Cameroon

Special Supplement: Cameroon

January 2912   1

HISTORICAL OVERVIEW

Cameroon has a rich historical heritage and cultural legacy that have endowed its citizens with an enthusiastic vision and commitment to the country’s future potential and opportunities.

B

ecause of the diversity of its geography and the tapestry of its multi-ethnic population, Cameroon has long been celebrated as a nation that represents “All of Africa” in one country. According to historical and archeological evidence, humans have inhabited Cameroon for the past 50,000 years. During its pre-colonial history, the region was host to several ancient African kingdoms and cultures. Throughout its early history the region has experienced a steady flow of migrations by various ethnic groups from outside the region—and today Cameroon is recognized as one of most diverse societies on the African continent.

A Group of Trad

itional Dancers

in the shadow of the country’s past circumstances.

These challenges included an undeveloped economy, inadequate infrastructure, and weak public sector institutions. However, the people of Cameroon have retained, transformed, and engaged their unique traditions and cultural values with a strong sense of purpose, foresight, and fortitude. And one of the most consistent and favorable narratives in the nation’s Early historical timelines indicate that the A Traditional Horse Parade short history has been first foreign visitors to reach the shores of the perseverance and Cameroon were the Phoenicians, subsecan-do spirit of the quently followed by Portuguese and Dutch Cameroon is Cameroonian people. explorers and traders. During the European In addition, the country scramble for African colonies, the region recognized as one has established a track was originally colonized by the Germans, record for political who were later forced to relinquish their of most diverse stability and a slow but African colonies after WWI to other Eurosteady march towards pean powers—including Cameroon, which societies on the progress. Today this came under the joint colonial administration young and vibrant of the French and the British. Cameroon African continent.

African nation is acceleventually gained its political independence A Traditional Model Village erating its development from colonial rule in 1960. strategy and process, and it is on the threshold of becoming one of the continent’s Since gaining its independence several decades ago, like most former African colonies, Wearing the National Colors with Pride fastest growing emerging middle market economies.

Cameroon was confronted with a number of daunting challenges to building a new nation

“

Grounded in Tradition with a Vision for the Future CAMEROON

GDP growth %

2.6

2.9

GDP $bn

2

2.9

23.73

22.19

21.88

22.49

2008

2009

2010

2011

Edited by:

■ Population: 19.5m ■ Urban population: 58% ■ Life expectancy: 53 ■ Ethnic groups: Cameroon highlanders, Equatorial Bantu, Kirdi, Fulani, Northwestern Bantu ■ Literacy: 68% ■ Mobile phone penetration: 37.9% ■ Government expenditure as % of GDP: 3% ■ Current account as % of GDP: -3.9% ■ Aid flows: $524.6m ■ FDI: $337m ■ Main export: Oil

Shelvin D. Longmire Karen Dickerson

About the Editors: Shelvin D. Longmire is a Washingtonbased international consultant, and he currently serves as the US Director for Afrique Expansion, Inc. He is also the former Managing Director of the Global Africa Media Group.

Karen Dickerson is a leading media relations and strategic communications consultant, and her clients have included the Corporate Council on Africa and the World Bank Group.

The full content and views expressed in this supplement are exclusively the responsibility of the editors; and do not reflect or imply any endorsement, concurrence, or liability of The Washington Diplomat.

Designed by: Claire Lesesne

www.jandcdesigns.com

2 January 2012

L

ocated in the Gulf of Guinea, The the primary market entry portal Republic of Cameroon is the heart for commercial business interests. of the Central Africa region. The With an impressive and visionary country is also the region’s major development strategy, Cameroon is economic powerhouse, and the leading adcurrently playing a more proacvocate for addressing the region’s concerns tive role in leading the region’s in various international forums, especially initiatives to improve its infraon the issues of regional security and the structure and industrial base, and impact of global climate change. In addito strengthen the region’s agenda tion, Cameroon for economic also serves as the integration With an urgent sense of natural gateway and progress.

President Biya (center) inspecting agriculture production and the regional trade hub for its In 2010, Campurpose and a vigorous on the country’s shortfalls, challenges, five neighboring eroon was one and progress. countries in Cenof 17 African coundetermination to excel in tral Africa (Chad, tries that observed With Africa’s increasing influence in The Central their independence its endeavors, Cameroon geopolitical affairs and its strategic role African Repubanniversary, which in today’s global economy, Cameroon’s lic, Congo Brazwas a celebratory is by far the leading driver forward-looking initiative to evaluate its zaville, Gabon, occasion marking development track record was a timely and Equatorial a milestone in the of economic development and necessary endeavor—and an opporGuinea). continent’s historical to reassess, refine, and strengthen evolution, from forand progress in the Central mer colonial posses- tunity the country’s development model for the Cameroon is challenging years ahead. It was on this ocendowed with sions to some of the African region. casion that the head of state, President Paul an abundance of world’s fastest growBiya, addressed the country’s development natural resources ing developing and and a highly educated and skilled workemerging market economies. In celebrat- concerns, and unveiled the government’s force. Coupled with these assets, the couning its 50th Independence Anniversary in vision and strategy for moving Cameroon try is the region’s undisputed destination May 2010, it was both a time for celebra- forward to middle market status by the year 2035 (Cameroon Vision 2035). of choice for foreign direct investment and tion and a mandate for serious reflection

“

Special Supplement: Cameroon

Cameroon is on the Move After a half century of independence, each new day is the beginning of Cameroon’s future—a nation with a clear vision and strategy to move to the next level in the 21st century.

