A Land of Opportunity Awaits July and August Are Also a Time to Reflect; a Mid- You

Port NextYearPort Dock inKribi First Shipto

July/August 2013 • N° 6-7 BUSINESS IN CAMEROON Project Searches for “Grand Sanaga” Funding OPPORTUNITY Farmers: 30,000 TonsofCorn and 10,000 TonsofSoybeans 20 pagesofadvice A LANDOF Per Year by2018 and information in Cameroon MAJOR PROJECTS MAJOR on investing AGRICULTURE INDUSTRY SERVICES FINANCE ENERGY MINING

BUSINESS IN CAMEROON

July and August

n Cameroon, it is the time of year when the December which comes with the usual resolutions weather alternates between hot and cool. This and return to work or school. is the natural conflict between the longer dry season and the shorter rainy season. Few are But for some, work does not stop in July and Au- Ithe workers who vacation in the months of July gust. The major construction sites continue to toil. and August. Only students rest then. School holi- Dear workers, this edition is dedicated to you. days allow some to return to their villages to visit their families and participate in the harvests and July and August run together. It is the opportune other agrarian chores. time to imagine new possibilities. The investment guide you will find on page 27 will provide you Meanwhile, for most workers who live in Eu- with new ideas that will lead you to do business in rope, this monthly interval often corresponds to Cameroon. the break awaited all year – holidays, rest, family, children, celebration, marriages and, sometimes, So, to some we wish good work, to others a good travel. vacation, and to everyone, pleasant reading. At the end of the holidays, a land of opportunity awaits July and August are also a time to reflect; a mid- you. term evaluation before the major assessment in Yasmine Bahri-Domon

BUSINESS IN CAMEROON Publisher • Mediamania Sàrl • 6, rue du Léman • 1201 Genève • Suisse Publication Director • Yasmine BAHRI-DOMON Contributors • Agence ECOFIN, Jude VIBAN, John MACINTOCH • www.agenceecofin.com Operator • Médiamania Sàrl • www.mediamania.pro • Design : Jérémie FLAUX, Web : Christian ZANARDI, Proofreader : Rachelle CLOUTIER Advertisement • Médiamania, Genève • Benjamin FLAUX • Tel +41 78 699 13 72 • [email protected] In Cameroon • [email protected] • Tel +237 99 41 60 15 Printing • Rotimpres, Aiguaviva, Espagne Circulation • Albert MASSIMB • [email protected] • Tel : 00 237 94 66 94 59 ou 00 237 77 75 13 98 Free – cannot be sold

July-August 2013 / N° 6-7 -3- BUSINESS IN CAMEROON CONTENTS

034July and August 114Cameroon: Meat Tracked with Special Tags 064CASTING 12411 French Companies Eye Water and 074Palm Oil: Socapalm Calls for Price Sanitation Sectors in Cameroon Increase 124Water Scarcity in Yaoundé: Status Quo till 074Japan Supports Small-Scale Rice Farming Next December in Cameroon 134Ten Water Wells Drilled in Bertoua 074Farmer Estimates 30,000 Tons of Corn and 10,000 Tons of Soybeans Produced in 134Water Minister: “Grand Sanaga” 5 Years Searching for Funding

134An Extra 100,000 m3 of Water/Day to Douala by the End of 2014

144Tradex Sells 25,000 Canisters of Cooking Gas in Two Months

144Fuel Subsidies: Cameroon Owes its 084Cocoa Authority: Cameroon Has Refinery Exported 2,000 Tons of Certified Cocoa 1447% Increase in Gas Imports 084UCCAO Seeks CFAF 46.3 Billion to Increase its Output

084Cocoa: More Than 32,000 Farmers Trained in Entrepreneurship

094Cameroon’s Sugar Market

094New Sugar Factory under Construction in 154Cameroon: AES Sonel Wins the 2012 Cameroon Edison International Prize

104Banana Exports Fell by 23,000 Tons Last 154AES-Sonel, Creolink Communications Year Pinned for Fraudulent Installation of Fibre Optic Cables 104EU Gives Bananas in Cameroon a CFAF 27 Billion Boost 164Cameroon Contracts for Six Transportation Infrastructure Projects 104Two National Companies to Build Four Food Reserve Stores 174First Ship to Dock in Kribi Port Next Year 114Bafoussam to Produce 7,000 Pigs per Year

-4- July-August 2013 / N° 6-7 BUSINESS IN CAMEROON

174Cameroon Plunged into Debt to Finance 234CEMAC States Announce End of Visa its Economic Transformation Requirements for their Citizens

184Three Foreign Companies to Build 244National ICT Agency Fights Online Nsimalen Superhighway for CFAF 154 Crimes Billion 244Copyright: Culture Minister Backs Socam 184Synohydro Wins Mora-Dabanga Road Rehabilitation Contract

184Cameroon Needs CFAF 100 Billion for Road Maintenance

194Controversy Surrounds New Seat for 254Express Union Fights Back Ministry of Public Works 254Dja Reserve: Eight Poaching Camps 204Cameroon to Merge Two Aviation Laws Destroyed, Weapons Seized 204Turkish Airlines Leads Cameroon’s 254Road Fines: Over CFAF 113 Million for Market the State’s Treasury in Two Months 204 Douala Airport: GICAM Deplores INVESTOR’S GUIDE “Unfriendliness” of Airport Police, Customs Officers 284Starting a company in 72 hours? It’s possible in Cameroon!

304Land tenure: Emphyteotic leasing and concessions come to investors’ rescue

324“It’s the application of measures that is most lacking”

214Petroleum Pipeline: Gov’t Launches 334The Mining Code: a gold mine for Tender investors

214New Tax Office for Small Businesses in 364Small-scale mining: An area reserved for Yaoundé nationals

214US Ambassador: Trade between 384Oil mining: the great deal of the Cameroon and US Hit CFAF 250 Billion production sharing contract Last Year 414Cameroon’s oil-rich subsoil 224NGO: Cameroon Lost CFAF 6,000 Billion in 10 Years 424Electricity: investment opportunities after the announced end of the Aes Sonel 224World Bank: Policy Implementation in Cameroon is Slow 444Cellular phones: the lines are always open

224First Compensations for Yaoundé-Douala 464“The business climate in Cameroon Superhighway Victims remains troubling”

234Bakassi Will be Fully Cameroonian as of 474Natural gas sector: imports are filling up August 14, 2013 on natural gas

July-August 2013 / N° 6-7 -5- BUSINESS IN CAMEROON

BIYA APPOINTS NEW BUDGET AND TAXATION CASTING DGS

In a presidential decree signed on June 14, 2013, Paul Biya appointed new Di- rector Generals for Budget and Taxa- tion, and renewed the positions of the DGs for Customs and Treasury in the Ministry of Finance. Samba Antoine Félix became the DG of Budget. The senior public administrator was formerly Director of General Affairs in the Ministry of Mines, In- dustries and Technological Development. Mopa F. Modeste was appointed DG of Taxes. He was previously with the International Monetary Fund. Minette Libom Li Likeng, the DG of Customs since Janu- ary 17, 2008, kept her post. Sylvester Moh Tangongho was upgraded from interim to full DG of Treasury and Mone- tary Cooperation, a position he has held since October 25, 2011 following the death of Hamadou Sambo. YOOMEE NAMES NEW TRANSPORT MINISTER GENERAL MANAGER IN HITS HARD AT CAMAIR- CAMEROON CO’S NEW DEPUTY GM

In May 2013, Lex Guez became the Not mincing his words, the Transport new General Manager of YooMee. Minister, Robert Nkili, stated that He replaces Stéphane Abrahams, the Camair-Co’s new Deputy General founding General Manager of YooMee Manager faces a difficult task ahead. Cameroon, who is leaving for personal Frédéric Mbotto Edimo was instated reasons. on June 16, 2013 in Douala. Guez has ten years of experience in “Present a real plan to the Head of State managing various telecommunications to end the financial crisis.” Like many others, this phrase in projects, mainly in Africa. These in- the Minister’s speech illustrates the many challenges that clude the build-up of a WiMAX operator in the DRC and await the national carrier’s new Deputy GM. a large satellite project in Morocco, his company said. The 58 year-old Mbotto Edimo was appointed by the In a statement on its website, Mr Dov Bar-Gera, YooMee Head of State, Paul Biya, on June 14, 2013. He joins the Cameroon’s Chairman, said: “I regret that Stéphane decided Camair-Co team at a time when the company is “progress- to leave us, but I fully respect his family motivations. Stéphane ing,” according to Nkili. has contributed significantly to the development of YooMee The Minister spelled out four tasks for Mr Mbotto Edimo. Cameroon, and was a driving force in making YooMee the First, contracts must be compatible with the company’s fi- leading broadband operator in Cameroon. nancial means. Second, unnecessary spending must be elim- We are very fortunate that Lex is joining the YooMee family inated. Third, domestic and regional routes that are known to and will lead this great team here in Cameroon. We are confi- be profitable should be prioritised, since Camair-Co is better dent that under the leadership of Lex, YooMee Cameroon will positioned on these lines than on international routes, where continue to develop its top market position, expand further, and competition is fierce. Finally, the company must win back the continue its major contribution to the people and businesses of confidence of passengers, especially with regards to frequent Cameroon.” delays and flight cancellations. YooMee Cameroon is a subsidiary of YooMee Africa, a The Transport Minister added that with his 25 years of ex- privately-held broadband operator based in Zurich, Swit- perience in the aerospace industry, Mr Mbotto Edimo has zerland. It is also a wireless Internet provider in Cameroon. “a solid understanding of the heavily-indebted company.”

-6- July-August 2013 / N° 6-7 BUSINESS IN CAMEROON AGRIBUSINESS

Palm Oil: Socapalm Japan Supports Small- Calls for Price Increase Scale Rice Farming in In addition, company exec- utives argue that the price Cameroon increase would promote On June 24, 2013, the Cam- social and agricultural in- eroon Tribune reported that vestments. Japan will invest over 100 million francs CFA on rice. The According to its financial announcement came a week support rice production un- reports, investments by So- after a workshop on this topic til 2014 by helping farmers A leader in the sector, Soca- capalm dropped 45%, from was held in Yaoundé. to reduce post-harvest losses palm plans to increase the 21 billion francs CFA in According to the newspaper, and allowing them to acquire price of palm oil from 500 2011 to 12 billion in 2012. the money aims to support improved seeds. to 525 francs CFA per kg. the Cameroonian govern- Rice is a staple in Cameroo- This was revealed during The government’s reluc- ment’s efforts through the nian households, but the the company’s ordinary tance to increase the price production of rice seeds and country produces only a general assembly on June 6, of palm oil is linked to the the use of machines in small fraction of what it needs to 2013, indicated Le Quotidi- high cost of living. During rice farms and other produc- cover demand, which is es- en de l’Economie. the extraordinary session of tion segments. timated at 650,000 tons per the palm oil sector regula- The funds are part of the year. In 2012, Cameroon Socapalm wants the govern- tory commission (CRFHP) Emergency Rice Initiative in spent 96.7 billion francs CFA ment to increase the price in March 2013, producers Cameroon, which aims to to import rice. of a kg of palm oil. Its Gen- of this rare commodity eral Manager, Jean Pierre pushed the government to Charbon, and its Chairman increase the price from 450 Farmer Estimates 30,000 Tons of the Board, Michel Nou- to 550 francs CFA for a kg. lowe, told shareholders that Yet in its role as referee, the of Corn and 10,000 Tons of they would meet the Minis- state of Cameroon refused ter of Commerce on June 7, to give in. Soybeans Produced in 5 Years 2013, although the meeting Agribio, a corn and soy- ply: current production is was not confirmed at press After the street demonstra- bean project, was recently around 1.6 million tons per time. tions against the high cost launched in the localities of year, while demand is over of living in February 2008, Bantoum I and II, situated in two million tons. According to Socapalm, the government surprised the Bangangté council area Through the Ministry of an increase in the price of observers by approving a of Cameroon’s West Region. Economy, the government palm oil would permit the price increase from 300 to According to the project’s has promised a grant of 500 company to reduce its debt. 450 francs CFA per kg, to owner, François Djonou, at million francs CFA to sup- the advantage of producers. least 3,000 hectares of culti- port the project, which will Indeed, between January vable land will be farmed for cost a little over 8 billion and December 2012, the Make no mistake: the price an expected total yield per francs CFA. Mr Djonou has company’s debt jumped of palm oil continuously year of 30,000 tons of maize confirmed that 250 million from 3.27 to 8 million increases. It now stands be- and 10,000 tons of soybeans francs CFA have already been francs CFA, reported Le tween 600 and 700 francs by 2018. disbursed, reported the state- Quotidien de l’Economie CFA in some markets, up Despite the government’s owned daily Cameroon Trib- based on data in Socapalm’s from 500 a few months ago. efforts, the demand for corn une of July 12, 2013. financial reports. remains higher than sup-

July-August 2013 / N° 6-7 -7- BUSINESS IN CAMEROON

Cocoa Authority: UCCAO Seeks CFAF 46.3 Billion to Cameroon Has Increase its Output Exported 2,000 year for the Arabica variety and from 20,000 to 33,000 per year for Robusta, Tons of Certified while cocoa production would grow thanks to the opening of a new 2,000 Cocoa hectare plantation. UCCAO also seeks to encourage its members to produce crops (like corn) and to get into other forms of farming (like poultry). According to the cooper- On June 27, 2013, UCCAO, an agricul- ative, such measures would increase the tural cooperative in the West Region of income of the farmers who constitute its Cameroon, launched the first phase of membership. its new development plan in the Koung- Of the 62.5 billion CFA that are need- Khi Division. The five-year project ed to support the project, 74% (CFAF Cameroon has already exported (2013-2018) will cost 62.5 billion francs 46.3 Billion) will come from a third 2,000 tons of certified cocoa on a CFA, the Cameroon Tribune reported on party and UCCAO will provide the total annual production that is pro- June 28. rest. jected at 230,000 tons, announced According to the state-run daily, UC- Created on October 17, 1958, the Union Michael Ndoping, the General Man- CAO aims to increase its coffee and of Arabica Coffee Farmers was renamed ager of the National Cocoa and Cof- cocoa production, and branch out into UCCAO in 1978. Among other things, it fee Board (NCCB) during the open- other areas. Coffee production would processes and packages coffee and mar- ing of an international workshop on increase from 8,000 to 11,500 tons per kets the grain for its members. cocoa certification held in Douala on June 24, 2013. Cocoa: More Than 32,000 Farmers “Certification is a major challenge throughout the cocoa industry, from production and processing to market- Trained in Entrepreneurship ing,” Le Quotidien de l’économie re- The German International Coopera- ported on June 25, quoting Mr Ndop- tion (GIZ) is training farmers on how ing. to make their farm profitable by measuring its size and determining its inputs The government of Cameroon has and outputs. adopted several measures to promote This project has been running since to record their expenses, revenues, work the growing of quality cocoa in the August 2009. A mid-term review (2009- done, and the inputs used. country. 2012) of GIZ’s Sustainable Cocoa Busi- 70% to 99% of them have adopted good ness project was presented Monday June farming techniques and begun to renew According to the NCCB, the govern- 17 2013, in Yaoundé during a workshop their aging cocoa plantations. Moreover, ment has offered tax incentives to with stakeholders, indicated the bilin- 15% to 51% have organised themselves those manufacturers who commit to gual daily Cameroon Tribune. into cooperatives or associations. producing fertilisers for the agricul- 32,562 cocoa farmers – 25% of whom Project activities were carried out in the tural sector, which are greatly needed are women – now farm as agricultural Centre, South, and Southwest regions, by cocoa farmers. businesspersons. This outcome exceeds and cocoa production in these zones has expectations, since only 25,000 famers increased by an average of 39%. Other organisations are also promot- were supposed to be trained. To strengthen and support the trained ing good farming practices in the co- For Annette Coly, the head of coopera- farmers, five business service centres coa sector. For example, the German tion at the German embassy in Yaoundé were opened. New centres are being cre- agency for international cooperation and chairperson of the workshop, the ated in the South West region. (GIZ) has trained more than 32,000 aim of the program was to “change the Also implemented in Nigeria, the Ivo- cocoa farmers on how to work as busi- habits of cocoa beans growers.” ry Coast, Ghana, and Liberia, the Sus- ness persons and make their farms At the end of the training, between 37% tainable Cocoa Business program aims profitable by measuring farm size and and 69% of farmers opened bank ac- to double the income of cocoa farmers their inputs and outputs. counts, planned production, and began within 10 years.

