability defined jointly by the International Monetary Fund and the World Bank in 2018, we show that Cameroon’s public debt, while still sustainable (estimated at 46.9% of Gross Domestic Product, thus remaining below the community threshold of 70%), still poses a high risk of external debt distress on the Cameroonian economy. This result means that, in the absence of concrete and radical actions by the government to reduce its rate of indebtedness, it will be difficult for the Cameroonian Treasury to honor all the government’s financial commitments on the bond markets in the near future, particularly with respect to debt service payments. We show that Cameroon’s liquidity and solvency ratios correspond to a policy that can be improved. Some debt and debt service indicators are significantly above short-term benchmarks over the entire study period from 2021 to 2030. Given this situation, it is urgent that the government define and implement an effective and efficient fiscal policy capable of bringing Cameroon to the level of development hoped for by 2035. This requires a more optimal reallocation of resources in order to guarantee productive investments and sustainable human development (Fambon, 2002). In this sense, this report emphasizes the need to guarantee the competitiveness of national enterprises, which includes the promotion of national private investment and the choice of loans at preferential rates that require the repurchase and/or cancellation of certain components of the country’s public debt. Thus, the study recommends several economic policy proposals to the Cameroonian government to reduce the debt burden.
Topic:
Debt, Economics, Governance, Finance, and Public Debt
Political Geography:
Africa and Cameroon

8. Rethinking Fiscal Policy to Overcome the Debt Problem in Cameroon

Author:
Jean-Cedric Kouam
Publication Date:
12-2021
Content Type:
Working Paper
Institution:
The Nkafu Policy Institute
Abstract:
In 2009, Cameroon adopted a major development vision to become an emerging country by 2035. To achieve this, the country defined a series of structuring projects that are essential to boost its industrialization and competitiveness. These projects include the construction of transport and telecommunications networks as well as hydroelectric dams. In addition to these major infrastructure projects, which require a significant financial investment by the state, the country has been affected since 2013 by the backlash of social and political tensions in the Central African Republic as well as the exactions of the terrorist sect Boko Haram, which have been recurring in the northern region since 2014. In addition, in 2016, Cameroon was plunged into a socio-political crisis that is becoming more widespread in its northwest and southwest regions. The humanitarian and social effects of this crisis (loss of human life, internal displacement, influx of refugees) have been further exacerbated by the COVID-19 pandemic, and the economic and financial impacts are increasingly being felt. In order to achieve its development objectives on the one hand and to strengthen its economic resilience to various shocks, on the other hand, the Cameroonian government is increasingly resorting to debt, which calls into question, to some extent, the effectiveness of Cameroon’s fiscal policy. Defined as all measures and decisions taken by the government and public authorities in terms of taxation, fiscal policy participates in economic policy by contributing to the financing of public expenditure and the redistribution of income. It also aims to reduce the tax burden in order to boost consumption and stimulate growth. This fiscal policy letter analyses the budgetary situation of the State of Cameroon, with emphasis on the role that fiscal policy could play in reducing Cameroon’s debt burden on economic development. After analyzing the viability of Cameroon’s public debt on the basis of the criteria adopted by international institutions such as the International Monetary Fund and the World Bank, this paper defines some fiscal policy strategies that could help keep Cameroon’s economy on track for emergence by 2035. It shows that Cameroon’s debt remains viable, but its liquidity and solvency ratios indicate that the treasury may find itself in financial difficulty over the next decade to meet debt service and principal repayments. The main fiscal policy recommendations to avoid this situation include defining and implementing a special tax regime for business support structures; following the Mauritius model by setting a sufficiently low corporate tax rate for all domestic companies; temporarily exempting domestic firms from corporate tax when they list their shares on the BVMAC; setting a time limit for the preparation, declaration and payment (or deduction at source) of corporate income tax, value-added tax, and social security contributions.
Topic:
Debt, Governance, Fiscal Policy, and Public Debt
Political Geography:
Africa and Cameroon

9. Assessing The Mechanism Of The Issuance Of Construction Permits In Cameroon

Author:
Jean-Cedric Kouam
Publication Date:
03-2021
Content Type:
Policy Brief
Institution:
The Nkafu Policy Institute
Abstract:
The building permit is a preliminary declaration that allows for the verification of a construction initiative in a given locality, in line with the respect of town planning and architectural rules in force. In Cameroon, this document issued by the local council authority is mandatory for any possible new construction or modification of an existing construction. Therefore, any construction without an official permit is liable to a penalty of 30% of the estimated cost of the building. According to Law No.2004/003 of April 21, 2004 governing the Cameroonian Urban Planning Code and the decree of 23 April 2008; the process of obtaining this document has been considerably shortened. Yet, it remains quite complex. This complexity is evident in the plurality of procedures, requirements, norms, offices, conditions, actors, documents, and stakeholders involved in the process. All these are accompanied by the heavy financial burden, time-consuming processes, boycotts, administrative bottlenecks and corruption; all of which lead to unorganized and slow urban development. Moreover, within this complexity, is the reality that such mechanisms differ from one place to another across the national territory; thereby creating some sought of uncertainty, non-uniformity, and lack of trust in the system. The improvement in the issuance mechanism of Construction Permits in Cameroon is very vital for a country that has the ambition to achieve its economic emergence by 2035.
Topic:
Infrastructure, Regulation, Business, and Economic Development
Political Geography:
Africa and Cameroon