Gearing up for growth

Cameroon unveils opportunities in large-scale projects that will create growth and prosperity

As a resource-rich country looking to engage sustainable development, Cameroon is moving further into the radar of global investors, particularly those in China.

The Central African republic, with 420 kilometers of Atlantic coastline stands out for its peace and stability within the region.

Headed by President Paul Biya, who was re-elected for a seven-year term in October 2011, this stunning country of 20 million people recently embarked on a mandate of "greater achievements", with huge infrastructural projects for energy, transport and agriculture launched last year.

"Cameroon will be transformed into a huge construction site," President Biya declared, referring to the national program put in place to develop roads, infrastructure, power production and transport networks.

"Cameroon has now embarked on the path toward emergence. The public investment budget for 2012 was significantly increased and assigned in two areas: infrastructure and production."

Brimming with fertile land and resources that range from oil and gas, timber, cotton, coffee, cocoa, and rubber, to diamonds iron, cobalt and bauxite, Cameroon is a natural choice for investors looking for rich returns.

A number of public reforms have been implemented and a welcoming business climate beckons. In order to fully unlock the country's potential however, the government plans to increase the national grid by a further 2,000 megawatts by 2020 - a move that will create 1,000 local jobs and ignite local industries.

Work on the huge Lom Pangar Dam started last August in the East of the country. Reminiscent of China's Three Gorges Dam, this is just one of the many hydropower schemes being undertaken in Cameroon with Chinese funding.

Work has also begun on the Kribi natural gas power plant which will have a gross capacity of 216 megawatts when completed.

Another power plant at Nachtigal, due to be commissioned within three years, is expected to produce between 200 and 250 megawatts.

Secure and transparent

In August this year, Cameroon joined an elite club of 77 countries when it was admitted to the Kimberley Process Certification Scheme. The move has lifted Cameroon into the realm of clean, secure, and transparent diamond producers, and will have a significant impact on the World Bank's Doing Business Index and Transparency International's rankings.

Beyond the traceability and openness that ensures the Kimberley Process, Cameroon will be able to increase its tax revenues.

Historic changes are also afoot within the economic, financial, social and cultural sectors, including the modernization of the rural economy. The launch of the Agricultural Bank and the Bank for SMEs will serve these communities and ultimately increase productivity by providing access to loans.

Thousands of low-cost houses are also being built in 20 cities around the country, and the government is keen to set up professional schools specializing in hotel management, tourism and agriculture. And, with only 10 percent of the country's roads currently paved, new and upgraded road and bridge links are urgently needed.

All works form part of the government's Vision 2035 initiative, outlined in the Growth and Employment Strategy Paper that will see Cameroon become an emerging market by 2035.

Poverty alleviation, industrialization, the consolidation of democracy and national unity and respect for diversity all feature as medium-term objectives for this microcosm of Africa.

As the strategy paper points out: "Cameroon's ambition is to transform from a primary phase to secondary import substitution phase with the manufacturing industry accounting for more than 23 percent of the gross domestic product, as against the current 11 percent and a secondary sector as a whole (including extractive industries) accounting for 40 percent of the gross domestic product.

"When Cameroon becomes an emerging country, its economy will be mainstreamed into the global economy in terms of trade and exports and the opening of local financial markets to foreign investments.

"At the macroeconomic level, the vision highlights the need to accelerate growth by stepping up forest, agro-pastoral and fishing activities and ensuring an industrial technological advancement with emphasis on the processing of local commodities. For this goal to be achieved, the vision advocates the stepping up of investments as the engine of growth. The development of industries and an ambitious trade policy should gradually lead to a change of the foreign trade pattern towards a more vigorous integration in world and regional transactions."

As a clear indication of Cameroon's potential, an International Monetary Fund mission visiting in May declared its economic prospects as "favorable" and predicted growth would reach 4.7 percent this year, due to a rebound in oil production and exports, increased public investment in infrastructure and ongoing initiatives to improve agricultural productivity.

While China has been a crucial partner of Cameroon for over 40 years, cooperation between the two states has reached new levels lately, with Chinese companies heavily participating in large-scale energy, water and infrastructure projects.

A model in Africa

President Biya qualifies the Sino-Cameroonian relation as "a model in Africa." At the beginning of 2011, Chinese Vice-Premier Hui Liangyu visited Cameroon, while President Biya responded to Chinese President Hu Jintao's invitation with a three-day state visit to China in July 2011.

As a result of these meetings, several agreements were signed that have further strengthened the long-running bond between the two countries.

Xue Jinwei, who was China's ambassador in Cameroon for two and a half years until this summer, detailed the warm nature of the relationship: "We are both friend and brother countries, with a similar history and a common goal of development. We are especially convinced of developing our cooperation on the basis of sincere friendship, mutual equality and mutual benefit," he said.

"The new century opened up more cooperation in the fields of energy, health, education and infrastructure. In 2012, our major projects include road building, the Douala-Yaounde highway, the construction of 1,500 housing units by Chinese companies, the deepwater seaport at Kribi, and improvement of the provision of drinking water in remote areas."

In this latter field, Chinese donors have been actively engaged with the Cameroon Water Utilities Corporation (Camwater) to enhance water supplies in the economic capital of Douala.

Other projects are also under negotiation, particularly in agriculture. Currently only 16 percent of arable land is used, yet Cameroon has huge agricultural potential.

This is particularly true in the palm oil business, where local companies, such as Pamol Plantations Plc, are actively seeking partnerships with Chinese investors in order to develop their capacities.

"Eximbank is playing a key role in the implementation of those major projects," Xue concluded. "The friendly relations will develop further, but 2012 is primarily a year of completion and implementation of the projects launched last year."

InFocus provided the story.

(China Daily 09/25/2012 page15)