-8- July-August 2013 / N° 6-7 BUSINESS IN CAMEROON

Cameroon’s Sugar Market At present, Cameroon’s sugar market is Yaoundé (Nkoteng and Mbandjock), mostly supplied by SOSUCAM, a sub- 18,700 hectares of plantations produce sidiary of the French group SOMDIAA approximately 130,000 tons of sugar per that is also present in Gabon, Congo, year. Of this, 105,000 tons are reserved Ivory Coast, Chad, and the Central Af- for the local market and the rest is ex- rican Republic. ported to Chad. Established in 1964, SOSUCAM is In order to supplement SOSUCAM’s owned at 72.72% by SOMDIAA, and production, the Cameroonian govern- the rest is held by the government of ment routinely allows sugar to be im- Cameroon and private shareholders. ported tax and duty free. In 2012, it im- At two sites situated 100 km north of ported 25,000 tons of sugar. New Sugar Factory under Construction in Cameroon An agro-industrial sugar factory, Jus- tin Sugar Mills (JSM), is being built in Bertoua-Batouri, in the East Region of Cameroon. The factory is expected to produce 440 to 660 tons of sugar per day and cost approximately 60 billion francs CFA (about $120 million). It will improve SOSUCAM’s ability to meet national demand, which is estimated at over 200,000 tons per year. The JSM factory, which was started by Cameroonian businessman Dieudonné Dong Dong Thry, will cover over 35,000 hectares. It will farm sugar cane (the main raw ma- terial), and have a 16 MW electricity production unit (expandable to 80 MW) and a distillery to produce 13.5 million litres of ethanol per year, reported the Chinese news agency Xinhua on July 2, 2013. Last April, JSM signed a contract for the plant with an Indian company called Hi-Tech at a cost of 40 million dollars (about 20 billion francs CFA). In the meantime, sugar cane is already because the time table has not been Hi-Tech will handle the processing of being cultivated. “We have […] four respected. For example, the State of the sugar cane that will grow on more hectares of industrial cane, which are Cameroon, which acquired a 15% than 20,000 hectares. reaching maturity,” a worker at the site share of JSM’s capital, is slow to re- Basic infrastructure such as housing, told the government-run daily Came- lease funds. schools, training centres, hospitals, roon Tribune. According to estimates, the sugar and a shopping mall will also be built, Yet the plant may not become op- plant will create more than 5,000 di- the agency said. erational in May 2014 as planned rect jobs and 2,500 indirect jobs.

July-August 2013 / N° 6-7 -9- BUSINESS IN CAMEROON

Banana Exports Fell by 23,000 Tons Last Year In 2012, banana exports decreased by fell by 18,000 tons. 23,000 tons, according to figures from According to ASSOBECAM’s Secretary, the Association of Banana Producers in Owona Nkono, the decline is due to the Cameroon (ASSOBECAM). Similarly, many problems producers face. He cites exports from other major agro-indus- climate change and competition from tries fell from 249,021 tons in 2011 to Latin American countries like Costa 226,157 tons in 2012, an almost 10% Rica and Ecuador as the most impor- decline. tant. Plantations du Haut Penja (PHP) re- Access to funds is another major prob- mains the leader in the sector. It export- lem. According to Mr Nkono, the Euro- ed 81,226 tons in 2012 against 79,483 pean Union’s 27.29 billion francs CFA tons in 2011, an almost 3% reduction. grant to assist banana producers in With 51,374 tons exported last year, the Cameroon will help, although the prob- Cameroon Development Corporation lem will not disappear. The banana sec- (CDC) was the second biggest exporter tor represents 6% of the country’s gross of the crop, even though its production domestic product (GDP). EU Gives Bananas in Two National Companies Cameroon a CFAF to Build Four Food Reserve Stores 27 Billion Boost According to a June 2013 On June 11, 2013 Yaouba statement by the Minis- Abdoulaye, Minister Dele- try of Economy, Planning gate in Cameroon’s Minis- and Regional Develop- try of Economy, Planning ment (MINEPAT), food and Regional Develop- reserve stores will be built ment (MINEPAT) signed a in Yaoundé, Foumbot, financing agreement with Mbouda, and Mvangan. Raul Mateus Paula, the This project is one of the 21 public-private projects that the European Union’s Head of government of Cameroon called for tender on January 7, 2013. Delegation in Cameroon. Two national companies have been pre-selected to do the job. The agreement, which was Commerçants Associés du Cameroun will build the food re- signed in Yaoundé, aims to serve stores in Yaoundé (Centre Region) and Mvangan (South improve the situation of Region), while Aster Dependable Services will be in charge of Cameroonian bananas on those in Foumbot and Mbouda in the West Region. the European market. In another statement, Minister Emmanuel Nganou Djoumessi According to the Camer- asked the companies to contact CARPA, the MINEPAT de- oon Tribune of Wednesday partment that is in charge of partnership contracts, to discuss June 17 2013, the CFAF the terms of the memorandum of understanding (MOU). 27.29 billion boost is intended to finance special support “The MOU launches a pre-selection dialogue for signing the measures for African, Caribbean and Pacific (ACP) coun- public-private partnership contract,” the statement said. tries that supply bananas to the EU. These four projects in the agro-industrial sector join six others Specifically, the newspaper reported that the money will in the transport infrastructure sector, whose potential con- be used to increase productivity and to improve farmers’ tractors were selected during the week of June 17, 2013. Eleven working and living conditions. projects have yet to be decided upon. According to Yaouba Abdoulaye, banana production in Cameroon lacks storage facilities. Food is abundant just after a Cameroon remains insufficient, at less than 250,000 tons harvest, but it quickly rots and the subsequent supply shortage per year. leads to price increases.

-10- July-August 2013 / N° 6-7 BUSINESS IN CAMEROON

Bafoussam to Produce 7,000 Pigs per Year wa for fisheries and aquaculture, and the Centre for corn. Agropoles will support a group of young pig farmers in the West who want to strengthen their capacity and increase production from 3,100 pigs to 7,300 pigs per year in the near future. The program rests on a total investment of over 853 million francs CFA, of which 567 million comes from producers and 285 million from the government. Among other things, the state will offer 310 sows, 2,100 piglets, 3,100 bags of food for sows, and 10,500 bags of There are new opportunities for pig for the production and processing of feed to fatten pigs. It will also buy 850 farmers in the West region of Came- pigs in the West region, which was automatic watering cans, 550 feeders, roon. As of this year, pig production launched on Friday 14, 2013 in the 100 boots and work clothes, 10 wheel- should increase significantly to meet conference room of the Bafoussam I barrows, freezers, automatic syringes, a the population’s growing demand and Council. well-equipped building, and a grid. significantly reduce the need to import The program is expected to produce Bernard Nguetchouessi Souop, who is food, which causes major losses of for- 7,300 pigs per year, i.e., 3,650 pigs per the president and representative of pig eign exchange. semester. It began in January 2013 and breeders in the West, guaranteed that This increase will be made possible has already identified the Littoral region breeders would keep their promise to thanks to another Agropoles project for poultry, the South for pork, Adama- contribute financially to the program. Cameroon: Meat Tracked with Special Tags

Following a decision by Cameroon’s certified by veterinary inspectors,” Dr Minister of Livestock, Dr Taiga, meat Bawe told CT. that is prepared in the country’s Specific markings are also engraved slaughterhouses is now certified with on the tags. For example, CMR means a tag, as is the current practice around Cameroon, ISV indicates that the meat the world. was inspected by a veterinarian inspec- On June 1, 2013 at the SODEPA tion team, and CE means that the beef slaughterhouse in Yaoundé, 280 was slaughtered in the Centre region. animals were butchered and tagged Also, if “7” appears on the beef, it with about six labels, its Director, means that it was killed in the Mfoun- Dr Nfor Mohamadou Bawe, told the di Division, while “1” indicates that it state-owned daily Cameroon Tri- was slaughtered at Yaoundé’s first ab- we call safe and wholesome beef for the bune. attoir, SODEPA. consumer,” Dr Bawe noted. “In case of Made out of steel, the tags are non-poi- With these measures, Cameroon seeks any disease, we should be able to know sonous and unalterable, and each has to conform to the current practice where the beef came from,” he added. a different meaning. “Green stands for around the world. “Meat leaving any However, there is currently no mech- acceptable, red for rejected, and the oval slaughterhouse must be certified by a anism to control beef that is illegally blue tag shows that the meat has been veterinary inspector to guarantee what slaughtered.

July-August 2013 / N° 6-7 -11- BUSINESS IN CAMEROON WATER

11 French Companies Eye Water and Sanitation Sectors in Cameroon

CAMWATER, a water utility company entrusted with the development, rehabilitation, and management of drinking water infrastructure, is currently carrying out urban water schemes in Cameroon. The activities of 11 French companies suggest that there is a strong French interest in lished in 2013 by the CDE. Last 29 other stations seems to be a this sector. year, only 18,600 were established. fitting solution, along with con- Cameroonians lack access to The UBIFRANCE trade mission structing new pipelines to more drinkable water. According to noted that increasing the capacity neighbourhoods. figures from the water distribu- of the 89 treatment stations and tion corporation (CDE), only 334,607 subscribers (of which 95% are individuals and 5% companies) are supplied with water. Water Scarcity in Yaoundé: These figures were communicat- ed during a symposium on water Status Quo till Next December and sanitation held on June 17 in Douala by the trade mission of After a field trip to the Mefou and Akom- water […] per day,” said Stéphanie Ngo UBIFRANCE, the French agency nyada water stations (which are currently Ntamack, an engineer with Aspac Cemac. for international business devel- being renovated), Jean William Sollo, the opment. General Manager of the Cameroonian To deal with frequent power outages, the The symposium was an occasion Water Utilities Company (CAMWATER), Akomnyada station, which is situated 4 for CAMWATER, the CDE, and confirmed to the Cameroon Tribune that km from Mabalmayo (the headquarters the Ministry of Water and Energy the daily supply of water to Yaoundé will of the Nyong and So’o divisions in the to promote investment opportu- increase from 100,000 to 190,000 m3 by Centre region), has a single generator that nities in the water sector. next December. can only provide 50% of the water supply, Officials from the French Devel- which is then distributed to priority areas. opment Agency and the African Valued at 1.5 billion francs CFA, the ren- Development Bank were also ovations at the Akomnyada station are As for Mefou, the project by the French present. Franco-Cameroonian jointly funded by Cameroon and Belgium. development agency will pump 50,000 m3 partnerships and joint ventures The work, which is being done by the Bel- by December 2013. are expected to result from this gian company Aspac Cemac, consists of meeting. installing two new pumps: one to enhance Yet the water problems in Yaoundé will not From an estimated population of the uptake of water, the other to release the be resolved until 2018, when CAMWATER 20 million or more, only 9 million water into the distribution system. will tap 300,000 cubic meters of water per Cameroonians are covered by the day from the Sanaga River. The city will public water system. Some 20,000 “With the new electric pump, we will go then receive a supply of about 500,000 m3 new connections should be estab- from 100,000 to 130,000 cubic meters of per day, indicated Mr Sollo.

