Cameroon risk report
Corruption is endemic in Cameroon and significantly increases the costs and risks of doing business. Bribery, nepotism, and corruption are rife in almost all sectors of the Cameroonian government and economy; but is particularly prevalent in the judiciary, public services, and customs. The legal and regulatory systems are non-transparent and difficult for foreign companies to navigate. In addition, there exists a lack of effective regulations, insufficient law enforcement and significant delays in courts. Cameroon's Penal Code (in French) criminalizes corruption, bribery, extortion, and bribery of foreign public officials, and corruption is punishable by a prison term of five years to life, a fine of up to USD 4,000 and/or asset seizure. Facilitation payments and gifts are also addressed in Cameroon's legislation, yet insufficient implementation of anti-corruption legislation coupled with impunity among public officials has exacerbated the levels of corruption in the country.
Judicial system Very high risk
Corruption is rampant in Cameroon's judiciary, presenting companies with very high risks. Companies report a high frequency of bribes in exchange for favorable judgments (GCR 2015-2016). Judicial officials accept bribes in exchange for dropping charges, a reduction in prison sentences, or a release (HRR 2016). Over half of Cameroonians perceive the judiciary to be very corrupt (GCB 2015). The judiciary is not always free to independently investigate and prosecute cases of corruption (HRR 2016). Judges are susceptible to executive influence and delay judicial proceedings when pressured (HRR 2016). Judges and lawyers report frequent harassment, including arrest and detention, by government forces (Commonwealth Lawyers Association, Feb. 2017). The judiciary is inefficient, lacks adequate resources and expertise and has an inadequate tracking system of cases, resulting in lengthy court delays (ICS 2016).
Companies should beware that legal rights, including contract and property claims, can be difficult to protect due to extensive corruption in courts (BTI 2016). The process of dispute settlement is ineffective and oppressive as a result of courts being unreliable, very slow and selective in enforcing legislation (ICS 2016). Companies also find the courts to be inefficient when it comes to challenging government regulations (GCR 2016-2017). Cameroon is a member of the International Center for the Settlement of Investment Disputes (ICSID) and has ratified the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention). However, there is no domestic legislation for the enforcement of awards granted under either the ICSID nor the New York Convention (ICS 2016). Judgments from foreign courts can be enforced in Cameroon, but this may require extensive procedures (ICS 2016). The amount of time required to resolve a dispute and to enforce contracts greatly exceeds Sub-Saharan Africa's regional averages (DB 2017).
Police Very high risk
Cameroon's police force is inefficient, poorly trained and plagued by corruption. Bribery is widespread among the police and officers often demand payments at checkpoints and in exchange for granting unlawful freedom to detainees (HRR 2016). Further, corrupt police officials arrest and abuse individuals in exchange for monetary rewards from influential entities and individuals (HRR 2016). Over half of Cameroonians consider the police to be corrupt (GCB 2015). The government took some steps to hold officers accountable for abuse of functions, yet impunity remained widespread in the institution (HRR 2016). Cameroonian police cannot be relied upon to enforce law and order, and more than one in four firms identify crime, theft, and disorder as a major constraint (GCR 2016-2017, ES 2016). Companies do attribute significant costs to crime; three out of five firms pay for their own security (ES 2016, GCR 2016-2017).
Public services Very high risk
Cameroon's public services represent an area of high risk of corruption. Bribery, abuse of office and embezzlement are widespread in the public administration. Nearly half of all companies report expecting to give gifts to 'get things done' (ES 2016). Likewise, bribes and irregular payments are common when applying for public utilities (GCR 2015-2016). Administrative positions are usually appointed based on personal and business connections as well as political allegiance instead of merit (BTI 2016). Companies rank corruption as the most problematic factor for doing business in Cameroon, and dealing with burdensome administrative requirements further complicates the process of operating a business (GCR 2016-2017). Starting a business is less costly and less time-consuming than the regional average (DB 2017).
Land administration Very high risk
There is a significant risk of corruption in Cameroon's land administration. The processes of acquiring property and purchasing land titles are problematic due to widespread corruption and the inconsistent application of legislation (BTI 2016). Nearly half of businesses expect to give gifts in order to get a construction permit (ES 2016). Cameroonians frequently pay bribes to land administration officials for a variety of procedures (TI, Mar. 2017). Businesses report that protection of property rights is not adequate in Cameroon (GCR 2016-2017). There is a risk of expropriation in Cameroon. Illegal expropriations by the government can be challenged in the courts, but the judiciary suffers from corruption and backlogs, making the resolution of such cases difficult (ICS 2016). Transparency International also reports that in some instances land administration officials embezzle expropriation compensation funds (TI, Mar. 2017). Companies report spending almost twice as much time complying with the procedures related to registering property in Cameroon than in neighboring countries, placing it among the worst countries in the world for dealing with land authorities (DB 2017).
