ILO X-Rays Cameroon's Business Environment

A workshop to present the results of its survey and reforms held in Yaounde on Friday, November, 8, 2013.

In spite of reforms undertaken by government recently to create an enabling environment for enterprises to create wealth and decent jobs, a multitude of bottlenecks still exist, affecting the sustainability of enterprises and availability of decent jobs.

Such was the conclusion of a survey called "Enabling Environment for Sustainable Enterprises" (EESE 2011 & 2012) presented by the country office of the International Labour Organisation (ILO) on Friday November 8, 2013 in Yaounde. In the presence of the representative of the Secretary General at the Prime Minister's Office, Prof Touna Mama, the ILO team led by its Decent Work Sub-regional Technical Support Team Director, Dayina Mayenga, tabled findings on challenges cutting across social, political and economic spheres, after consulting over 500 enterprises nationwide in 2011 and 2012.

Macroeconomic policies

The report notes that in spite of Cameroon's macroeconomic stability, the average economic growth rate recorded in recent years remains insufficient to boost the growth of enterprises. Low income per inhabitant has also resulted in low aggregate demands thereby limiting the growth of internal markets and the development of enterprises. Restrictions on the free flow of capital above FCFA 100 million imposed by the Bank of Central African States (BEAC) is doing more harm than good to the private sector. The labour market is affected by the precariousness of jobs as well as the underemployment of youths.

Regulatory Framework

ILO's EESE 2012 survey reveals that administrative procedures for the creation and functioning of enterprises remain problematic. Legally existing enterprises are operating under the framework of national regulation that remains bureaucratic, complex and costly. Thus, in practice, enterprises generally seek to minimise or avoid business procedures. If the creation of the Centre for the Facilitation of Creation of Enterprises (CFCE) has enabled the simplification of formalities, the EESE 2012 indicates that only 50 per cent of Cameroonian enterprises are aware of its existence. The enterprises also decry the performance of the judiciary system in matters of business litigation which provokes delays in business activity. Access to Financial Services

While some banks enjoy excess liquidity, small and medium-sized enterprises, particularly, face multiple challenges in obtaining loans. Only 33 per cent of enterprises surveyed had access to bank loans.

Infrastructure

Although important investments in physical infrastructure have been undertaken lately, there still exists an important deficit in transport infrastructure and interconnection of national and sub-regional networks. Difficult access to basic services such as electricity and water weigh on private sector and competitiveness of enterprises. 70 per cent of the 500 enterprises surveyed admitted that quality of infrastructure is globally poor.

Other areas where the survey found persistent obstacles included training, business culture, protection of property rights, social security, underemployment, insecurity and corruption.