THE PARADOX OF INVESTMENT INCENTIVES IN CAMEROON

Abstract

This study investigates the Paradox of investment incentives in Cameroon. The economy of Cameroon has witnessed double-digit trend of economic growth before 1986, as public expenditure exerted significant expansion in the size of public sector and a declined period after 1986 characterized by government deficit expenditure. With the declining economy, a number of empirical studies have identified investment as one of the major factors conditioning economic performance in the African continent and capital formation is thus considered one of the essential components or requirements of GDP growth. The effect of investment on economic growth is large, statistically significant, and robust. Cameroon adoption of the Structural Adjustment Plan (SAP) had as one of its principal objectives the promotion of investment, especially that of the private sector. In spite of the relative rise in the amount of investment over the past years, controversies about its effectiveness abound. Cameroon still faces continuous rate of unemployment, slow economic growth and poverty, thus the benefits of FDI on the economic development of Cameroon have been queried. It is for this objective that the researcher tries to bring out proposed solutions that can go a long way in redressing the weaknesses of the investment code. The experienced persistent decrease in foreign and local investment by foreign investors thus raised room for questioning why despite all the beautiful and attractive incentives and legislations put in place by the Cameroonian government, the investment flow (Private/local investments and FDI) are still very biased? This research holds the assumption that investment policies are too open to the advantage of the investors at the same time a disadvantage to the host country, yet its implementation and enforcement measures at the establishment and operational phases, investors are still not attracted to foreign investment. The researcher thereby uses a standardised literature review making use of information from books, internet websites etc. Incentives from the 2002 Charter to the 2013 and its amended provisions of 2017 have actually attracted investors but their existence on the ground is not found. The main recommendation is that the Policy Structures of the 2017 amending the 2013 Private Investment Incentive Code should be fully implemented, IPAs should be well structured and corruption streamlined at the level of the establishment and operational phases for a Substantive investment climate.

Keywords: Cameroon Economy, Investment Incentives, Structural Adjustment Plan, Private Sector Investment, Foreign Direct Investment

CITATION: Awasum, M. F.,& Kelese, G. N. (2024). The paradox of investment incentives in Cameroon. The Strategic Journal of Business & Change Management, 11 (1), 632 – 661. http://dx.doi.org/10.61426/sjbcm.v11i1.2876