Using ODA to fund investment projects in developing countries is getting expensive. Cameroon needs to seek alternative and low cost means to fund its development. This digital artifact presents how FDI could achieve this aim.

1. FUNDING CAMEROON’S
DEVELOPMENT THROUGH
FOREIGN DIRECT INVESTMENT
PRESENTED BY
SHUDZEKA ERIC TEWIY

2. Country specifics
 Region: Sub-Saharan Africa
 Income category: Lower middle income
 Population: 21,699,631
 GNI per capita (US$): 1,170
 Doing Business 2014 rank: 168
 Doing Business 2013 rank: 162*
 Change in rank: -6
 surface area: 475650 km2
(sources: Doing Business 2014 and NIS 2013)

3. Target audience
The general audience is the Cameroonian public
The target audience will include:
 Policy makers
 Multinational enterprises
 The scientific community
 The educational community
 Cameroonian entrepreneurs

4. Area of focus
 Cameroon’s greatest challenge is achieving
sustainable economic growth
 This presentation focuses on how FDI will
help achieve such economic growth

5. Presentation objectives
 To propose an alternative means of financing
Cameroon’s development using foreign direct
investment
 To propose holistic measures that could help
achieve sustainable economic growth in Cameroon

6. What is FDI?
Foreign Direct Investment occurs
when a firm invests directly in
facilities in a foreign country
A firm that engages in FDI becomes
a multinational enterprise

7. The Problem
 Cameroon’s labor market is
characterized by a large share of the
labor force occupied in the informal
sector with few formal jobs
 Unemployment is low, at about 31% in
2013 (NIS, 2013), because most
Cameroonians cannot afford not to be
working. Most of these jobs, however,
have extremely low productivity and
generate very little money
 The challenge is thus to enhance the
productivity – hence the earnings – of
those already employed, while at the
same time creating more formal jobs.

8. The problem cont’d
 An unfavorable investment climate, particularly inappropriate infrastructure,
is also holding the country back
 Despite the noted constant economic growth, from 1.9% in 2009 through 3.3
in 2010 to 5.4 in 2014, the country is still groping towards emergence

9. Problem continued
• The effects of the economic
growth is yet to be felt by
the common man
• Much revenue is therefore
needed to boost the
economy
• With its high external debt,
which stood at 1179.9 billion
FCFA in 2011 (MINFI, 2012),
taking external loans will
greatly increase the
country’s precarious nature
• Loans are not an option now
because much revenue is
spent on servicing debts
(confer 134 billion FCFA out
of a total of 1763 billion on
2013 budget)
• FDI could therefore be the
missing link

10. My theory of Change
 In lieu of taking external loans, the government of Cameroon could engage
in the following:
 Create a favorable climate for multinational firms to invest in Cameroon
 Provide tax rebates for multinational firms who want to invest in
Cameroon
 Multinational firms must take obligations that as part of their corporate
social responsibility, they will
 provide social facilities to the local population such as hospitals,
schools, roads and electricity
 employ a given percentage of Cameroonians as part of their skilled and
unskilled labour
 act as internship and mentorship training centres for young
Cameroonians
 collaborate with schools and Cameroonian authorities in designing
curriculum such that training will be geared towards industrial needs

11. Why would the Government be
interested?
 This will reduce its yearly expenditure by
close to 134 billion FCFA
 It will increase its revenue through the
collection of taxes from companies that
grow around the multinationals (in their
value chains and value networks)
 It will increase employment opportunities
in the country
 This will reduce government expenditure
on the provision of social facilities such as
roads, hospitals, schools, etc
 The release of such funds could then be
used to invest in sectors such as energy,
port facilities and boosting local
entrepreneurship

12. Government interest cont’d
 FDI in this way will help align education to the world of work
by multinationals helping schools design their curricula
 it will also help increase local entrepreneurship by
multinationals posing as role models and mentors
 It will lead to the provision of essential goods and services
that could not be provided by the government alone
 Multinationals will help in the reengineering of Cameroonian
organisations by providing newer organizational structures and
increase competition
 It will reduce dependence on the export of primary products
whose prices fluctuate and could lead the country to an
economic crisis

13. Why would multinational firms be
interested?
 They get a tax rebate that reduces their expenditure
 The country is enjoying a constant economic growth of about 5.4% despite the
average of about 2% in Sub Saharan Africa
 The country is engaging in many infrastructure investments that would boost
the economic climate such as the Lom Pangar energy project, the Kribi deep
sea port project, the Wouri bridge project etc (MINFI, 2012)
 There is a ready supply of labour that could be easily sourced from among the
152 institutions of higher learning in the country (NIS, 2013)
 There is the presence of extensive raw materials and a ready market for their
produce

14. Why would the private sector be
interested?
 They also benefit from the social facilities provided by the
multinationals
 There is a great opportunity for the formation of inter-
organisational dyads (alliances and partnerships)
 They benefit from the knowledge and training that comes
through the partnership of multinationals with universities
and institutions of learning

15. Conclusion
For Cameroon to become “An Emerging,
Democratic and United Country in Diversity”
(Vision 2035), a holistic approach to
development would be required. One of the
major approaches would be to reduce loans
and increase FDI to finance development.

16. References
 Cameroon Vision 20135
 Doing Business 2014, Cameroon
 IMF (2012). Unlocking the labour force: An Economic Update on Cameroon
 MINFI(2012). Proceedings of the Annual Conference of MINFI Central and
Devolved Services, 2012 Edition
 MINFI (2013). Report on the Financial situation 2012 and prospects for the
nation 2013 financial year
 National Institute of Statistics (2013). Annuaire des Statistiques du Cameroon
2013