-12- July-August 2013 / N° 6-7 BUSINESS IN CAMEROON

Ten Water An Extra 100,000 m3 of Wells Drilled Water/Day to Douala by the End of 2014 in Bertoua The water plan called Phase II Yato The ten wells, which cost 98 million francs is expected to pump an addition- CFA, were financed by the municipality of al 100,000 m3 of drinking water Bertoua II, the Support Fund for Councils, per day to Douala by 2014, said and Feicom. Their water was analysed by the the management of Camwater, the Centre Pasteur, a reputed French laboratory, country’s water utility company, in which declared that it was fit for drinking. a statement after a site visit on July “The water that comes out of these wells is clear 6, 2013. and clean, and it was analysed by the Centre That day, the project was visited by and the rest by Camwater. Pasteur,” Messing Balla, a hydraulic engineer, Camwater’s Chairman of the Board The second phase, which is cur- confirmed at the site. (Jerome Obi Eta) and its General rently underway, is funded with a Inhabitants see the wells as a blessing. “We are Manager (Jean Williams Sollo), as 44.605 billion francs CFA loan from relieved that clean water is now available. I don’t well as other Board members. the same contributor. have the words to express my joy!,” the district Efforts to improve the quantity and Douala’s water needs total head, Ngaikada I Mambéré Emmanuel, told quality of water in the econom- 250,000m3/day. The supply gap the state-run Cameroon Tribune on June 25, ic capital started in 2009. Phase I should be bridged with new urban 2013 at a ceremony in Bertoua. cost about 18 billion francs CFA, of drillings in Massoumbou and Ja- Committees exist in each neighbourhood to which 11 billion were financed with poma, two towns that are close to ensure that the wells are properly maintained. a loan from the Exim Bank of China Douala. Water Minister: “Grand Sanaga” Searching for Funding “The government is currently searching for funding to extract water from the 890-km Sanaga River and transport it to the capital, Yaoundé,” Basile Atanaga- na Kouna, the Minister of Energy and Water, said in an interview granted to the Cameroon Tribune on Monday July 1st 2013. The Grand Sanaga Project is expected to provide 300,000 m3 of water per day, a quantity that could be increased to 400,000 m3 per day. The studies are also almost complete, the Minister reported. Last month, Jean Williams Solo, the General Man- ager of Camwater, the country’s water utility company, said that Yaoundé’s water problems would not be solved until 2018, when water would be tapped from the Sanaga and transported back to Yaoundé. Detailed preliminary studies and environmental impact assessments are currently available. In addition, the contractor (the Chinese company CMEC) is tracing the itinerary of the pipeline that will carry water from Batschenga (a village on the banks of the Sanaga) to Yaoundé. According to the Minister, the terms of reference for hiring a consulting engineer will be available soon. Sanaga River

July-August 2013 / N° 6-7 -13- BUSINESS IN CAMEROON ENERGY Tradex Sells 25,000 Canisters of 7% Increase Cooking Gas in Two Months said on May 30th 2013. in Gas The best sales were recorded in the company’s headquarters in Yaoundé, the political capital of Cameroon. Imports In order to attract customers, the company, which is a subsidiary of the state- owned National Hydrocarbons Corpo- ration (NHC), offered a discount on the first 5,000 canisters of cooking gas (sell- ing them at 23,500 francs CFA instead of 30,000) and sold empty canisters for only 17,000 francs CFA each. The cooking gas market in Cameroon has grown dramatically in less than six Since launching its cooking gas in April months. Several competitors, such as this year, Tradex, a petroleum products OiLibya and MRS, are fighting for a distribution company, has sold “more place on the market. They join veterans than 25,000 of the first 30,000 canister like Glocalgaz, SCTM, Total, Camgaz, consignment,” the news Agency Ecofin and Aza-Afrigaz, among others. In 2012, gas imports for the domestic market jumped by 7%, according to a statement issued on June 21, 2013 by the Hydrocarbons Prices Stabilisation Fund Fuel Subsidies: Cameroon Owes (CSPH) following a board meeting to approve last year’s accounts. its Refinery According to the CSPH’s statement, these imports cost 33,156 billion francs Subsidies on gas prices are paid by the ade. Since 2008, the government has CFA. government through the National Re- frozen fuel prices at the pump and sup- Worse still, on a 12.5 kg gas canister that fining Company (Sonara), but the for- ported the surplus in the form of grants was sold to consumers for 6,000 francs mer rarely pays its dues to the latter. to Sonara, which obtains its raw materi- CFA, CSPH paid 5,674 francs CFA in “The accumulation of arrears that are al from Nigeria and Equatorial Guinea. counterpart financing. due to Sonara undermines the reputation “But the government does not regularly Although the CSPH’s board approved of and trust in the state,” claimed Jean pay the subsidy due to a serious liquidity the 2012 accounts, the statement did not van Houtte and Samah Mazraani, econ- problem, which could cause the closure of provide specific numbers. omists at the International Monetary the refinery because of a lack of raw mate- In Cameroon, the domestic gas mar- Fund (IMF) on May 13, 2013 during a rial,” Jeune Afrique reported quoting an ket has been transformed in the last six seminar in Yaoundé on energy subsi- internal source at Sonara. months, although Cameroonians still dies, reported Jeune Afrique. In the meantime, the company uses have a minimum of choice between dif- Arrears amounted to over 220 billion the banks to survive. Furthermore, the ferent brands. francs CFA in late 2012. This amount amount of the grant is greatly underes- To reduce this scarcity, the CSPH is cur- adds to the “financial difficulties” of timated by the government. This year rently building a domestic gas filling Cameroon’s refinery, whose accounts for instance, only 220 billion francs CFA plant in the town of Bertoua, which is are systematically examined by each were budgeted, but the real value is esti- located in the East Region. According to IMF mission. mated at 400 billion francs CFA, accord- its Chairman of the Board, Luc Magloire World prices for black gold increased at ing to the Finance Minister, Alamine Mbarga Atangana, the plant is 70% an annual rate of 16% in the past dec- Ousmane Mey. completed.

-14- July-August 2013 / N° 6-7 BUSINESS IN CAMEROON TELECOM Cameroon: AES Sonel Wins the 2012 Edison International Prize AES-Sonel was awarded the 2012 Edi- son Prize on June 11, 2013 in San Fran- cisco. The award recognises the Group’s significant investments in Cameroon, which have improved electricity distribution in the country. Awarded by the Edison Electric Institute (EEI), the prize is the most prestigious award in the electricity sector in the United States. For Tom Kuhn, EEI’s President, AES- Sonel was honoured for its outstanding leadership, dedication, and contribution to the advancement of the power industry for the benefit of all. On behalf of his staff, Jean David Bile, the CEO of AES Africa and of AES- Sonel, said that the company was very happy to receive the prize. Thomas Edison was “It recognises the permanent state of an American inven- mind that is shared by all people in our tor and businessman. business. This state of mind is, among other things, the pursuit of excellence and shareholders, and institutions, and of to the successful public-private part- the fulfilment of commitments as prior- course the environment in general,” said nership that exists between AES and the ities in all relations between AES-Sonel the Cameroon-born Mr Bile. government of Cameroon, which could and its employees, customers, suppliers, For him, this award will give visibility serve as a model for Sub-Saharan Africa. AES-Sonel, Creolink Communications Pinned for Fraudulent Installation of Fibre Optic Cables In a statement published in the Cam- communications in Cameroon. eroon Tribune of May 30, 2013, Came- It recalled that the establishment and roon’s Telecommunications Regulatory operation of telecommunication net- Agency (ART) claimed that AES-Sonel works that are open to public or private and Creolink Communications do not use require permission by the Ministry have operating licenses. According to of Telecommunications after an initial ART, these companies have begun to lay clearance by ART. optical fibre networks on certain roads A similar case dates back to Septem- in Cameroon without the proper au- ber 2012, when a fibre optic network Telecommunications (CAMTEL) were thorisations. was fraudulently laid along the Doua- apprehended. CAMTEL is the only ART claims that the operators plan to la-Yaoundé highway. After a govern- company that is authorised to lay fibre sell transmission without prior author- ment-initiated investigation, employ- optic cables in Cameroon. isation, which is a violation of the De- ees from Creolink Communications As of last month, Cameroon’s fibre optic cember 2010 law governing electronic wearing jump suits from Cameroon network covers 6,000 km.

July-August 2013 / N° 6-7 -15- BUSINESS IN CAMEROON INFRASTRUCTURE Cameroon Contracts for Six Transportation Infrastructure Projects Eight companies that are potential the seaside city of Kribi, a growing contractors for six projects in the metropolis. Goods would be ferried transportation sector have been on this line to the Kribi deep sea- selected, according to a statement port, which is under construction. by the Ministry of Economy, Plan- According to the MINEPAT state- ning and Regional Development ment, Bouygues and DTP Terrasse- (MINEPAT) issued on June 10, ment, a French consortium, would 2013. construct this railway. Guemgang/LPDC Consortium: Out of the 21 projects calling for Flasworx Capital Management: G-power cement plant private-public partnerships, these Douala-Limbe railway There is also the Guemgang/LPDC six projects would improve the Linking by rail Douala (the coun- Consortium that will build the spe- country’s transportation infra- try’s economic hub) to Limbe (a cialised port for cement in Limbe. structure. Two projects are on port seaside resort town) would facil- The G-power cement plant, a Kore- infrastructure, three on railways, itate the movement of goods and an company that produces 800,000 and one on roads. Foreign compa- persons to and from both cities. metric tons of cement per year, is nies from France, South Korea, and Although Douala has Cameroon’s located there. South Africa were selected, but local companies could win sub-con- However, these companies have a tracts. These foreign companies long way to go before work starts would build, own, operate, and on the sites. then transfer the infrastructure to the state of Cameroon. “The Ministry of Transport will ex- amine in detail the technical offers by Bolloré Africa Logistics: Kribi these pre-selected companies, exam- deep seaport multi-purpose ine adjustments that they could make terminal to their projects (…), and negotiate The building of a multi-purpose the contract terms,” Pauline Irene terminal is the second phase of sole port, heavy cargo ships could in Nguene, President of the Support the on-going Kribi deep sea port, the future dock at the Limbe deep Council for the Realisation of Part- which is to be built by Bolloré Af- seaport, which is said to be natural. nership Projects (CARPA) at the rica Logistics. Located in a grow- Consequently, goods would enter MINEPAT told the Cameroon Trib- ing industrial zone, the terminal the country in Limbe, and then une Tuesday June 11, 2013. would facilitate the transportation be moved to Douala by rail. The of goods from the numerous min- 70-km railway line would be con- The government has given the con- ing ventures in the South and East structed by a South African compa- tractors six months to gather the regions of Cameroon. It could con- ny, Flasworx Capital Management. necessary funds after the memo- sist of a seaport, a ferry terminal for randa of understanding are signed. cargo and passengers, and a cruise Alstom Transport S.A: Yaoundé- terminal. Douala tramways The president of CARPA further Alstom Transport S.A would build indicated that some projects could Bouygues and DTP Terrasse- the Yaoundé-Douala tramways, a start earlier, except for the tramway ment: Edea-Kribi railway small train system that is designed project by Alstom Transport S.A, The 100-km railway line would to transport people and materials in which has yet to conduct environ- link the energy town of Edea to a local region. mental impact studies.

-16- BUSINESS IN CAMEROON

First Ship to Dock in Kribi Port Next Year The China Habour Engineering Com- pany (CHEC), the developer that works as an Engineering, Procurement and Construction Contractor (EPCC), agreed to deliver the keys of the com- missioned project to Cameroon, Patrice Melom added.

85% of the project is funded by the Export-Import Bank of China (China Exim Bank), while the remainder is covered by Cameroon.

The Kribi port has two specialised ter- minals: a multipurpose terminal and a container terminal.

Initiated in the 1980s, the project was actively pursued only in 2008. Con- struction began on December 27, 2010 after Cameroon completed the Heav- In June 2014, the first vessel will drop nator, in an interview published in the ily-Indebted Poor Country Initiative anchor at the Kribi deep seaport, one of Cameroon Tribune of June 17, 2013. The (HIPC) and subsequently allowed to re- the components of the city’s industrial Kribi port is located about 200 kilo- sume large-scale investments after two port complex. The news was confirmed metres from Douala, the economic cap- decades of structural adjustments. by Patrice Melon, the project’s coordi- ital of Cameroon. Cameroon Plunged into Debt to Finance its Economic Transformation Cameroon’s debt is estimated at 2,449.6 billion francs CFA (18.5% of GDP) at the end of December 2012, according to a recent report by the country’s management debt fund, the CAA. This represents an increase of 217.6 billion francs CFA compared to the 2011 estimate of 2,232 billion francs CFA.

The external debt is mainly constituted of loans from commercial banks, multilateral partners (such as the IMF and the ADB), and countries (such as Chi- na, France, Spain, and Japan). Among others, government bonds make up the internal debt.

The CAA report claimed that Came- roon is in a borrowing spiral to “begin talked about 215 km highway between CAA is a public company that was cre- work in various sectors.” Yaoundé and Douala. To finance its con- ated on August 28, 1985. Its main objec- struction, Cameroon borrowed 241.4 tive is to render Cameroon’s financial Roads alone represent 45% of these billion francs CFA from Eximbank Chi- market safe and reliable. commitments, which includes the much na on March 8, 2013.

July-August 2013 / N° 6-7 -17- BUSINESS IN CAMEROON

Three Foreign Companies to Cameroon Needs Build Nsimalen Superhighway CFAF 100 Billion for for CFAF 154 Billion Three companies will build the Road Maintenance road, which will be divided into three sections: Synohydro will build the Ahala-Carrefour Nsam- Trois Statues stretch (5.8 km); the China Road and Bridge Cor- poration (CRBC) will build the OiLibya-Mess des Officiers-Poste centrale stretch (1.9 km); and, “The cost of the two phases is 154 bil- Arab contractors will build the lion francs CFA, or 67 billion for the Warda-École de police-Carrefour first phase and 87 billion for the sec- Sous-Préfecture Tsinga stretch ond,” the Minister of Housing and (2.1 km). Urban Development (MINHDU), The road will have a cross section of Jean Claude Mbwentchou, said in 2 × 3 lanes, medians, and sidewalks. May 2013 in Yaoundé. Speed will be limited to 60 km/h. The Minister was speaking on the Feasibility studies for the first phase occasion of a visit to the urban will begin next week, Mbwentchou phase of the 10-km Nsimalen high- indicated. way project. He was accompanied “We gave them a timeline of two by the ministers of Lands (Jacque- months to complete these studies. line Kung a Bessiké), Public Works These must therefore be completed by (Patrice Amba Salla), and Public late July or early August. We expect A study completed in October 2012 revealed that Contracts (Abba Sadou), as well as to finalise the technical documents 14% of Cameroon’s road network is in good con- by Yaoundé’s Delegate (Gilbert Tsi- for approval and provide the appro- dition, while 32% is in fair condition and 54% in mi Evouna). priate service order to start work in poor condition, Patrice Amba Salla, the Minister This road runs from the Ahala MRS September,” he added. of Public Works, told L’Action. filling station to the Jean Paul II According to MINHDU, construc- Cameroon’s road network is about 50,000 km Boulevard junction, below the con- tion work on the road will start in long, of which 21,450 km are primary roads and ference centre. September as well. 28,550 km are rural ones. According to the Min- ister, the country needs 100 billion francs CFA for road maintenance. Synohydro Wins Mora-Dabanga Yet road maintenance is not optimal, mainly because of the pitfalls of privatisation, the limits Road Rehabilitation Contract of small and medium-sized businesses, and the inefficiency of management instruments, noted The Chinese company Synohydro building the Memve’le hydroelec- the Minister. has won the bid to rehabilitate the tric dam in the south of the coun- “In 2013, road maintenance will cost 56 billion 131.52 km road between Mora and try, won the bid that was launched francs CFA for 191 contracts. This will allow us to Dabanga in Cameroon’s Far North in November 2012. According to a maintain a total length of 11,072 km of road, of Region. June 21 statement by the Ministry which 1,432 are paved roads, 7,977 earth roads, According to the Cameroon Tribune of Procurement, work on the road and 1,662 rural roads,” he added. After 15 years of June 21, 2013, this old road is in will last 29 months. of privatisation, road maintenance in Cameroon an advanced state of degradation The road’s rehabilitation will be leaves much to be desired. due to its use by heavy trucks that accompanied by other measures In February 2012, President Paul Biya ordered bring goods from Nigeria and traf- that include the construction of the disbursement of 100 billion francs CFA to fic from Cameroon to Chad. 28 classrooms and 24 boreholes, finance emergency road maintenance work, but The road’s rehabilitation should be- as well as benches and mats to dry the project took off at an extremely slow pace. gin by the end of this year, indicated farm products. A year later, the completion rate is around 35% newspaper sources at the Ministry The project, which will cost to 40%. However, Minister Amba Salla remains of Public Works in Yaoundé. 46,384,860,579 francs CFA, is fi- optimistic that the work will be completed as Synohydro, which is currently nanced by the World Bank. planned by December 31, 2014.