In May 2016, fourteen officials were arrested on charges of embezzling USD 9 million that was supposed to be paid as compensation to the owners of the expropriated land to make way for the construction of a deep-sea port in Kribi (VOA, May. 2016). However, many believe the arrests were at least in part motivated by President Biya's drive to silence his opponents (VOA, May. 2016). No further information was available on the case at the time of review.
Tax administration High risk
There is a moderately high risk of corruption in Cameroon's tax administration. More than one in five companies expects to give gifts when meeting with tax officials (ES 2016). Companies report frequent irregular payments and bribes to tax officials (GCR 2015-2016). Over half of Cameroonians consider most or all tax officials to be corrupt (GCB 2015). Businesses consider tax regulations and tax rates to be among the most problematic factors for doing business (GCR 2016-2017). Tax evasion, corruption, and embezzlement constitute the majority of the financial crimes committed in Cameroon (ICS 2016). Businesses in Cameroon spend more than twice the average of time to prepare, file and pay taxes compared to other countries in Sub-Saharan Africa (DB 2017).
Customs administration Very high risk
Customs is among the most corrupt public sectors in Cameroon. Corruption at the border and burdensome import procedures are frequently cited as two of the most problematic factors for trade for foreign companies (GETR 2016). Companies often complain about burdensome tariffs, a lack of transparency and frequent demands of irregular payments when importing and exporting goods across Cameroon's borders (GETR 2016). Almost one in four firms indicate they expect to give gifts to obtain an import license (ES 2016).
Allegations that Cameroonian government authorities are complicit in the illicit diamond trade exist. In the scheme, authorities issue so-called 'Kimberly Process' certificates which are supposed to prove the diamonds are not 'conflict diamonds', to diamonds smuggled in from the Central African Republic (PAC 2016). Smugglers reportedly bribe airport security officials to smuggle the diamonds out of Cameroon (PAC 2016).
Public procurement Very high risk
Cameroon's public procurement is plagued by bribery and fraud at every step of the process. Over half of companies expect to give gifts to secure government contracts in Cameroon (ES 2016). Bribes and irregular payments are often exchanged in return for obtaining contracts and licenses (GCR 2015-2016). Corruption and particularly embezzlement are pervasive in the sector, owing to weak supervision (ICS 2016). Most government tenders require competitive bidding, but objectivity in the process is often breached due to corruption (ICS 2016). Diversion of public funds is common and favoritism in decisions of government officials frequently occur (GCR 2016-2017). Due to the fact that governing boards of state-owned enterprises (SOEs) in Cameroon mostly consist of political appointees or connected individuals, SOEs are often able to avoid the tax burdens private companies face, receive subsidies, and generally receive preferential treatment (ICS 2016).
In 2015, the National Procurement Regulation Agency (ARMP) set up the Cameroon Online E-Procurement Systems (COLEPS) which aims to reduce direct contact with servants (TI 2016a). The government publishes a Public Procurement Code. Foreign companies are recommended to use a public procurement due diligence tool to mitigate corruption risks related to public procurement in Cameroon.
Natural resources Very high risk
Companies face high corruption risks when operating in the natural resources sector. Corruption is further exacerbated by a non-transparent revenue collecting system and opaque licensing processes for extractive industries (RGI). The Cameroonian forestry sector is plagued by corruption: Extensive bribery among senior officials, civil servants and companies in return for logging permits fuels illegal logging (TI 2016b). Risks of corruption are typified as high in the forestry sector (TI 2016b). State officials allegedly collect more than EUR 46 million in bribes per year from illegal logging practices (CHH 2013). Slow progress on the issue is being made; in 2016 the government suspended the licenses of 27 lodging companies and warned 35 other companies in addition to issuing fines (Reuters, Feb. 2017).
Likewise, the mining sector is generally rife with corruption (KPMG 2014). Cameroon has recently seen a string of failed mining projects in which investors in conjunction with powerful politicians managed to make millions of USD, despite the fact that no minerals at any point were extracted from the ground (African Arguments, Mar. 2016).
