Country Trade Risk Index (ERI): 90.08 Country Risk Reference Rating: 7 (7/9)
Country Risk Outlook: Negative
Economic and trade risks
In 2012, Cameroon’s nominal GDP was US$25.94 billion, the real economic growth rate was 4.5%, the per capita GDP was US$1,220, and the inflation rate reached 2.9%. The country’s industrial structure is agriculture (20.8%), industry (27.5%), and service industry (51.6%). Cameroon’s economy faces prominent structural risks and obvious fluctuations. At present, the foreign debt burden is low and the fiscal balance is in good condition. Most sectors in Cameroon welcome foreign investment, but the business environment is generally poor, administrative corruption and bureaucracy are prevalent, and transparency is low.
Bilateral economy and trade
In recent years, relations between China and Cameroon have developed rapidly, political mutual trust has been continuously enhanced, cooperation areas have gradually expanded, and no significant diplomatic friction has occurred. China and Cameroon have signed agreements on trade, economic and technological cooperation, etc. In 2012, the bilateral trade volume was US$1.95 billion, a year-on-year increase of 26.6%. Among them, China’s exports were US$1.06 billion, a year-on-year increase of 21.7%; China’s imports were US$890 million, a year-on-year increase of 34.3%, and China had a surplus of US$170 million. China mainly exports mechanical and electrical products, textiles, high-tech products, etc., and imports crude oil, timber, cotton, etc. According to IMF statistics, in 2012, China was Cameroon’s largest trading partner. The problem with bilateral economic and trade cooperation is that the structure of trade commodities is relatively simple and there is little cooperation between the private sectors of both parties. In addition, the two countries are thousands of miles apart, have inconvenient transportation, and have large language and cultural differences, which have also hindered the development of economic and trade cooperation to a certain extent.
Business environment
The business environment in Cameroon is poor. Taxes are heavy, corporate public financial information is difficult to obtain, infrastructure is severely inadequate, energy supplies are in short supply, road network density is low, and port services are inefficient. Cameroon implements economic liberalization policies, opens its market to the outside world, and vigorously attracts foreign investment. Foreign investment is welcome in most economic fields, but foreign investment entering the oil and gas field, mineral field, forestry field, air transport field, and financial field requires the approval of the competent authorities. In order to improve government governance and the business environment, the Cameroonian government has implemented a series of reforms, but the current business environment in Cameroon is still not conducive to economic activities.
Cameroon has formed a three-dimensional transportation network of land, sea and air, but the density of the domestic road network is low, resulting in longer transit times and higher costs for goods, which not only restricts the development of Cameroon’s industry, but also affects the inflow of foreign investment.
Legal risks
The “Cameroon Investment Law” aims to promote productive investment, encourage the use of local resources, create employment, produce domestic sales and competitive export goods and services, increase the export of finished products, introduce advanced technology, protect the environment and improve the lives of urban and rural residents. level. The Investment Law stipulates that any foreign natural person and legal person can invest and engage in economic activities in accordance with Cameroon’s current laws and regulations, and enjoy the same treatment as Cameroonian nationals.
Cameroon’s economy is heavily dependent on the oil industry and is susceptible to the impact of the international economic environment. Cameroon’s economy still suffers from problems such as weak private investment capacity, high poverty rate, high unemployment rate, and high pressure on fiscal revenue and expenditure. Recently, the Cameroonian government is very eager to attract more foreign investment, promote economic growth and employment, and has implemented reform measures to improve governance and the business environment, but the results have not been significant. At present, the business environment is still poor. Insufficient infrastructure such as transportation, water and electricity, and heavy tax burdens are still the main obstacles affecting the inflow of foreign investment.
(Issuing agency: China Export and Credit Insurance Corporation)