-18- July-August 2013 / N° 6-7 BUSINESS IN CAMEROON Controversy Surrounds New Seat for Ministry of Public Works Situated in Etoundi, the building that reported that Foma had won the ten- will host the main offices of the Minis- der for the construction of the build- try of Public Works was expected to be ing, which was valued at 16.734 billion ready by the first quarter of this year, but francs CFA. construction has yet to begin, according to the June 3, 2013 edition of the French Yet on December 14, 2012, Sinohydro, daily Mutations. which was shortlisted along with five other companies, petitioned the Min- Awarded to Foma, a local construc- ister of Public Contracts, Abba Sadou. tion company based in the economic capital (Douala), the contract is still Citing members of the Commission, pending the adjudication of the Prime who are employees of the Public Con- tracts Regulatory Agency for the exam- ination of tenders, Mutations said that Abba Sadou Sinohydro quoted 16.037 billion francs indicated that CFA to construct the building with a In a reply to Sinohydro, which is cur- single air conditioning system. When rently building the Memve’ele hydroe- Sinohydro’s bid adding the refrigerant volume system lectric dam in South Cameroon, Abba (Vrv, a mini central air conditioning Sadou indicated that the company’s bid was the best but system), the Chinese quoted 16.077 bil- was the best but that Foma was chosen that Foma was lion francs CFA, an increase of 40 mil- because it is a national company. lion francs CFA. chosen because “Your company had the most qualified As for Foma, its construction price with technical offer and offered the best price it is a national single air conditioning was 16.734 bil- (…) The contract could not be awarded company. to you because of the principle of national preference in the Pro- curement Code,” he Minister. The latter must decide on argued in the corre- the final winner of the CFAF 16 billion spondence. contract following a complaint about the selection formula submitted by Yet Sinohydro claims the rival bidder, the Chinese company that “national prefer- Sinohydro. ence applies to a local business if the bids and The anti-corruption body (Conac) has proposals are equiv- jumped on this case to assess the cir- alent.” Further, it cumstances surrounding the award, and notes that the nation- most importantly, to ascribe guilt, indi- al preference clause cated Mutations. lion francs CFA, and 25 billion francs under the same law “applies to any nat- CFA with the Vrv system – respective ural or legal person carrying on business GENESIS differences of 635 million and 9.6 bilin Cameroon for two years.” Sinohydro On November 28, 2012, a state-run lion francs CFA with the two Chinese has been working at Memve’ele since bilingual daily (Cameroon Tribune) quotations. October 2010.

July-August 2013 / N° 6-7 -19- BUSINESS IN CAMEROON TRANSPORTS Turkish Airlines Cameroon to Merge Leads Cameroon’s Two Aviation Laws Market There are two laws on civil aviation Turkish Airlines, which began in Cameroon, and the government operating in Cameroon on Jan- wants to put an end to this source uary 5, 2013, has already carved of confusion. On July 1, 2013, a out its share of the national compendium of the 1963 and 1998 market. After just six months, laws was submitted to the National the airline is taking about 50% Assembly. of the business on the Par- Robert Nkili, the Minister of Trans- is route, reported the French port, said that if passed, the bill language daily Le Quotidien de would facilitate the management of l’économie on Monday July 9th Robert Nkili receiving a Turkish Airlines plane model airports and enhance the possibili- as a gift 2013. ty of penalising those in default in Cameroon’s airspace, and thereby According to the bill, the Civil Avi- The company is also forcing other airlines, in- make the country’s skies safer. ation Authority (which already ex- cluding the national carrier Camair-Co, to re- The bill also proposes the creation of ists) would be funded with service think their strategies and services. a Civil Aviation Fund, which would fees, state subsidies, gifts, and fleet be used to finance civil aviation de- registration fees (an aircraft can op- “Our main competitor, Turkish Airlines, beats us velopment projects and to pay Cam- erate only if it has been registered). not only with its aggressive offers but also with the eroon’s fees for its participation in After receiving the bill, a plenary quality of its services and its selection of on-board international civil aviation bodies. should be convened by the President entertainment,” Christian Perchat, a Camair-co All these measures aim to organise of the National Assembly to debate Sales Manager, said on July 5, 2013. the exercise of civil aviation activ- its content and suggest amend- ities, to promote competition and ments. If adopted, the bill would the participation of private initia- then be forwarded to the Senate for Douala Airport: GICAM tives, and to ensure the sensible and a second reading before being sent efficient use of aeronautic infra- to the President of the Republic for Deplores “Unfriendliness” of structure and the airspace. promulgation or rejection. Airport Police, Customs Officers In his address to the General Assembly on May CAMAIR-CO: SAFETY CONCERNS OVER CHINA’S MA60? 30, 2013, André Fotso, the President of Came- Chinese-made MA60 aircrafts were supposed to arrive in Cameroon in roon’s cartel of enterprises (GICAM), criticised September 2012. According to the Minister of Transport, Robert Nkili, the “poor treatment” passengers receive at the procedures for their arrival and subsequent integration into the national country’s busiest airport, Douala. carrier’s fleet are underway. Police and customs officers rudely and unduly Many countries are already using these planes. Since their release in 2000, demand money from passengers, but the fees are they have been delivered to fourteen countries in Asia, Africa, and South reduced when a receipt is requested. This gives America, and they are currently serving over a hundred airlines, according Cameroon a bad image, and it is unfavourable to to AVIC Xi’an Aircraft Industry (Group) Co., the aircraft’s manufacturer. the business sector, he noted. For now, there are no reports of any problem with the MA60 that is “The airport’s general manager needs to organise a being used by Cameroon’s defence forces. crash course on hospitality for these officers,” An- Yet serious concerns have emerged around the world regarding the sa- dré Fotso recommended. fety and airworthiness of the aircraft following several crashes that were GICAM also complained about the publicity tax due to system failure. and the high import duties on roof sheets, but For the record, the three MA60s that have been purchased by Cameroon it supported the new investment incentives law will serve domestic routes. that was decreed last April.

-20- July-August 2013 / N° 6-7 BUSINESS IN CAMEROON COMMERCE Petroleum Pipeline: Gov’t Launches Tender Cameroon’s Minis- The pipeline will be constructed in understanding with Cameroon to con- try of Water and En- two phases in a Build Operate Trans- struct the 248 km-long Lot 2. Govind ergy has launched a fer scheme. Lot 1 will leave Limbe via Development LLC, an American com- tender for the con- Douala and Edea to Yaoundé, the po- pany, has signed the same document to struction of a pipe- litical capital. Lot 2 will reach Bamenda carry out feasibility studies on the 377 line to transport from Limbe through Bafoussam. Fur- km-long Lot 2. The Belgian company petroleum products thermore, new depots will be built in Denys has also shown interest. from the city of Limbe to the rest of the Limbe, Douala, Bafoussam, Bamenda, country. and Yaoundé. The pipeline will create jobs, increase access to petroleum products, reduce In a statement dated June 20, 2013, Min- A few companies have shown interest. state subsidies, and maintain the price ister Basile Atangana Kouna said that Petroleum Products Pipeline SA (3PL), of petroleum products at the pumps, the tender aims to pre-select qualified a Nigerian and South African consor- the minister noted in the statement. companies to do the job. tium, has signed a memorandum of New Tax Office for Small US Ambassador: Businesses in Yaoundé Trade between Two years after the pilot office was Cameroon and opened in Douala, Cameroon’s economic capital, the government has brought US Hit CFAF 250 the project to the political capital. On July 5, 2013, Alamine Ousmane Mey, the Minister of Finance, inaugurated the Billion Last Year office that is specially designed for small Trade between Cameroon and the Unit- businesses i.e. with a turnover of less is just one part of the solution to the ed States amounted to 250 billion francs than CFAF 100 million in the city. problems that small businesses face. CFA in 2012, according to the US Ambas- “The inauguration of this office is part of “The real problem with the taxation of sador to Cameroon, Robert P. Jackson. the reform process on the management small businesses is beyond the scope of of taxpayers that began in 2004 and in- revenue collection – it is about inter-com- On July 2, 2013, the American diplomat volved grouping them into categories,” pany loans. In the chain, payment dead- reviewed bilateral cooperation between Minister Mey explained. lines are not always respected, and as a his country and Cameroon during a cer- According to the Doing Business 2012 result these businesses cannot meet the emony in Douala to celebrate the 237th report, companies need nearly 120 days tax deadline because they do not have any anniversary of American Independence, to prepare their tax returns. For small cash,” noted Mr Babissakana, a financial which is commemorated every July 4, businesses that are not assisted by con- expert, during a televised debate on the Mutations reported in its July 5 issue. sulting firms, this process represents a issue. huge cost. The new tax office is located in Yaoundé’s For Ambassador Jackson, relations “Improving the quality of services for tax- Etoa Meki neighbourhood in a building between the two countries have been payers will usher change and help them,” that was previously occupied by the Hy- strengthened since 2000 thanks to the the Minister noted. drocarbons Prices Stabilisation Fund Act on Growth and Opportunity in Af- For some financial experts however, this (CSPH). rica (AGOA) initiative.

July-August 2013 / N° 6-7 -21- BUSINESS IN CAMEROON PUBLIC MANAGEMENT

NGO: Cameroon Lost CFAF 6,000 Billion in 10 Years A study conducted by the African Net- interpretation of the tax code, and oth- work for Financial Justice (REJ-A), a er errors in tax calculations, although non-governmental organisation, sug- custom and tax revenues have been con- gests that Cameroon lost 6,000 billion stantly rising. francs CFA between 2000 and 2009 because of revenue collection problems. Incentives for investors, which range The study was presented on July 3, 2013 from exonerations on custom duties in Yaoundé, the country’s political cap- and other tax privileges to the various ital. investment codes that have been adopt- Although Cameroon is implementing a ed since the country’s independence in good governance programme, corrup- According to the report, the losses are 1960, are also amongst the problems tion and a lack of transparency continue due to incorrect tax brackets, the poor that were raised by the report. to undermine revenue collection. World Bank: Policy Implementation First Compensations in Cameroon is Slow for Yaoundé-Douala Superhighway Countries are rated on a scale of 1(low) to 6 (high) for each indicator. In this re- Victims port, 16 indicators were measured. On June 17, 2013, twelve families met A government official who attended a with Roger Moses Eyene Nlom, the presentation on the findings was aston- Governor of the Central region, to re- ished. “Cameroon recently adopted and ceive their compensations. Their land implemented equality and fairness meas- was expropriated to house the ceremony ures, in addition to numerous measures for the laying of the foundation stone of in other fields. For example, we created the Yaoundé-Douala highway, reported a ministry that handles procurement is- the French language daily Mutations. For the third consecutive year and to the sues. I’m embarrassed,” said Jean Tchof- government’s surprise, the World Bank’s fo, Secretary General of the Ministry of The compensation package is valued at annual review of policies and institu- Procurement and responsible for the 213 million francs CFA, which was di- tions has awarded Cameroon a score of monitoring of economic programs. vided based on each parcel’s size, value, 3.2. The management of the domestic and level of development. The cheques economy was rated 3.8, the highest score For CPIA evaluators, the question is not that were distributed ranged between in the review. so much if a decision has been taken 53,000 and 114.19 million francs CFA. to adopt measures, but rather if these The review is part of the World Bank’s are implemented and with what effect. To support these people, account-open- annual Country Policy and Institution- “Taking action is not enough to improve ing facilities were available at a local al Assessment (CPIA), which rates the the rating,” said Punam Chuhan-Pole, bank. According to Marcel Ndzengue performance of poor countries, the WB Acting Chief Economist for the Africa Bibi, the bank’s manager, beneficiaries explained in Yaoundé via a statement Region at the World Bank and the re- would receive their money on June 18, dated June 27, 2013. port’s lead author. 2013.

-22- July-August 2013 / N° 6-7 BUSINESS IN CAMEROON JUSTICE Bakassi Will be Fully Cameroonian as of August 14, 2013

The Bakassi peninsula will soon be to reiterate that Cameroon will fulfil completely run by Cameroon, just all the commitments it has undertak- like the country’s other regions. en in favour of our Nigerian brothers This marks the end of the spe- and sisters who have chosen to live cial transitional regime that has in Cameroon, whether they live in regulated Bakassi since August Bakassi or are among those who have 14, 2008, as per the Green Tree been living in large numbers within Agreement. Cameroon’s borders for many years. I would like to assure them that their We will soon witness the peaceful security and their rights will contin- resolution of an affair that had al- ue to be guaranteed. As in the past, CEMAC States Announce most ended in armed conflict be- they will be able to conduct their ac- tween Cameroon and Nigeria. The tivities without the slightest worry as End of Visa Requirements people living in Bakassi will now long, of course, as they abide by the have to freely decide between being laws and regulations of Cameroon,” Cameroonian or Nigerian before declared Paul Biya. for their Citizens August 14, 2013. The six member states of the Economic and Mon- AN EXAMPLE FOR AFRICA etary Community of Central Africa (CEMAC) In the special transitional regime, All this has been done in accordance have announced the end of visa requirements Cameroon committed to facilitat- with the Green Tree Agreement, for this region’s citizens as of January 1, 2014, ac- ing Nigerian nationals living in the which was signed in August 2006. cording to a CEMAC statement quoted by APS. area with regards to the exercise of According to this document, “After their rights, all the while granting Nigeria transfers authority to Came- CEMAC leaders met in June in an extraordinary Nigerian civil authorities full access roon, the latter guarantees that all Ni- summit in Libreville (Gabon) on the margins to their populations in the area. It gerians living on the Bakassi peninsu- of the New York Forum Africa, which included also agreed not to enforce its cus- la will be able to exercise the freedoms more than 1,500 international investors and eco- toms or immigration legislation and fundamental rights established by nomic and political policy-makers. against Nigerian nationals living the rights of Man and all other rele- in the area who travel directly from vant regulations of international law.” CEMAC has also decided to establish a common Nigeria to Bakassi so that they may policy framework for the protection of trade attend to their affairs. The peaceful resolution of this within the region. “This will include the harmoni- NIGERIAN OR CAMEROONIAN conflict is an example for Afri- sation of policies on drugs, the fight against coun- As of August 14, 2013, those people ca, where conflicts are too often terfeiting, and the facilitation of pharmaceutical who chose to be Nigerian and to re- settled with weapons. “To arrive companies’ access to the regional market,” report- main in Cameroon will be consid- where we are today, we engaged in ed the same source. ered foreigners, and they will have long and difficult negotiations dur- to obtain a residency permit. In ing which our people demonstrated CEMAC has six member states: Cameroon, Ga- 2008, the Cameroonian President not only moderation and patience, bon, Equatorial Guinea, the Central African Re- had reassured Nigerians in the area: but also constancy and determina- public, Congo, and Chad. They share the franc “I would like to take this opportunity tion,” indicated Paul Biya. CFA currency.