Cameroon does not effectively implement anti-corruption legislation and high-level officials often act with impunity (HRR 2016). Cameroon has no specific anti-corruption law, but the Penal Code criminalizes active and passive bribery, extortion, bribing a foreign official, money laundering and misuse of public funds for private gain. The Penal Code was updated in 2016 to integrate the United Nations Convention Against Corruption (HRR 2016). Criminal penalties for corruption include a prison term of five years to life, a fine of up to USD 4,000 and asset seizure. In cases of theft and embezzlement of public funds, corruption charges can be dropped if the money is repaid to the government. Article 66 of Cameroon's Constitution, which requires government officials and civil servants to declare their assets and property, is not enforced. The Cameroonian Code of Ethics (in French) addresses conflicts of interest and provides regulations for the ethical conduct of civil servants in all public institutions. The Public Contract Code regulates public procurement, provides for open competition procedure and forbids the fractioning of public contracts. Any company found guilty of corruption in the process of government procurement can be debarred for two-years. Civil servants and private-sector employees are not legally protected from recrimination or other negative consequences when they report cases of corruption. Cameroon's National Anti-Corruption Agency (CONAC) reported that for its 2016 report, eleven ministries and agencies refused to supply them with information (Cameroon Intelligence Report, Dec. 2016), casting doubt on the agency's ability to fight corruption.
Cameroon has ratified the United Nations Convention Against Corruption and has signed but not yet ratified the African Union Convention on Preventing and Combating Corruption.
The Constitution of Cameroon provides for freedoms of speech and press, but the government severely restricts these rights in practice (HRR 2016). The government financially supports media outlets supportive and favorable of the government, and officials use criminal libel and defamation laws to pursue and intimidate independent newspapers that report on corruption and economic policies (HRR 2016; FotP 2016). The burden of proof in defamation cases rests on the defendant; speaking the truth is not a defense (FotP 2016). Critical journalists face threats, harassment, arrests and reprisals (HRR 2016). Freedom of information is very limited; state-owned media often get privileged access to official sources (FotP 2016). Journalists extensively practice self-censorship and withhold from criticizing individual officials (FotP 2016). The media environment is considered 'not free' (FotP 2016).
A large part of Cameroon's civil society is represented by strong church-based organizations (BTI 2016). Civil society organizations (CSOs) can be formed freely, but many are created by state officials who seek to profit from external assistance programmes. In recent years, civil society has weakened and many NGOs rely entirely on foreign funding, while others have been co-opted by the government (FitW 2016). The government exercises control over anti-corruption CSOs and their activity, otherwise being indifferent to civic engagement in socio-economic issues (BTI 2016). The government prevents CSOs from holding press conferences on the issues of corruption or abuse of office (HRR 2016; BTI 2016).
- World Bank Group: Doing Business 2017.
- World Economic Forum: Global Competitiveness Report 2016-2017.
- Transparency International: Land Corruption in Africa - Finding Evidence, Triggering Change 2017
- Commonwealth Lawyers Association: "Statement on the Arrest And Detention of Lawyers and Judges in The Cameroon", 7 February 2017.
- Reuters: "Armed with Smartphones, Cameroon Forest Defenders Take on Illegal Loggers", 3 February 2017.
- Bertelsmann Foundation: Transformation Index 2016.
- US Department of State: Human Rights Practices 2016.
- US Department of State: Investment Climate Statement 2016.
- Partnership Africa Canada: From Conflict to Illicit: Mapping the Diamond Trade from Central African Republic to Cameroon 2016.
- World Economic Forum: Global Enabling Trade Report 2016.
- World Bank: Enterprise Survey 2016.
- Freedom House: Freedom of the Press 2016.
- Freedom House: Freedom in the World 2016.
- Transparency International: Cameroon: Overview of Corruption and Anti-Corruption 2016a.
- Transparency International: REDD+ and Corruption Risks for Africa's Forests: Case Studies from Cameroon, Ghana, Zambia and Zimbabwe 2016b.
- Cameroon Intelligence Report: "Fight Against Corruption Becomes Optional as Dozens of Cabinet Ministers Snub CONAC", 31 December 2016.
- Voice of America: "Corruption Probe Nabs 14 More Cameroon Officials", 17 May 2016.
- African Arguments: "Virtual Mining in Cameroon: How to Make A Fortune by Failing", 14 March 2016.
- World Economic Forum: Global Competitiveness Report 2015-2016.
- Transparency International: Global Corruption Barometer 2015.
- Carnegie Endowment for International Peace: "The Oil Curse: A Remedial Role for the Oil Industry", 30 September 2015.
- KPMG: Cameroon Country Mining Guide 2014.
- World Bank: Customs, Brokers, and Informal Sectors 2014.
- Center for International Forestry Research: Cameroon's hidden harvest 2013.
- UNDP & University of Yaounde: African Economic Conference 2012.