The Emergent Cameroon: a Golden Opportunity for Canadian Firms

Downtown Yaounde by night DR

There is an almost perfect consensus on the subject. From the State’s top executives to its diplomatic representatives, the message is clear and precise: the era of “great achievements”, of developmental projects, has begun. Cameroon aspires to becoming an emergent country by the year 2035, and no-one fathoms more the importance of forging alliances with reliable partners able to help the land of the Indomitable Lions establish itself in the New World.

Cameroon is ramping up its efforts to open itself up and seems ready to welcome partners from around the globe that are able to help it move forward. Canada, which has maintained a foothold there for decades, has all it needs to strengthen its presence and enable its companies to achieve sustainable prosperity there.

Cameroon’s new reality

A well-known contemporary once said: “Cameroon is Cameroon!”. A truism, certainly. And yet a rigorous analysis of the facts leads one to conclude that yesterday’s Cameroon is not today’s Cameroon, economically speaking. While just a few years ago, France dominated all debate in the economic realm, the World Bank recently signaled that this established order has changed. Indeed, in its Cameroon Economic Updates, the institution, which saw the light of day at the Bretton Woods Conference of 1944, revealed that Nigeria is now the country Cameroon imports the most from. The statistic came as a surprise to many, to say the least.

Cameroon’s transformation is further seen in the increasing place given to emergent countries. To be convinced of this, one merely has to observe the steady stream of foreign businesspeople and investors in the airports of Nsimalen and Douala. Consider too the Morocco-Cameroon business forum held in June 2012, during which Cameroon hosted 120 businessmen from the Kingdom. And well before that, a hundred Turkish businessmen were hosted in Yaoundé, a contingent led by their Head of State, Abdullah Gül.

China and Brazil, the emerging giants of the BRICS countries, have stoked the interest of Cameroon’s authorities. In fact, Cameroon’s Head of State has visited both countries. The Brazil stopover took place on August 4 and 5, 2010, and the final press release for President Biya’s trip commented on “the importance of having in place a platform for exchange that serves as a framework for promoting a mutually beneficial economic cooperation in promising fields.”

Yet it is China that has undeniably taken on a whole new dimension, now ranking as one of Cameroon’s top financiers. It is financing the Douala-Yaoundé highway, the Kribi deep-sea port, and many other projects. During a State visit to Beijing early this year, President Biya requalified relations with China as an exemplary cooperation.

Thus, one can easily understand the upheaval Cameroon—like the rest of Africa—is experiencing during these times of globalization. The imperative to emerge over the coming decades makes it necessary for the country to diversify its partners, who are lured by expectations of very high returns on their investment. But precisely what potential does Cameroon offer on the road to emergence, and what sectors have been identified as a priority?

Overview of Cameroon Vision 2035 and GESP

Cameroon had not equipped itself with a long-term plan in quite a while. Because it was being structurally reengineered, the government had been content to manage the national budget on a year-to-year basis. The launch of Cameroon Vision 2035 and the Growth and Employment Strategy Paper, then, signaled a paradigm shift. For Cameroon—which boasts half of the Economic Community of Central African States’ (CÉMAC) population—has begun to plan anew, to envisage a long-term future for itself.

Both documents deal with Cameroon’s emergence. One has a 25-year horizon, the other spans a decade.

The brief overviews that follow reveal the government’s ambitious vision and goals.

CAMEROON VISION 2035

•       Progress into the category of middle-income countries, defined as countries whose average per capita income lies between $3,706 and $11,455 per year (in 2007 dollars);

•       Eradicate poverty by bringing it down to a socially tolerable residual level, i.e., a poverty rate below 10%;

•       Attain the status of Newly Industrialized Nation;

•       Necessary growth rate: at least 9 or 10%

•       Dynamic population growth, from 20 million in 2010 to 40 million by 2035

(Source: Government of Cameroon)

 

GROWTH AND EMPLOYMENT STRATEGY PAPER (GESP)

•       Increase average annual growth to 7% for the period 2010–2019

•       Bring underemployment down from 75% to about 40% by 2019

•       Bring the rate of income poverty down from 39.9% to 25% by 2019

(Source: Government of Cameroon)

 

Priority sectors, growth engines and Canadian expertise

Cameroon, through its Ministry of Economy, Planning and Regional Development (MINEPAT), and the World Bank signed, in 2010, a $30 million credit agreement tied to the Competitiveness of Growth Sectors Project (PCFC). According to MINEPAT, “in addition to the agricultural sector, which has benefited from 30 billion CFA francs in support (Editor’s note: roughly $60 million) through the Agricultural Competitiveness Project (PACA), the agreement focuses first and foremost on the competitiveness of two sectors that are key for the national economy because of their great potential: the lumber industry and tourism.

Cameroon has an enormous wealth of natural resources, including an enviable variety of mining resources. Among them:

Diamond: Hundreds of millions of carats’ worth.

Iron: Cameroonians own some 2.4 billion tons of iron ore, ranking the country as the fourth-largest deposit on the planet and Africa’s second-biggest. Based on an article by Bertille Missi Bikoun in Africa 24 Magazine’s special issue No. 1, there is enough to produce 35 million tons per year for a quarter-century.

Bauxite: This mineral is used in the manufacture of aluminum and, with nearly 1.2 billion tons of it, Cameroon holds the world’s sixth-largest reserve.

Cobalt: Cameroon has one-sixth of all the cobalt on Earth.

One of the Web sites devoted to the 50th anniversary of Cameroon’s independence[3] declares that nearly 90 exploration permits have been issued, including 25 for gold, 16 for uranium, three for limestone and two for sapphire.

Meanwhile, the Mining Association of Canada claims that “mining is one of Canada’s most important economic sectors and is a major driver of its prosperity. In 2010, the industry contributed $36 billion to Canada’s gross domestic product and employed 308,000 workers in the sectors of mineral extraction, processing and manufacturing.” According to the Association’s statistics, mining represents 19% of Canadian exports and the provincial, territorial and federal goverments collect $5.5 billion in taxes and royalties. The industry also generates significant indirect economic activity: more than 3,200 companies provide it with services varying from engineering consulting to drilling equipment.

This points to the obvious potential for collaboration between Cameroon and Canada in the mining sector, especially given that a substantial portion of the former’s territory remains unexplored.

As mentioned above, SNC-Lavalin, CIMA+ and other major players already have a presence in Cameroon and their future looks rosy indeed, as the construction of infrastructure will prove a key vector for emergence over the next two decades, and another source of growth for Canadian firms.

Energy is another promising sector, and an extremely strategic one. For without energy development, there can be no industrial growth, no sustainable prosperity. Canadian expertise could once again be sought, particularly in the field of hydroelectric power.

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