July-August 2013 / N° 6-7 -23- BUSINESS IN CAMEROON

National ICT Agency Fights Online Crimes Manu Zacharia, an expert in cyber security, flew in to train the participants thanks to ITU-IMPACT, an international multilateral partnership that offers high-level training programmes to help countries fight and prevent cyber threats. ANTIC became a member in 2011.

To reflect what happens in a real life sit- On July 1, 2013, more than 40 delegates National Agency for Information and uation, a computer laboratory was set from five government departments – Communication Technologies (AN- up at the conference centre to test the mainly persons in charge of ensuring TIC), said in his opening speech. lessons learned. “During the training, we the security of information and com- use examples, we try to demonstrate how munication networks – began a two- The seminar also showcased best prac- these criminals operate, and we provide week training course on cyber security tices and case studies, and shared the tools for our trainees to be able to fight in- in Yaoundé. successful experiences of other coun- security,” the trainer said. tries in combating cybercrime. The seminar’s objective was to build Ardent cyber criminals are always capacity with scalable and sustainable It is important to address cyber security searching for technological loop holes to solutions, as well as to strengthen trust issues because both businesses and the exploit them, and it is important to pro- by developing partnerships among var- government are increasingly providing actively work out ways of securing on- ious stakeholders at the national level. services online. The event was organised line transactions, Mr Zacharia claimed. by ANTIC, and participants were from “It is about capacity building, which is the Presidency of the Republic, National Each year, the world loses millions of vital in our fight against cybercrime be- Security, Presidential Security, the an- dollars to cybercrime, which is com- cause it enables participants to master the ti-graft commission (CONAC), and the monly known as “419”. Cameroon is available tools and solutions,” Dr Ebot Ministry of Post and Telecommunica- now ranked among the top 10 countries Ebot Enaw, the General Manager of the tions. where the crime is most prevalent. Copyright: Culture Minister Backs Socam On May 30, 2013, Ama Tutu Muna, the “Guilds are private organisations. Yet in Minister of Arts and Culture, told entre- order to function, they need a license. If preneurs that they should pay their dues you look at the 2000 law on copyright, to the Musical Art Guild (Socam), not to therein you will find the clause,” she its rival, the Cameroon Music Corpora- explained. She also did not hesitate to tion (CMC). warn entrepreneurs that those who paid the CMC will have to pay again. She was speaking in Douala to members of the Cameroonian cartel of en- On December 27, 2012, a decision by trepreneurs (GICAM) during its115th the Supreme Court decided that the general assembly. She was invited as Ministry had the right to revoke CMC’s a guest of GICAM’s President, André license. Fotso. cision from the same court that gave But Sam Mbendé, the head of CMC, ar- CMC the right to exist, against a minis- Basing her argument on the 2000 law on gues that this was just one of the many terial decision to dissolve it. copyright, the Minister said that only a decisions expected on the case between guild with a license issued by a compe- the Ministry and the CMC. In this judicial brawl between CMC and tent authority (in this case the Ministry the government-backed Socam, some of Arts and Culture) is authorised to Mr Mbendé believes that CMC is enti- companies have taken advantage of the collect copyright fees. tled to collect fees given an earlier de- situation, the Minister noted.

-24- July-August 2013 / N° 6-7 BUSINESS IN CAMEROON

Express Union Fights Back Road Fines: Over A verdict in February ordered CFAF 113 Million for Express Union to pay a fine of 594,602,594 francs CFA, or 20% of the State’s Treasury the revenues it earned in 2010. Fur- thermore, Express Union, which dominates Cameroon’s money in Two Months transfer market, was ordered to pay 25 million francs CFA in damages to Express Exchange.

The fine is a response to an agreement between Express Union and Emi Money Transfer that was con- Road users in Cameroon’s urban centres have Express Union, a money transfer sidered by the CNC as an attempt paid 113 million francs CFA in fines in two company, has sued the National to eliminate Express Exchange from months following a concerted effort to weed out Competition Commission (CNC) the market using anti-competitive bad drivers from the country’s cities, indicated over the latter’s decision to rule in methods. the French daily Le Quotidien de l’Economie of favour of the group’s competitor, June 7, 2013. Express Exchange. Magloire Déso- According to this agreement, mon- lice Piendjio, Express Union’s head ey sent from Emi Money Transfer However, the Minister of Transport, Robert Nki- lawyer, confirmed the information counters could be received at Ex- li, indicated that officials are still waiting for sta- to the Cameroon Tribune on June press Union counters for a lower tistics from two regions, the Centre and the Far 13, 2013. price. North. He spoke after an impromptu field trip to three neighbourhoods in Yaoundé (Nkol-Mes- eng, Mvog-Mbi Roundabout, and Mokolo Mar- Dja Reserve: Eight Poaching Camps ket), where he was accompanied by his colleague from the Ministry of Youth Affairs and Civic Destroyed, Weapons Seized Education, Bidoung Mkpatt, as well as by senior Alfred Voumia, a guard working in police officials and gendarmerie staff. Cameroon. Long before the patrol team’s crackdown, two ivory tusks Launched on April 1st, 2013, the on-going action weighing 10 kg each were seized at by law enforcement officers has pinched over the Cameroonian border. 19,000 vehicles and 2,000 commercial motor- bikes, the Minister revealed. In Yaoundé for ex- Financed by the WWF’s African ample, mixed brigades often lie in wait at blind The poaching of elephants in the Elephant Program, the project was corners to trap drivers. Congo Basin concerns Cameroon conducted as part of the conserva- and Congo. Both countries have tion initiative of the Dja-Odzala- He confirmed that the operation will continue. mounted a joint anti-poaching Minkebe tri-national border, which In his view, it is necessary to consolidate achieve- team of eco-guards to patrol the Dja is known by its French acronym ments, restore discipline, fight corruption, re- River, which separates the protected Tridom. It includes protected areas move clandestine drivers from the streets, and national parks of Nki in Cameroon in Cameroon, Congo, and Gabon. educate drivers on their civic responsibility. and Messok-Dja in Congo-Brazza- ville. “We will put more pressure on poach- Meanwhile, Minister Bidoung Mpkatt used the ers that continue to kill elephants in field visit to announce a national forum on the Launched on May 10, 2013, the large numbers in protected areas,” informal sector, which was held on July 9 and 10, operation lasted ten days. It came warned Pascal Dongmo, a curator 2013 in Yaoundé. The forum focused on how the at a time when elephant poaching at the Nki National Park. motor taxi sector can be better managed. is on the rise in Cameroon and neighbouring Congo. Forest guards The Messok-Dja Reserve on the Indeed, a 2004 prime ministerial decision that patrolled the Dja River for eight Congolese border houses rich for- organised this sector is not fully being imple- days, ransacked and destroyed eight ests and minerals. Cameramen have mented. Riders still do not use helmets and fail poaching camps, and stopped and captured images of magnificent to provide one for their passengers, yet they still searched seven canoes. “We seized herds of elephants, gorillas, and drive pass police officers without being stopped, a weapon and four chainsaws,” said chimpanzees there. in a clear violation of the decision.

July-August 2013 / N° 6-7 -25-

BUSINESS IN CAMEROON

Investor’s Guide

July-August 2013 / N° 6-7 -27- BUSINESS IN CAMEROON

Starting a company in 72 hours? It’s possible in Cameroon!

Business start-up procedures, a Ministry of Small and Medium En- virtual roadblock to entrepreneur- terprises, the governmental entity ship development in Cameroon that covers CFCE. over the last few years, have been significantly reduced thanks to the According, to the ministry’s latest Centre de formalités de création figures, to date, some 5,000 busi- des enterprises* (CFCE), which nesses have been created in CFCE enabled the creation of 5,000 busi- agencies, including three new nesses between 2010 and 2012. branches opened in 2011 in Garoua, Bafoussam and Bamenda, bringing Only a few years ago, the World the total number of CFCE offices in Bank’s Doing Business reports which Cameroon to five. According to the measure the state of business envi- Minister of Small and Medium En- ronments was far from gentle with terprises, Mr. Laurent Serge Etoun- Cameroon. Between 2007 and 2008, di Ngoa, the government’s goal is to for example, the report showed that establish similar bureaus in the ten business creation in Cameroon was chief-led areas of the country. subject to a 13-step process with 15 different procedures, a 37-day period before starting business and a BUSINESSES WILL SOON BE total of 426 days to obtain the nec- CREATED ON-LINE essary authorisations for building a But what is CFCE ? The Minister commercial venue. of SMEs explains that they are a processing point that comprises LATEST FIGURES all the administrative entities that Facing these accusations, the Cam- entrepreneurs were obliged to go eroonian government has under- through, sometimes taking weeks taken, since 2008, the implementa- to satisfy certain bureaucratic re- tion of a national and international quirements. business venture facilitation mech- tificate in 72 hours, enabling him to anism with the aim of starting Once at the CFCE, the entrepreneur start doing business. businesses in relatively less time. now finds everything in one loca- The government’s project led to tion – registrars, the National Fund the 2010 launching of the Centre for Social Welfare as well as Treas- THE AMAZING EXPERIENCE de formalités de création des entre- ury and Tax services. After choosing An employee of a Douala-based prises (CFCE). The two first pilot the legal form his or her business company, Godeffroy Elanga had the centres were established in Yaoundé will assume (Inc., a limited trading amazing experience first-hand. “A and Douala. By 2011, this initiative company, a cooperative and so on.), friend in London called me to ask if had produced over 3,000 new busi- the applicant fills out a form. Upon I could help him fill out some forms nesses claims Marie-Louise Secke providing the required documents, ASAP to start a business, because he Pouka, Secretary General of the he receives a business creation cer- had a deal with some business part-

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ners who were going to leave Came- quickly in Cameroon,” he explained. while saving time and money. Ac- roon the following week. He himself Indeed, CFCE provides entrepre- cording to CFCE heads, it will soon was surprised 72 hours later when I neurs with the following services: be unnecessary to visit any of the sent him a scanned copy of the busi- “business venture advising; estab- five CFCE branches nation-wide ness creation certificate. Since then, I lishing the trade register and in- as steps are currently underway have to admit that I’ve earned money vestment capital; setting-up the tax to enable customers to do the ap- simply by helping people start their card ; establishing patent exemp- plication on-line via the agency’s businesses because CFCE agencies tion; the establishment of a certifi- website. aren’t that known as yet. So, with cate of non-filing (APS abbreviated all the torture that people used to go in French) or a certificate of non-use Brice R. Mbodiam through before, they just can’t believe of paid staff (ANUPS abbreviated that it’s possible to start a business so in French)” They offer all of this *CFCE – Business Formalities Centre

July-August 2013 / N° 6-7 -29- BUSINESS IN CAMEROON LAND TENURE Land tenure: Emphyteotic leasing and concessions come to investors’ rescue

In Cameroon, it seems to be easier the banana production companies with which the Cameroonian gov- for a company to get land for some of Moungo, Justin Sugar Mills in ernment ceded State-owned land investments than for an individual the east; Socapalm and Fermes for the purposes of investment. to get a land title. Suisses in the coastal region and Environmental ONGs disapprove Chinese rice farmers in the town of of this practice, but it appears to be The latest example: the American Nanga Eboko in the middle of the a deliberate choice in favour of the company, Heracles Farms, which country can also attest to the speed country’s economic development. is currently putting in place an oil palm plantation on 73,000 hectares in the South-West region of Came- HOW CAN SOMEONE OBTAIN A LAND TITLE IN SIX MONTHS? roon, received all the required au- • Submit the complete and accurate application to the sub-prefecture thorisations from the Cameroon or to the district chief. Wait a maximum of three days to receive your government in relatively little time receipt. Keep your receipt as the authority will send your application in 2010. It was granted an emphy- file to our departmental land tenure service within 8 days. • The head of the departmental land tenure service will publish, in the 15 days afterwards, an excerpt of your application. In concert with the “Land concession sub-prefect or the district chief, he will set the date for the advisory commission to evaluate how efficiently the land is being used. Once recipients of State the boundaries have been established, you will be required to pay fees property pay rent to to the departmental receiver of State property against a receipt. • 30 days after this, the representative of the Ministry of State Property the Treasury calculated and Land Tenure (MINDAF in abbreviated French) sends your complete application to the provincial representative to the attention of the at a rate of one (1) head of the land tenure service who will register it in the provincial re- franc (CFA) per square gistry for the evaluation of registration requests, assign a number, assess its compliance and, where applicable, close the file with an advisory metre.” regarding the boundaries of the property. This advisory is published in the provincial land and property bulletin. Your application is then sent to the Commissioner of Lands and Surveys in the area where your land is located. teotic lease for a 99-year period. • Thirty days after the land border advisory’s publication, and in the The same was done for Sosucam, absence of any opposition or litigation, the Commissioner of Lands the Cameroonian subsidiary of the and Surveys will then proceed with the registration of your land in the Vilgrain Group to which the State land tenure registry and will give you a copy (duplicatum) of the land of Cameroon granted 20,000 hec- title once you have paid the land tenure fees to the receiver as well as tares for sugar cane plantations in the attendant stamps. Mbandjock et Nkoteng. Hevecam and Sud Hévéa, the CDC, Source : the MINDAF user guide

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PROVISIONAL APPROVAL for an emphyteotic lease which has negotiate its lease on 73,000 hec- FIRST the characteristic of covering areas tares in South-West Cameroon at Indeed, Cameroonian land ten- that are more extensive than those a cost of “between 0.5 and 1 dollar ure will have two land ownership designated through concession. per hectare per annum.” access provisions for investors Generally sought by agro-industri- – concessions and emphyteotic al companies, emphyteotic leases MAGZI: LEASING LAND TO leasing. Firstly, the concession is are for a duration that may vary INVESTORS legally defined as “the procedure from 18 to 99 years in accordance In addition to the incentives in- through which the State authorises with Cameroonian land tenure cluded in land tenure policy when any person who wishes and has a policy. In reading the Ministry of granting land to investors, the development project to be conduct- State Property’s guide, one can Cameroon government has created ed over a five-year period on any read that their characteristics are the Industrial Zone Developement 2nd class (unoccupied before 1974) the following: the rent is payable and Management Authority (MAG- public land of State property.” Ac- in advance and has a reducing bal- ZI when abbreviated in French), cording to Cameroonian land ten- ance ; the mandatory payment of whose mission is to prepare land ure policy, it is first provisional (5 years) before being renewed and then made final in keeping with the scale and the project presented and implemented by the concession recipient. Any investor wishing to obtain a land concession in Cameroon must present an application that contains “three copies of the application on special forms to which must be at- tached a photocopy of the national ID card or a residence permit, the status of the company where applicable and its terms of reference, 4 copies of the map of the land; the development programme with steps clearly indicated; and a descriptive estimate of the work to be done. This application is then submitted to the competent district land service office, upon which the applicant receives a receipt,” explained the guide assigned by the Ministry of State Property and Land Tenure. The official noted that the concession could not be made to a foreign entity or person in a border area.

