Cameroon’s Regulatory Hurdles Take Center Stage in Talks to Unlock U.S. Investment

Foreign-exchange restrictions, fintech rules, infrastructure gaps and administrative hurdles are emerging as central issues in Cameroon’s effort to attract more U.S. capital, with investors arguing that the country’s economic potential will be difficult to translate into projects without a more predictable business environment.

Government officials, companies and investors gathered in Yaoundé on Aug. 26 for a Business Climate Forum organized by the U.S. Embassy and AmCham Cameroon to identify obstacles to investment in banking, fintech, technology, agribusiness and mining.

AmCham Cameroon President Laure E. Djoukam said the sectors were selected because they illustrate both Cameroon’s significant opportunities and some of the cross-cutting constraints affecting investment. She pointed to natural resources, Cameroon’s position in Central Africa, access to regional markets and its young population among the country’s advantages.

But investors also need predictability, transparency, efficient administrative procedures, access to financing and foreign exchange, reliable infrastructure and a regulatory and legal environment that allows businesses to plan for the long term, Djoukam said.

The forum focused on identifying practical solutions involving the government, private sector and international partners.

Foreign exchange and fintech face constraints

In banking and finance, companies highlighted difficulties transferring funds outside the Central African Economic and Monetary Community. According to participants, international transfers can take between two weeks and a month because of documentation requirements, complicating payments and the repatriation of dividends and profits.

Discussions also referred to an official rate of 570 compared with market demand at 600, although the material presented at the forum did not specify the currency scope of those figures.

Fintech companies face a different set of constraints. Operators said a new requirement to pre-fund international transfers may have diverted nearly two-thirds of transaction volumes to informal channels.

Other issues raised included a 0.2% tax on transfers and another 0.2% on withdrawals, a CFA100,000 ceiling on certain credits for three months, and the absence of a regulatory sandbox in CEMAC. Formal financial inclusion, meanwhile, was reported to have increased from 12% to 28%.

Proposals discussed at the forum included quickly establishing a regulatory sandbox, reviewing some foreign-exchange surrender rules, raising the threshold for transfers that do not require prior authorization from the Bank of Central African States, or BEAC, and further digitizing and connecting platforms.

Mobile Money, Starlink and a shortage of investment-ready projects

Cameroon has more than 10 million Mobile Money accounts and more than $5 billion in transactions, according to figures presented at the forum. Yet participants said there are too few sufficiently structured start-ups capable of absorbing an investment of around $100 million.

Difficulties repatriating profits were also cited as a disadvantage for Cameroon compared with markets such as Senegal and Angola.

Energy and connectivity were identified as foundations of the digital economy. Participants also discussed the potential entry of satellite internet providers such as Starlink.

Mountain Hub President Ayuk Etta said Starlink would not eliminate local telecom operators but could force them to improve their services, ultimately benefiting consumers.

According to information presented at the forum, Starlink is considered secure and efficient but would still have to meet security requirements and be assessed against its wider economic impact. Participants contrasted the potential creation of 15 to 20 local jobs with the hundreds or thousands supported by operators such as Orange and MTN.

An Efficient Component Pricing Rule was discussed as one possible approach to ensuring fair compensation. Participants also put the cost of a full telecommunications license at more than CFA800 billion. Fiber-optic infrastructure was identified as another area with investment potential.

Agribusiness deficits create investment opportunities

In agribusiness, domestic production shortages were presented as potential investment opportunities.

Cameroon was reported to face an annual fish deficit of more than 200,000 tons and a meat deficit of about 175,000 tons. Nearly 90% of feed used for fish and poultry production is reportedly imported, creating opportunities in aquaculture and local animal-feed production. Participants said some investments could generate returns in roughly two years.

Exporters, meanwhile, must deal with several government agencies, including the Ministry of Trade and Customs, without a single point of contact.

The forum recommended reducing costs and procedures, providing businesses with better information and strengthening cooperation to help exporters meet international standards.

More than 200 mining titles, but limited production

Mining presents a different challenge: converting licenses into operating projects.

More than 200 licenses or mining titles have not all resulted in significant production. Forum documents cited 25 gold mines that generate very little tax revenue, partly because some licenses were reportedly awarded to companies without sufficient capacity.

Cameroon’s 2023 Mining Code maintains the state’s free, non-dilutable 10% stake in mining companies while introducing production-sharing requirements. The state’s share ranges from 1% to 5% for precious and semi-precious minerals and from 2% to 15% for other mineral resources, depending on project conditions.

Investors said licenses are relatively accessible but difficult to turn into operational projects and called for a permanent platform for dialogue with the government.

Mineral testing is still conducted abroad. According to information presented at the forum, SGS is working with the Ministry of Mines on establishing a local laboratory. The institution responsible for mining research, which initially received CFA10 billion, would require an additional CFA6 billion a year.

Up to $15 billion in potential investment

Across the sectors discussed, the central issue was Cameroon’s ability to improve the conditions under which investment can move from interest to execution.

Priorities identified at the forum included digital-finance regulation, international transfers, digital and energy infrastructure, enforcement of personal-data legislation, trade procedures, agribusiness and mining value chains, and greater domestic processing and testing capacity.

The forum preceded the first Cameroon-U.S. bilateral Economic and Commercial Dialogue, scheduled for Aug. 27 in Yaoundé. A U.S. delegation led by Sarah Troutman, deputy assistant secretary of state for African affairs, is expected to meet Cameroonian officials.

U.S. officials cited on the sidelines of the forum said Washington wants Yaoundé to improve its regulatory framework to help unlock as much as $15 billion in potential investment. No detailed portfolio of projects supporting that figure has been made public.

Ludovic Amara