The Case of the Transport Sector

chapter 11 Institutional and Contextual Factors Effects on Entrepreneurship in Cameroon: The Case of the Transport Sector Françoise Okah-Efogo and Crescence Marie-France Okah-Atenga Introduction In Africa, whatever the considered age group, there are more entrepreneurs in the early stages of entrepreneurship than anywhere else in the world (Global Entrepreneurship Monitor (gem) Report 2014). According to the gem survey (2014), 55.57 per cent of the population between 18–64 years expresses entrepreneurial intentions in Cameroon. Similarly, 37.4 per cent of the same age population is in the early course of their business activity. Between 2014 and 2015, total entrepreneurial activity has decreased in Cameroon (from 37.4 per cent to 25.4 per cent of all adults). Nonetheless, 61.1 per cent of the respon- dents think that entrepreneurship is a good career choice (gem Report 2015). Furthermore, smes contribute to gross domestic product (gdp) at a level of 36 per cent. According to the same surveys and to Okah Efogo and Timba (2015), more than 50 per cent of entrepreneurship activities are opportunity-driven. More- over, financing problems are the second factor hindering entrepreneurship, behind technology transfer issues. Yet, most articles and books published on entrepreneurship focus mainly on developed countries. This study partici- pates in bridging the gap. In this perspective, it has three purposes: namely, to identify the institutional and contextual factors that represent barriers and/or opportunities for entrepreneurship in theory; to assess their potential impact in the specific context of Cameroon; and to propose strategies to alleviate constraints based on the experience of some enterprises. Specifically, this study is based on the case of three Cameroonian companies in the transport sector. To avoid negative publicity for these companies, we will call them company 1, company 2, and company 3. These companies have operated in Cameroon for 18 years, 17 years and 11 years, respectively. Their activities cover, respectively, the Centre, East, Littoral, North,1 South, South-West 1 Broader definition: Adamawa, Extreme-North and North. © Françoise Okah-Efogo et al., 2017 | doi 10.1163/9789004351615_012 This is an open access chapter distributed underFrançoise the terms Okah-Efogo of the CCand BY-NC-ND Crescence Marie-France4.0 license. Okah-Atenga - 9789004351615 Downloaded from Brill.com10/02/2021 03:14:11PM via free access 256 Okah-Efogo and Okah-Atenga and North-West regions. The different destinations allow for the capturing of cultural specificities and diversity in Cameroon, generally called “small Africa” (Tchawa 2012; Henry 2008). The choice of this sector is based on several facts. Firstly, the report transtat (2014) from the Ministry of Transport states that this sector plays an important role and has had an increasing contribution to the gdp between 2009 and 2013 (33.33 per cent). But demographic growth and the resulting movements of populations from villages to towns or from one region to an- other, for economic purposes, induce the need for a better supply of transport services in terms of quantity and quality. Secondly, between 2006 and 2016, 466 persons (357 for the French version and 109 for the English version, Cameroon is bilingual) expressed their opinion on the quality of transport in Cameroon through an online survey on the Cam- eroonian Ministry of Transport website (last accessed on 2 May 2016). More than 60 per cent of them declare that the quality of transport is poor. This perception is corroborated in the transtat report, which shows that most of the vehicles operating in Cameroon are ten to 20 years old (75 per cent of new registrations, 83.4 per cent of re-registrations; Ministry of Transport 2014: 58). Despite the age of the vehicles, the number of accidents has decreased. The National Statistical Institute reports an increase in transport prices of 14.2 per cent in July 2014. Nevertheless, some enterprises offering transport services can be seen as success stories, given their long life span (more than 15 years). Therefore, a study on transport firms could help to shed light on barriers and opportunities relating to entrepreneurship in Cameroon, to understand the managerial choices of entrepreneurs, and to highlight the influence of culture through passengers’ behaviour. Such a study is of both scientific and contextual interest. At the contextual level, the study highlights the institutional and cultural factors that influence the development of enterprises in Cameroon. The goal is to identify weaknesses in the system of entrepreneurship promotion and to propose solutions that would improve the creation and survival of enterprises given the fact that they are important tools against