EMPHYTEOTIC LEASES Concessions on fewer than 50 hectares are granted by the Minister of State Property while those involv- ing plots of land greater than 50 all property taxes and other taxes ; that could be rented by investors. hectares are authorised by the Pres- the possibility for Ministry agents to To date, this State entity oversees six ident. According to Cameroonian inspect sites; the prohibition of ced- (6) industrial zones in the central, State policy on land ownership, ing the right to the lease or to sublet coastal, northern, West Adamaoua which dates back to 1974, land con- without authorisation; the possibil- and south-west regions. This rep- cession recipients of State property ity for the Ministry to reclaim the resents thousands of hectares of pay rent to the Treasury calculated property upon the conclusion of the land to be developed upon request at a rate of one (1) franc (CFA) per lease with the pre-emptive right to by economic operators. square metre. Aside from a land investments.” According to Green- concession, the investor may opt peace, Heracles Farm was able to Brice R. Mbodiam

July-August 2013 / N° 6-7 -31- BUSINESS IN CAMEROON

THE BUSINESS CLIMATE ANSELME KEMVA’S PERSPECTIVE

CEO of Poulet du Bonheur and former Vice-President of the Cameroon Entrepreneurs’ Movement (MECAM abbreviated in French). “It’s the application of measures that is most lacking”

“Though there has been some pro- always been MECAM’s area of most followed. In addition, the problems gress, particularly since Cameroon’s concern, there has been a cohort of that economic entities have been low grade by rating institutions, the measures such as the opening of ap- facing remain virtually unchanged: business climate still isn’t satisfacto- proved SME management centres the sluggish bureaucracy, corruption, ry. All this has occurred because of a through the passing of the 13th April constant power outages, difficulty ac- glaring lack of solid measures. Cam- Act that organised SMEs and put cessing financing, the flagrant lack of eroon is quite advanced in terms of in place a business start-up centre communications infrastructure and the putting in place of measures. The where businesses can be created in 72 so on.” problem lies with their application. hours. This could get things moving, With regards to SMEs which have but the application of the law hasn’t Comments gathered by HBE

-32- July-August 2013 / N° 6-7 BUSINESS IN CAMEROON MINING The Mining Code: a gold mine for investors

the mining company’s shares to the The text regulating mining activi- RICH, DIVERSE POTENTIAL ties in Cameroon proposes a litany State. This provision is contained in of incentives and facilities to busi- Article 11 of the 2010 Act. In para- FOR MINING nesses and is considered to be one graph 1 of Article 49, the amount of Based on data from Cameroon’s of the most attractive in Africa. land for which the mining permit Ministry of Mining, Industry is granted depends on the deposits and Technological Develop- The legal aspect of mining in Cam- that are to be mined, as defined in ment, Cameroon’s subsoil is very eroon essentially lies in Act No. 001 the feasibility study. “The mining rich. The country has large mi- th on mining passed on 16 April 2001 licensee shall begin the development neral reserves including conside- th (amended Act 2010/011 of 29 July and use of the deposit within a max- rable bauxite deposits in Minim- 2010) and its application decree – imum of two years as of the date of Martap which are estimated to 2002-648 PM on 26th March 2002. be as high as a billion tonnes, So, Cameroon has a legal arsenal with 43% in alumina content. governing mining activity with On the whole, Ngaoundal has 120 million specific modalities on exploration, Cameroon’s Mining tonnes of the same quality of mining and even the sale of mined bauxite. The third reservoir is products, whether hand-made or Code is a veritable gold found in Fongo-Tongo and pos- industrial. In the terms outlined mine for investors. sesses 50 milliom tonnes, with in paragraph 2 of Article 8 of the 47% in alumina content. Came- th new 2010/011 Act of 29 July 2010, Several experts have roon also holds the world’s se- modifying and completing certain cond largest rutile reserve which th provisions in the 16 April 2001 described it as being has been valued at 3 million 001 Act on the mining code – “An- one of “most attractive” tonnes. Cameroonian subsoil yone wishing to engage in mining contains close to a billion tonnes must first obtain a reconnaissance codes in Africa. of iron in the Mbalam and Kribi permit or a mining title.” basins. Other areas also hold considerable mineral deposits: RECONNAISSANCE, MINING the permit’s issuance.” The text also cobalt and nickel in Lomié (250 AND RESEARCH PERMITS expresses that any small mining ac- million tonnes); limestone in Industrial mining requires recon- tivity must comprise at least 40% of Figuil (600,000 tonnes); marble naissance, research and mining national interest and the small min- in Bidzar and North Biou; gold permits. The reconnaissance per- ing permit is granted with the same in the East, in Adamaoua, the mit is issued and/or renewed by conditions and stipulations as those North and the South. Betaré the Minister of Mining following of the standard mining permit. Oya’s gold reserves are estimated the modalities established through The research permit is issued by to be 3 tonnes. In addition, there regulatory measures after the pres- order of the Minister of Min- are 250,000 tonnes of cassite- ident’s approval. ing following the approval of the rite, large reserves of pozzolan, President, with the intent to locate silica sand, nepheline syenite, In Cameroon, the issuance of a and evaluate mineral deposits and rose granite, molybdenum, man- mining permit takes place only determine commercial viability. ganese… Cameroon’s subsoil upon the free transfer of 10% of According to the said law (Article mineral list is pretty long!

July-August 2013 / N° 6-7 -33- BUSINESS IN CAMEROON

38), the research permit shall be research licensees, there are four diverse (Article 96 of the 2001 Act). issued for a maximum initial peri- specific advantages (Article 94 of There is a customs tax and duties od of 3 years and may be renewed the 2001 Act): a patent tax exemp- exemption on materials, inputs and only twice for a two-year period for tion for the first two years of re- capital goods necessary for pro- each renewal. It also states that the search, an accelerated capital cost duction; a customs tax and duties amount of land for which it may be allowance at a rate of 1.25% of the exemption on replacement equip- granted shall not exceed 500 square normal rate for specific capital as- ment in case of a technical incident kilometres. “The research licensee sets and the extension of deferred and also on equipment intended shall begin research activities within losses for a period of four to five to be used in exportation; total ex- the perimeter of the permit within a years. Note also that the corporate emption up to the first day of com- maximum period of 9 months as of tax, trade and industrial tax, the mercial production; an exemption the date of its signing.” proportional tax on income float- on customs taxes and duties on the ing capital (PTIFC), the special tax imported materials to be used in A RANGE OF EXEMPTIONS on remuneration paid abroad and construction, and so on. The mining legislation provides a the value added tax are all exempt. On the whole, Cameroon’s Mining litany of incentives to permit hold- In the mining phase, the range of Code is a veritable gold mine for ers and entities in the industry. For exemptions is also substantial and investors. This is why during the In-

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ternational Conference on Mining taxable value of the raw products er mineral substances (iron, nickel, held in Cameroon in May 2013 in directly resulting from mining and bauxite and so on) at 2.5%, and ge- Yaoundé, several experts described those ready to be shipped, based othermal deposits, spring water and it as being one of “most attractive” on information gathered and also mineral or thermo-mineral water at codes in Africa when one takes into based on contracts and support- 2%. However, the current Cameroo- account the diverse range of facili- ing documents that each taxpayer nian Minister of Mining, Emmanuel ties it proposes. is required to provide to the com- Bonde, in consultation with mining According to the order implement- petent authority for determination companies, decided to modify the ing the Mining Code, there are two purposes. It shall be paid monthly tax that the latter are required to pay taxes: the tax on the extraction of by entities authorised or licensed to to the State. To those who engage in substances from a quarry and the ad engage in mining. semi-industrial mining, he proposed valorem tax which is proportionate According to Article 144 of this de- a new distribution of sales. “Out of to the value of the products extract- cree, the tax is applied as follows: what they mine, they will retain 60%. ed. With regards to the ad valorem precious stones (diamonds, emer- They will pay 30% to the State and tax, the order implementing the alds, rubies and sapphires) at 8%, the remaining 10% will be redistrib- Mining Code stipulates that this precious metals (gold, platinum and uted at the local level to municipali- tax shall be calculated based on the so on) at 3%, base metals and oth- ties, residents and those involved in social welfare,” he explained in an interview in the 29th October 2012 issue of The Cameroon Tribune. Hervé B. Endong

22 REGISTERED MINING COMPANIES, BUT ONLY 10 ARE ACTIVE It was during the International Conference on Mining held in May 2013 in Yoaundé Cameroon that Ministry of Mining sources revealed that out of a total of 22 registered, only around ten mining companies are active in Cameroon, each producing 12 to 13 tonnes of minerals per month, generating 300 million FCFA (600,000 USD). C&K Mining is one of them. It has had its exploration and mining permit since 2012, working in Mobilong and Limokoali dia- mond reserves in the Boumba and Ngoko department in East Cameroon. Cameroon also granted prospecting, exploration and mining permits to five mining companies in 2007. In mining circles, they have been christened as the “juniors”. Geovic Mining Corporation (Ame- rican/Canadian), African Aura Resources Limited (British), Hydromine Inc (American), Sundance Resources Ltd. (Australian) and Mega Uranium Limited (Canadian). One should also note the Cameroon Mineral Exploration which ceded its Nkout mining deposits a few months ago to its British counterpart, Afferro Mining, or Victoria Oil and Gas (VOG) which extracts and sells gas for companies in Douala or even Sundance Res- sources which ended up obtaining a mining convention for Mbalam iron. Others are currently in talks with the government, such as Cameroun Alumina with its bauxite mining plans for Minim-Martap (East Cameroon).

July-August 2013 / N° 6-7 -35- BUSINESS IN CAMEROON

Small-scale mining: An area reserved for nationals

Under the law, small-scale mining The issue of small-scale mining to the payment of “all duties or oth- in Cameroon is reserved solely for authorisation is addressed in the er taxes applicable to the perimeter”. Cameroonian nationals. Mining Code in the section regu- Unlike industrial mining, the size lating specific provisions applica- of each plot of land receiving small- This restriction is framed in texts ble to mining activities. “When the scale mining authorisation may not regulating mining in Cameroon, holder of an individual prospector’s exceed 100 square metres. Accord- particularly Act No. 001 of 16th card has demarcated a perimeter ing to Article 27, small-scale mining April 2001 governing the Mining for small-scale mining, he must authorisation establishes the right Code. “Small-scale mining is re- proceed to the customary or ad- to mine to a depth of 30 metres. It served for persons of Cameroonian ministrative observance by way of is initially valid for two years. The nationality subject to obtaining an regulation,” states paragraph 2 of Cameroon Mining Code allows the individual prospector’s card and/or Article 25. small-scale mining permit holder to small-scale mining authorisation,” request a research or mining permit stipulates in fine in Article 9 of the CAPAM’S ROLE at any time. said legislation. The individual Small-scale mining authorisation is The 2001 Mining Code is complet- prospector’s card is issued “to an- granted by the competent territori- ed with the No. 064/PM order of yone of Cameroonian nationality”, al authority in 15 days following the 25/7/2003 on the creation, organi- but is limited to prospecting within submission of the application. The sation and functioning of the Sup- the department where he resides. granting of authorisation is subject port and Promotional Framework

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for Small-Scale Mining (CAPAM have been identified in Cameroon aims to secure at least 100 kg of this when abbreviated in French). This where, in most cases, small-scale monthly production,” adds Paul is a programme of the Cameroon gold is the main business activity. Ntep Gweth. According to MIN- government which is financed with Small-scale gold’s production po- IMIDT, this operation has already PPTE funds. CAPAM plays a role tential is estimated to be 500 kg per borne fruit beyond expectation. In in the coordination, organisation, facilitation, support, promotion and development of small-scale “Small-scale mining is reserved for persons of mining. It has some 15 missions. Cameroonian nationality subject to obtaining Within the framework of developing the industry, the Mining Code an individual prospector’s card and/or small- provides for small-scale mining authorisations that are exclusive to the scale mining authorisation.” same degree as other mining titles. This is intended to stimulate the annum based on the Cameroon an interview in The Cameroon Trib- entrepreneurial spirit of small-scale Ministry of Mining’s Mining and une of 11th July 2013, Emmanuel business people and increase their Geology Management Division Bonde noted that in the first half “Gold income. produced (MINIMIDT when abbreviated in of 2013, CAPAM channelled 32,843 through French). “Gold produced through grams of gold at a starting value of 1,892 SMALL-SCALE GOLD small-scale small-scale mining does not follow 549,198,451 FCFA which represents mining does MINING AUTHORISATIONS not follow the same formal routes. For every the amount paid to small-scale gold For the time being, gold is the the same 100 kg produced, 90 go to smug- miners. Diamonds also figure in formal mineral most exploited by small- routes. glers,” stated Paul Ntep Gweth, for- this sum, although its mining is still scale mining. According to the For every mer coordinator of CAPAM. insignificant. Cameroonian government, 1,892 100 kg Hence the creation of the Operation According to CAPAM estimates, produced, small-scale gold mining authorisa- 90 go to Gold campaign launched in 2011 in through small-scale mining, Cam- tions have been issued, particular- smugglers,” collaboration with the armed forc- eroon will produce 16,652.3 kg of

ly in the region of East Cameroon es to channel this production and gold for the 2010-2015 period. CA- “where the bulk of gold prospecting reinforce Cameroon’s gold reserves PAM suggests that small-scale min- occurs”. Meanwhile, there are 48 at Banque des Etats de l’Afrique ing in 2012 alone was 224.8 kg. recognised venues where gold is centrale*. “With national produc- Hervé B. Endong bought and sold. According to tion estimates at 170 kg per month, CAPAM, at least 140 locations CAPAM’s Operation Gold project * Bank of Central African States

July-August 2013 / N° 6-7 -37- BUSINESS IN CAMEROON OIL Oil mining: the great deal of the production sharing contract

Under the production sharing and the joint communiqué signed by concession arrangement, each ac- Société nationale des hydrocarbu- tor can benefit from the commer- res (SNH) CEO, Adolphe Moudiki cially viable oil deposits found, and CEO of Glencore Exploration according to the Cameroon Oil Cameroon Ltd, Alain Johnson. In Code. 2013, the company has been drill- ing three other wells on the Bolo- Since 1999, the Cameroon oil sec- ngo Block. tor has been governed by the Oil In some cases, there was no explor- Code Act. The text assigns a specific atory phase as mining was done in definition to the term “mining”. It areas where deposits had already is defined as “an operation intended been discovered and delimited. to extract hydrocarbon (oil and nat- But, such circumstances were still ural gas) for commercial purposes, subject to a contractual agreement. particularly production and devel- In reality, the Oil Code aims to im- opment operations.” This was the prove the visibility of oil mining fortunate outcome to the research commenced in Cameroon since and exploration phases of the pro- 1977. The text reaffirms the sov- ject. Such was the case when hydro- ereignty of the State in resources carbon deposits were discovered in found on its territory. It is and re- June 2012 by Glencore Exploration mains the exclusive owner of any Cameroon Ltd, after offshore drill- natural accumulations or depos- cial companies in the form of oil ing via the Oak-1X oil well on the its of hydrocarbons in its subsoil, mining contracts. No one, includ- Bolongo Block situated in the Rio whether discovered or not. The ing landowners, may undertake oil Del Rey Basin which provides 90% State retains the right to undertake mining activities without the prior of Cameroon’s national produc- oil mining itself, either directly or authorisation of the State. tion. “This well reached hydrocar- through intermediary establish- Any oil company that wishes to bon deposits at a depth of 13.7 me- ments or public organisations for- conduct business in Cameroon, tres in the main reservoir, of which mally mandated for that purpose. whether Cameroonian or foreign, 6.2 metres were oil. The sample re- But, facing the scale of investment must demonstrate its technical and vealed great oil flow, as well as quali- required, the government opted to financial capacity to fulfil its respon- ty oil and a quality reservoir,” stated create partnerships with commer- sibilities while ensuring the protec-

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tion of the environment. Foreign Through the SNH, the Cameroon contracts, concession mining companies must have a stable entity government may participate direct- occurs in the event of the dis- based in Cameroon that is registered ly or indirectly in some legal form covery of a commercially viable with the Trade and Personal Proper- in the entirety or a share of oil min- oil deposit. The contract holder ty Credit Register for the duration of ing ventures with full observance of who has financed the research, the contract’s validity. the conditions and modalities stip- possesses the extracted product In contractual arrangements, the ulated in the contract. for the duration of the contract’s SNH is the authorised represent- validity. The State may garner ative of the State. It is subject to MINING AND PROFITS income within the framework of the same obligations and respon- In general, mining is only a part the concession: royalties on oil sibilities as any other oil company. of the oil contract. In concession production, taxes on oil company

July-August 2013 / N° 6-7 -39- BUSINESS IN CAMEROON

profits, a surface tax (proportion- OIL PRODUCTION HEAVYWEIGHTS ate to the area covered by the exploration permit) and dividends paid by the company. With regards to the discovery of hydrocarbons in the Oak-1X oil well, the Extractive Industries Transparency Initiative (EITI) committee in Cameroon has as- sured that, in the event of any minable discovery, Glencore would receive an exclusivity contract to mine oil for 20 years and mine natural gas for 25 years. In addition, the Swiss trader possesses the exclusive authorisations to conduct research in the Bolongo and Matanda field. In this production-sharing contract, the State contracts only the services of a company to engage in research and mining on its behalf. Should any commercially viable oil deposit be discovered, the production would then be shared between the State and the contract holder who would therefore receive a portion as compensation for expenses incurred and as a payment in kind. Once deducted from this amount, the balance of total production, commonly re- ferred to as “profit oil” or “remuneration for production” is shared between the State and the contract holder in accordance with modal- The companies mining Cameroonian oil operate mainly in the Rio Del Rey and ities determined in advance. Douala/Kribi-Campo Basins which, combined, hold most of the main deposits. Oil The production sharing contract companies work mainly in associations, each with an operator to which the State has is the model most frequently cho- conferred the responsibility of ensuring the proper execution of mining in accordance sen. It even allows for the possibil- with regulations currently in effect. There are at least four associations: Total (opera- ity that the company may receive tor), Pecten and SNH; Pecten (operator) and SNH; Perenco (operator), ExxonMobil compensation in cash and not in and SNH, Perenco (operator) and SNH. In 2010, the French company, Total, ceded crude oil. Hydrocarbon compa- its participation in its Total E&P Cameroon upstream subsidiary to Perenco, ano- nies must declare their production ther French company. Total E&P Cameroun is a Cameroonian company in which to the State which would expect to Total holds 75.8% of interest alongside SNH (20%) and the Rothshild Group’s Paris receive its share of the identifiable Orléans (4.2%). Producing 40,000 barrels per day, Total E&P Cameroun, became net assets. In 2010, oil companies Perenco Rio Del Rey, holding around 70% of Cameroon’s oil product. Perenco is now paid around 725 billion FCFA ac- the nation’s leading oil producer with a capacity of 47,000 barrels per day and reserves cording to the conciliation report estimated at 173 million barrels. Its mining activities extend to at least 6,000 km². of the flows and volumes relative Facing the decline in national production, which has never attained the record of to the exploration and mining of 186,000 barrels per day recorded in 1985, the new oil code was adopted in 1999 and hydrocarbons and solid mines. recently revised, inciting a rebound in mining investments. This information was contained But the return on these investments has been slow in coming. On 20th May 2013, the in a report released in 2013 by the American company, Kosmos Energy, announced that it has not found commercially EITI committee. viable oil in the first exploration wells drilled on the Ndian River Block in the Rio del Rey Basin. Kosmos Energy, which has a 100% participation in the Ndian River Block, Assongmo Necdem also indicated that the Sipo-1 oil well will be closed and abandoned.

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Cameroon’s oil-rich subsoil

million barrels of crude oil com- ly Niger and Chad. Société nationale des hydrocar- st bures’ (SNH)* data distinguish pared to 2011. On 21 July 2011, the SNH and the between productive basins located Yang Chan Logone Development along Cameroon’s coastal areas SIMILARITIES WITH NIGER Company Ltd jointly announced and unproductive basins located AND CHAD the success of the Zina-IX explo- in-land. . The basins that have not yet be- ration well on the Zina-Makary come productive are those of Log- Block, in the Logone Birni sedi- The productive and unproductive one Birni, Mamfé and Garoua. Yet, mentary basin. This exploration is are both sedimentary basins be- the Logone Birni Basin in the ex- the first in the northern part of the longing to three active oil systems treme north of Cameroon shows country. The future looks bright. in Africa: the Niger Delta, West-Af- some similarity with structures that A.N. rican Salt Basins and East and Cen- have had significant discoveries in tral African Rifts. Since 2006, at the neighbouring countries, particular- * National Hydrocarbon Company same time that production intensi- fied, exploration efforts increased in productive basins where 90% of national production is concen- trated, namely in Rio del Rey and Douala/Kribi-Campo.

THE WEST BAKASSI BLOCK In 2012, Cameroon launched oil exploration in Bakassi – a territory won before the International Court of Justice after border conflicts with Nigeria. On 14th June, the SNH signed a contract to share production in West Bakassi Block with the Dana Petroleum Cameroon Company, a 100% subsidiary of Dana Petroleum, a 3 billion-dollar Scottish company operating in the United Kingdom, Norway, Holland, Egypt, Morocco, Mauritania and Guinea. The initial project, worth 37 billion francs (CFA) will be spread over eight years. Like deposit mining, the search for oil is conducted within the framework of investors’ associations with one of them designated as an operator, through joint funding. In 2013, optimism is the order of the day for SNH CEO, Adolphe Moud- iki. Last April, he was pleased that the Lobgaga project had turned Cameroon into a natural gas producing nation. Furthermore, the Dissoni oil field has commenced production. Two of the seven wells drilled in 2012 have produced oil. While awaiting their valuation, Cameroon improved its own annual production by 3.43% or 22.35

July-August 2013 / N° 6-7 -41- BUSINESS IN CAMEROON ELECTRICITY Electricity: investment opportunities after the announced end of the Aes Sonel

A law adopted in December 2011 eralising production, electricity Energy and Water, Basile Atangana reaffirms the opening-up of the transportation, distribution, impor- Kouna, announced “the imminent market in terms of production, tation and exportation of electrical creation” of this public company. transportation and electrical energy as well as the materials used This statement was a thinly veiled energy distribution. The govern- in building electrical networks, the proclamation of the end of Aes ment is announcing the imminent promotion of renewable energies Sonel’s electricity transportation creation of an electricity trans- (wind, photovoltaic, ocean currents, monopoly in Cameroon, of which portation company, and have biomass and so on) and the sec- 6% of the energy was usually lost designated export competencies tor’s regulation through the Cam- due to the dilapidated state of the of this energy to Hydro Mékin, eroonian regulatory agency for the equipment, according to a recent another public company created electrical sector (Arsel), the 2011 study conducted by the European in 2010. Act “institutes a State-owned com- Union delegation to Cameroon. In pany that will manage the electricity addition, while the 2011 Act was Did the Cameroonian authorities’ being drafted in the halls of gov- reaffirmation of the opening-up of ernment, the Cameroonian Head of the production, transportation and For electrical export, State announced the form the new distribution of electricity in Came- Hydro Mékin’s first competition in the electricity sec- roon in the form of a law passed by tor would assume by creating the the National Assembly in December customer might very Hydro Mékin Company, The pres- 2011 lead the American company idential decree outlining its opera- to exit the Cameroonian market? well be Nigeria, a tions stipulates that it will “ensure With no means of answering this market of 180 million the production, transportation, dis- question with any certainty, one tribution, sale, export and import of can at least note that in the last few consumers whose electrical energy.” months, more and more information has been circulating about the authorities have PROMOTING RENEWABLE British investment fund, Actis, buy- already approached ENERGIES ing a 52% of the American compa- For electrical export, Hydro ny’s (AES) share in the capital of their Cameroonian Mékin’s first customer might very Aes Sonel, its Cameroonian subsid- well be Nigeria, a market of 180 iary. Until now, the latter was sole counterparts. million consumers whose author- concessionary of the production, ities have already approached their transportation and distribution of transportation network. Its mission, Cameroonian counterparts to be electricity in Cameroon since 2001. organisation and operations will be able to enjoy the benefits of the 2nd determined by Presidential decree.” potential energy source in sub-Sa- ITS CREATION IS IMMINENT During a media event a few days haran Africa as Cameroon claims In addition to organising and lib- ago, the Cameroonian Minister of to be. According to official sources

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in the Prime Minister’s office, Chad and the Central African Republic may also be taking a closer look at Cameroon in case the latter chooses to market the energy it produces. According to Célestin Ndonga, then CEO of Electricity Developement Corporation (EDC), the public company building the Lom Pangar Dam, the country’s potential energy for export earnings could rival those of oil. With Hydro Mékin and the first competing local and foreign investors to whom the 2011 Electricity Sector Act opening the export market, Cameroon could soon transform its energy resources into substantial revenue. Basically, with the electricity sector legislation, numerous opportunities are available to operators wishing to invest in electricity and renewable energies (with tax and customs incentives at the core of the new framework) whose promotion is amplified in the 14th Decem- ber 2011 Act. “Renewable energies contribute to securing the nation’s energy needs and protecting the environment (…) Any operator of an electrical public service is mandated to bridge any producer of electricity derived from renewable energies upon request. The bridging fees shall “When concessions for the produc- its activities as the numerous power be paid by the applicant,” reads Ar- tion and transportation of electricity outages that Cameroonian com- ticle 66. for industrial purposes apply, within panies experience due to electrical the conceded perimeter, occupying deficits is considered to be a main SPECIAL PROVISIONS FOR lands belonging to the State, conces- hindrance to the said companies ac- INDUSTRIAL COMPANIES sions have the value of authorisation cording to a study by Cameroonian As major consumers of electricity, of occupation for their duration and representatives of the BIT. industrial companies can produce eventual renewal. The concession re- This possibility to be able to harness and transport their own electricity cipient has a right of ownership on energy production also explains and sell the surplus to consumers, the works, construction and installa- Alucam’s involvement in the dam in agreement with the regulatory tions that it has effected, except stip- construction project at Natchigal. body. “Any company engaged in in- ulations contrary to the Concession One must not forget the alumini- dustrial production can develop and Act, whether in conditions or limits, um giant operating in Cameroon, use electricity production and trans- as defined by the clauses of the con- the subsidiary of the Canadian portation between production and cession contract.” company, Rio Tinto Alcan, which industrial sites and/or between pro- It is certainly with these incentives consumes, on its own, almost 40% duction sites and network intercon- in mind that the Justin Sugar Mills of the total energy produced by Aes nection posts to the transportation Company, which is currently build- Sonel and plans to triple its pro- network in order to meet its indus- ing a sugar production factory in duction to reach 300,000 tonnes trial needs,” stipulates Article 47 of the East Cameroon region, plans of aluminium per annum. That’s a the Act. to also produce its own electrical goal that will certainly need more The facilities for granting such sites energy. This is planned not only to electricity. for housing these activities are spec- reduce energy consumption costs, ified in Article 51 of the same law: but also to have greater control over Brice R. Mbodiam

July-August 2013 / N° 6-7 -43- BUSINESS IN CAMEROON TELECOM Cellular phones: the lines are always open

Thirteen years after liberalising ON THE LOOKOUT meeting, Minister bi Essam also re- the sector, only two operators Author of an exposé on “the open- vealed that, “being specifically about share the 20 million-consumer ing-up of the cellular phone in- the critical mass study of the cellu- market and they are suspected of dustry in Cameroon” presented on lar phone market, it provides for the engaging in price agreement. In 26th May 2011 during a cabinet granting of at least two new licences 2012, the government issued a 3rd licence and plans to do more. By acclaiming their subscriber share which is estimated at only 10 million customers or half of the Cameroonian population, Orange Cameroun and Mtn Cameroun, who have been sharing the cellular phone market since the sector was launched in 2000, indirectly revealed that the opportunities in the cellular phone sector are still im- mense. The 10 cellular phone operators, including some of the world’s top providers that responded to the government’s call for tenders in 2011 confirms this. This effort led to the issuance of a third licence. This third licence was issued to Vi- etnamese company, Viettel (which plans to invest 200 billion francs (CFA), directly creating 6,300 jobs and reducing communication costs by 15 to 25%). Viettel’s victory did not fail to set tongues wagging – proof that Cameroon is still a prime investment destination for cellular industry players. And the government of Cameroon plans to seize this opportunity which “ since the liberalisation started in 2000, represents an engine for growth as well as a source of jobs and tax revenue,” declared the Minister of Postal Servic- es and Telecommunications, Jean Pierre Biyiti bi Essam.