poverty through job creation. On the scientific plan, the case studies enrich the literature on entrepreneurship in Africa, especially regarding the impact of institutional and contextual factors. The specifics of the Cameroonian business context are taken from a docu- mentary analysis. The main documents are legal documents (laws and other legislation), periodic reports from national and international agencies Françoise Okah-Efogo and Crescence Marie-France Okah-Atenga - 9789004351615 Downloaded from Brill.com10/02/2021 03:14:11PM via free access <UN> The Case of the Transport Sector 257 ( Ministry of Transport, GEM and others) and other publications. The case study part is based on a semi-directive survey addressed to managers of the three selected companies. The remainder of this chapter is organised as follows: a brief introduction is followed by a look at the actual entrepreneurship context in Cameroon. We then underline the main opportunities and barriers and subsequently discuss the case of three transport companies. The chapter closes with a summary of our findings. The results should reveal that if the regulatory changes have simplified creation of enterprises in the transport sector, it remains that other factors including road infrastructure, financial needs, and the behaviour of different actors linked to the Cameroonian culture are likely to hinder entrepreneurship growth and survival. Global Environment of Entrepreneurship Development in Cameroon This section begins with a brief review of the influence of institutions and context on the propensity to undertake and on the effects of entrepreneurship. This helps to identify the main institutional elements to evaluate the at- tractiveness of the Cameroonian context for entrepreneurship in general, and more specifically in the transport sector. Hence, the section ends with a de- scription of the institutional context of entrepreneurship in Cameroon. A Brief Theoretical Review on Institutions, Context, and Entrepreneurship Since the work of Porter (1985), the environment of an enterprise has been identified as an important component of the performance of a company and specifically its competitiveness. This idea is also echoed by more recent authors (Niyonsaba 2013). With particular reference to the transport sector, Didier & Prud’homme (2007) note in their report that the activity is linked, among other things, to the physical, economic and institutional organiza- tion of the country. Economic theory of enterprise defines environment as all external forces that act and react in favour of or against the activity and health of a company. The usual taxonomy distinguishes three types of envi- ronments: the macro-environment, the meso-environment, and the microen- vironment. A less common classification can be represented by the following figure (Figure 11.1): Françoise Okah-Efogo and Crescence Marie-France Okah-Atenga - 9789004351615 Downloaded from Brill.com10/02/2021 03:14:11PM via free access <UN> 258 Okah-Efogo and Okah-Atenga Institutional Technological and Legal Environment Environment Socio- cultural Competitive Environment Environment Demographic Social Environment Environment General International Economic Enterprise Environment Environment Figure 11.1 Environment elements of enterprises Source: bressy and konkuyt (2014) The environment elements of enterprise may be constraints or opportunities that are binding influences on entrepreneurship. Concerning the sociocultural environment, it is closely linked to the context and refers to lifestyles, moral and aesthetic values, and others that affect customers’ economic needs and behaviour. The institutional environment is the framework that established all the rules to which the company must comply (tax regulations, commercial, social, etc.). Theoretically, the beginnings of an institutional theory of entrepreneurship can be found in the work of Baumol (1990). He rejects the hypothesis that an invisible hand would ensure markets’ efficient functioning. He demonstrates that instruments leading to optimal entrepreneurship, i.e. innovative, sustain- able, and productive entrepreneurship, are very concrete steps. Precisely, gov- ernment actions should lead to an incentive-rich institutional environment. This task is realised through the establishment of rules of law, implementa- tion of tax arrangements, and the like. Baumol adds that institutions are the best levers for entrepreneurship development because they can be profoundly and rapidly changed (Pacitto et al. 2014). If the allocative effect of institutions on entrepreneurial activities has been validated by empirical studies (see for example the work of Sobel, 2008), Williamson (2000) qualifies this theory by showing through a

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