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(one of which has already been given called “entrance fees” and “renew- from: annual contributions by the to Viettel) and the move from GSM al fees”, of which the amounts and electronic communications provid- to 3rd generation cellular phone capa- payment modalities are established ers, amounting to 3% of their total bilities including internet access, in by presidential decree following a sales before taxes, State grants, gifts light of the user projections and the joint proposal of the Minister of Tel- and any bequest.” availability of frequencies.” ecommunications and the Minister There is also a Telecommunications Potential operators should there- of Finance.” Regulations Agency (TRA) which fore be on the lookout. But before acts as the sector’s police thanks to the Cameroonian government FEES TO BE PAID annual fees paid by “telecommuni- makes a new call for tenders for The same law “institutes a Special cations network operators and ser- a fourth licensee, future investors Telecommunications Fund” to en- vice providers” amounting to “1.5% should know that the sector is reg- sure the provision of telecommu- of their total sales before tax.” The ulated by an electronic communi- nications services to the public in TRA also oversees the strict adher- cations act which was passed on rural areas which are generally ne- ence to Cameroon telecommunica- 21st December 2010. It stipulates, glected by providers due to their in the second paragraph of Article uncertain profitability. According 2, that “the issuance and renewal of to Article 34 of the Electronic Tele- Viettel plans to a concession agreement or licence communications Act in Cameroon, invest 200 billion are subject to the payment of fi- “the Special Telecommunications nancial compensation respectively Fund’s resources will be derived francs (CFA), directly creating 6,300 jobs and reducing communication costs by 15 to 25%.

tions regulations which require that operators “open-up capital and integration to nationals, whether public or private, in the managing bodies of companies with predominantly foreign capital investment.” In terms of infrastructure, current regulations authorise “infrastructure sharing” between operators, provided there is a formal agreement and specifications for both parties. In addition, although “construction and activity are across the territory, the laying of sub-marine cables and the construction of tele- ports for one or more satellite networks” are “the exclusive right of the State”, the 2010 Act points out that they can, however, “be granted to one or several public or private persons or entities.” Mtn Cameroun actually fell into this ditch to build the embankment point for subma- rine cables in Limbé, in the South- West region. And, according to our sources, Orange Cameroun is pre- paring to build its own in the resort destination of Kribi, in the South. Brice R. Mbodiam

July-August 2013 / N° 6-7 -45- BUSINESS IN CAMEROON

THE BUSINESS CLIMATE

ANDRÉ FOTSO’S PERSPECTIVE

President of the business association, Gicam, president of the Holding Taf Investment Group which spans three companies: 3T, Fme Gaz and Cometal “The business climate in Cameroon remains troubling”

“Company heads remain troubled by the overall business environment in Cameroon. The main source of the problem lies in the lag in the implementation of reforms, particularly those adopted in the framework of the Cameroon Business Forum (CBF). Out of 40 reforms approved for 2012, the final assessment showed that only 6 had been fully implemented while another 22 were in the process of being implemented. And for 2013, following the first meeting of the CBF assessment committee, it was determined that only four of the 46 adopted reforms had made any significant gains in implementation (the creation of the agency to promote SMEs; the adoption and promulgation of the law establishing private invest- the extension of performance con- the completion of these major ment incentives; the establishment of tracts to other port operators inter- construction projects processing deadlines in contentious vening in pre and post customs clear- • Respecting implementation dead- trade treaty disputes at the level of ance with the PAD). lines for CBF recommendations specialised Chambers of Commerce; On the whole, 14 issues continue to • The fight against unfair com- alarm business leaders in Cameroon, petition to protect our fledgling including: industry • The publication of the invest- • The reduction of communication ment incentives implementation costs texts • The creation of economic zones, The execution of reforms is an ardu- industrial zones and agricultural ous task. The chain of administrative basins decisions is quite long, the coordi- • Respecting deadlines for the nation of actions presents numerous completion of current infrastruc- inadequacies and operational capac- ture projects ities that actors need are often lack- • The inclusion of up to at least ing. Our priority is now to instil a 40% of national companies in results-oriented culture.”

-46- July-August 2013 / N° 6-7 BUSINESS IN CAMEROON GAS Natural gas sector: imports are filling up on natural gas

The arrival of new marketers is bution market, the sector has just construction of a liquefaction fac- giving the distribution market welcomed a new operator – Tradex, tory to be built in the town of Kribi a boost. However, there are still the public company and subsidiary in the south. This massive project to many other opportunities to be of Société nationale des hydrocar- be completed by GDF Suez and its had, particularly in the areas of bures or National Hydrocarbon American partners should enable local production, processing, and Company (SNH), the State’s right Cameroon to become a natural gas storage, all of which are structured arm in oil mining. exporter and ensure the local mar- by legislation amended in April ket’s domestic and industrial natu- 2012. Tradex Gaz made its market début ral gas needs. with 30,000 bottles (Oillybia was In the 2011-2012 period, domestic receiving just as many at the same The GDF Suez-Cameroon pro- natural gas consumption in Cam- moment) equipped with a con- ject is in full alignment with the eroon rose from 65,789 to 72,019 sumption counter. In so doing, it 2002 Cameroon Natural Gas Code, metric tonnes (MT). This marks contributes to the realisation of the which was amended by the Nation- an absolute value increase of 6,230 Cameroon government’s objectives al Assembly in April 2012 and pro- MT and a relative value of 9%. to raise the domestic natural gas claims in Article 2 the government’s These statistics provided by the consumption rate to 31% by 2020, a will “to promote the development of Hydrocarbon Price Stabilisation figure above the current 16.8%. But Cameroon’s natural gas sector,” and Fund (CSPH when abbreviated in to achieve this goal, there must also address the need “to create a favour- French) complement those of the be an improvement in the stability able environment for foreign and do- Cameroonian Ministry of Energy of the Société nationale de raffinage mestic private investors to enter the and Water which has found that or National Refinement Company natural gas sector.” In addition, any domestic natural gas consumption (Sonara)’s production which has natural gas agreements (of a maxi- has progressed at an average rate of declined from 25,697 MT between mum duration of 25 years with the 10% per annum over the course of 1998 and 1999 to 9,549 MT in 2012. possibility of prorogation up to 35 10 years. This represents a production slump years) with the Cameroonian gov- of 150%. At the same time, accord- ernment will result in the imple- This household shift to domes- ing to the CSPH, gas imports have mentation of a natural gas project tic natural gas may be explained climbed significantly from 3,700 with customs and fiscal incentives by the progressive coverage of the to 62,470 MT for the same period. and land ownership facilities. Cameroon market undertaken by This brings the import portion of As an example, the natural gas marketers who have continued to total domestic natural gas market code stipulates that for the first five extend their distribution network share to 87% in 2012. years of operations, a natural gas by building new service stations company could receive “guarantees and partnerships with approved ATTRACTIVE CUSTOMS AND required by lenders, customs duties distributors (MRS, Tradex and Oil- TAX ARRANGEMENTS reduced to 5%, VAT exemption and ibya are currently are in full partner In order to re-absorb this depend- transfer tax exemption on the acqui- recruitment drive). As if to attest to ency on imports, the Cameroon sition of property and land.” the array of business opportunities government, through SNH, is cur- In addition, Article 57 of the new that are still available in Came- rently drafting a natural gas mining Natural Gas Code states that, “in roon’s domestic natural gas distri- project proposal that involves the consideration of the size of invest-

July-August 2013 / N° 6-7 -47- BUSINESS IN CAMEROON

DOMESTIC NATURAL GAS DISTRIBUTORS AND MARKET SHARES ment required for such projects (…) and the anticipated economic returns (…) particularly for projects related to the construction of natural gas liquefaction factories and similar projects, natural gas companies, for a maximum period not exceeding 10 years, shall receive exemptions on general taxes, duties, income taxes and exemptions on the following charges: corporate taxes; VAT, customs duties; and any other tax, duty or other fee calculated based on the total sales of that entity; as well as exemptions on investment income tax, taxes on property that may or may not be built; and exemptions on any tax on the purchase or sale of foreign exchange or any indirect tax on consumption including the special tax on oil products.”

Société Camerounaise de Transformation Métallique or Cameroon Metal-Pro- cessing Company (SCTM). A public limited liability company specialised in the manufacturing of natural gas bottles and metallic equipment, SCTM entered the domestic natural gas market in 1990. Thanks to a distribution network covering the entire country, it has been the market leader in domestic natural gas distribution for several years with a market share of over 50% according to the Ministry of Energy and Water. Camgaz. Created following the merger of Shell-gaz and Transcogaz companies in 1973, the latest Ministry of Energy figures confirm that Camgaz shares the number 2 spot in domestic natural gas distribution with Total. Each of these operators has a market share of 18%. Total Cameroun. The market leader in the distribution of “white” oil products, specifically lamp oil, super and diesel (a 45% market share), this multinational represents only 18% of the domestic natural gas distribution market. Established in Cameroon since 1948, Total has been distributing natural gas since 1963. Aza afrigaz. Established in 2005, this Cameroonian company is pursuing its penetra- tion into the natural gas distribution market. After having only 0.49% of the market in late 2005, Aza Afrigaz now controls 11% of the natural gas distribution market. Its distribution network is made up of a few retailers in Douala and Yaoundé. Oilibya. This multinational, whose activities span all segments of oil mining, acquired Mobil Oil’s distribution network which was established in Cameroon in 1952. It holds a 6% market share in the natural gas distribution and is continuing to expand its network across the nation. MRS. This Nigerian multinational acquired Texaco Cameroun’s service station network. With 6% of the market share in domestic natural gas distribution, it is among the top 6 of the natural gas sector in Cameroon. Glocal Gaz. Known to the Ministry of Energy under the name Kosan Krisplaint, the Glocal natural gas company controls 6% of the natural gas distribution market in Cameroon. This company was created in 2006. Tradex Gaz. The newcomer to the natural gas market in Cameroon, and an SNH subsidiary, Tradex Gaz innovated by starting domestic natural gas distribution with the marketing of the first natural gas consumption control equipped bottles. With 33 service stations built in fewer than 10 years since its arrival on the oil product distribution market, this public company is laying its competitive hand on the domestic natural gas table.

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A STORAGE CAPACITY OF age of natural gas is addressed via a country’s main metropolitan areas: VIRTUALLY ZERO moderately more flexible licensing Douala, Yaoundé, Garoua, and Ba- The code even allows that “due agreement according to which 2.5 foussam. to the scale of a given project, the million francs (CFA) shall be paid This lack of storage infrastructure State may exceptionally extend tax to the Treasury for a licence and forced the CSPH to begin the con- exemptions to shareholders, lend- 2.5 million francs (CFA) shall be struction of natural gas packers, ers, promoters and other associates paid for renewal. particularly in Maroua and Ber- of natural gas operators by way In Cameroon, natural gas field toua. of contractual agreement.” These mining, processing and storage are In 2010, the CSPH, a kind of regu- incentives could certainly make all segments of an industry bub- latory body overseeing oil product other operators in the natural gas bling with business opportunities. procurement, had tried in vain to sector turn green with envy, even For example, an authorised source sign a contract with the Algeri- distributors and transporters who at the Ministry of Trade revealed an company, Sonatrach, to put in are subject to concession arrange- that, due to limited investments, place a storage ship to ensure the ments fraught with considerable the Société camerounaise des provision of domestic natural gas incentives. In this instance, the dépôts pétroliers or Cameroon Oil to the Cameroonian market in or- operator will however pay 5 mil- Depots Company (SCDP) has a der to put an end to the recurring lion francs (CFA) to receive a con- collective storage capacity of bare- shortages. cession as opposed to 7.5 million ly 4 days consumption. Further- francs (CFA) for renewal. The im- more, this parapublic company’s Brice R. Mbodiam port, export, processing and stor- storage tanks are all located in the

July-August 2013 / N° 6-7 -49- BUSINESS IN CAMEROON

Leader of the month: Lucas Abaga Nchama “The time has come for the BEAC to support the CEMAC economy”

Following the second meeting of cession instead of the anticipated the Monetary Policy Committee, 3% growth) with the announce- the governor of Banque des Etats ment of elections which, we hope, de l’Afrique centrale1 (BEAC) met will be held at the appointed time… with the press. The Libreville seminar focused on In your introductory remarks, you the sourcing of alternate financ- said that the BEAC needed to sup- ing. Where has your thought pro- port the economies of its member cess led you in relation to that? states to strengthen growth within LAN: We think that the prevailing State have adopted a regional eco- the sub-region. How do you plan idea that Africa is doing well and nomic programme. Financing is a to do that? that Europe, where our partners problem. We are willing to open a Lucas Abaga Nchama: the BEAC are, is doing badly is not true. The line of credit to the BDEAC (Ban- is the Central Bank. We must re- financial crisis is a global one and que de développement des Etats de member that growth is first and so it affects us as well. Around the l’Afrique centrale2), so that some of foremost a result of private sector world, central banks that can be the problems identified will be re- business. But, as a central bank, we considered to be modern are using solved. Why not? We could provide can, through our monetary policies, them with 1 trillion FCFA. I think adopt certain measures to encour- that the time has come for us to age the granting of loans. This is “We are made up of focus on our own job which is to what we are in the process of doing. oil-producing countries protect our currency and ensure the In so doing, we hope that banks will financing of our economy. lower their credit rates for business- and the growth outlook es. That should, we hope, resusci- for 2014 is promising.” Fifteen West African countries are tate economic activity and, thus, planning to adopt, by 2020, a cur- growth. But as I said earlier, we are rency that would not be the CFA. made up of oil-producing countries “unconventional” methods to sup- Within the CEMAC zone, does this and the growth outlook for 2014 is port their economies and respective sentiment also hold? promising. There will be some ac- States. The BEAC, which strives to LAN: You’re talking about twenty celeration because, during the de- attain the level of performance of countries, but I am about to at- velopment of our macro-economic these institutions, without calling tend a meeting in Mauritius during frameworks, there were member into question their statutory roles, which all of Africa will be consider- States that were showing figures can do more to improve financing ing the creation of a single currency. that would not have allowed for sig- in these economies. For the time It’s always a good thing when coun- nificant growth rates this year. But, being, I don’t want to betray any tries decide to align their paths to in light of production commencing of our secrets as far as what we’re the future. It’s possible that Central in the oil fields of some countries considering. But what I can say is Africa might consider this option. and our desire to see peace emerge that we’re thinking about urgent in the Central African Republic measures to face circumstances Remarks noted by (which has experienced a 14% re- that are deemed to be urgent. You Idriss Linge for Ecofin are aware that CEMAC Heads of 1) Central African States’ Bank 2) Central African States’ Development Bank

-50- July-August 2013 / N° 6-7 Be a part of building tomorrow’s Cameroon

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