With the new Cameroon Vision 2035 development strategy in hand, over the past year the nation’s key stakeholders have enthusiastically and vigorously redoubled their commitment to moving this agenda forward in a timely and substantive manner. In order to bring these initiatives to successful fruition over the next 24 years, at the direction of President Biya, the principle government institutions have embarked on a broad-based and ambitious approach to accelerating the country’s progress in several key economic sectors within specific timelines.

Cameroon’s comprehensive development plan is driven and prioritized by a needs-based agenda with a renewed commitment to several primary sectors, including, but not limited to, improving the nation’s physical infrastructure; building and expanding the industrial base; strengthening the governance and capacity of public institutions; improving and transforming the nation’s business climate;

and enhancing the delivery of primary social services and tangible benefits to the country’s citizens. Although all of these sectors are being simultaneously addressed, the infrastructure and industrial development initiatives are on the front burner—as highlighted by a partial list of select programs and projects outlined in this brief, in no particular order of precedence.

Building and Improving Physical Infrastructure Delivering Power to the People Cameroon is currently challenged by an inadequate and inconsistent supply of electrical power, which has a critical and negative impact on the nation’s economic and industrial development agenda. The country’s current electrical power supply is estimated at 1,022 megawatts (MW), representing a 400 MW shortfall in its current demand for power. To address this deficit, the Cameroonian government has launched several projects to increase the nation’s production capacity and electrical output to 3,000 MW by the year 2020.

In the interest of managing its power and energy sector in the most cost effective and efficient manner, the government of Cameroon decided to privatize this sector to ensure that the best corporate practices were adapted and applied to this enterprise.

In June 1996, the government launched an intense search for a strategic partner with the financial resources, technical capacity, and international industry presence to assist the country with improving and modernizing its power sector. After a five-year search, Cameroon Electric Corporation selected AES Corporation, a US energy firm, as a strategic partner with SONEL, the government-owned power company.

Subsequently, this partnership became the Cameroon-based AES SONEL Corporation, which is currently the exclusive developer and supplier of electrical power in the country.

Leveraging the Region’s Hydropower Potential In order to meet the current and projected demand for electrical power in the industrial, commercial, and residential sectors, the initial priority for power infrastructure is focused on building a number of new dams that will capitalize on the region’s enormous

hydropower potential; especially since next to the Democratic Republic of Congo (DRC/ Congo), Cameroon is host to the second largest river basin network on the African continent. A partial list of these projects includes but is not limited to the following:

• The Nachtigal Power Plant. This is a spin-off of the Lom Pangar Dam Project, and is spearheaded by a Canadian firm, Rio Tinto Alcan—and involves building a hydroelectric plant with the capacity to generate 230-250 MW of electricity; and also contributing to an increase in the production capacity of the nearby Edea Aluminum Smelter Plant, from a production tonnage of 100,000 to 400,000 tons annually. This power facility is tentatively scheduled for completion between the 2016-2017 timeframe.

• The Lom Pangar Dam Project. This massive mega-project will increase the power supply in the Sanaga Basin region by 450 MW to 618 MW. The project will be supervised by the French engineering firm, Coyne et Bel• The Memve’ele lier. It will be Dam Project. developed on Construction an expedited of this hydropriority basis electric plant on with an expectthe Ntem River ed completion will increase the date within country’s power 38 months of supply by an adstart up, at an ditional 201 MW, estimated cost with a high-voltof 150 billion age transmission CFA francs. line linking the Building this site to Ebolowa Generating Power for the People facility will and the Capital also generCity of Yaounde. ate at least 1,000 direct jobs for the local An agreement was signed in September workforce. In addition, the project will also 2009 with a Chinese engineering firm for the increase and regulate the flow of the Sanaga development and construction of this facilRiver, enabling the development of the ity, at an estimated cost of 365 million CFA Nachtigal Dam which is expected to generfrancs, financed by the China EXIM Bank. ate an additional power output of 330 MW. Finally, there is a social corporate citizenship component to the Lom Pangar Dam Project, valued at 44 billion CFA francs, that requires the building of waste management systems, schools, and providing skills training for local labor. It will also result in other spin-off initiatives to develop and modernize the fish farming industry, agriculture, and several other private sector revenue generating enterprises in the region.

Exploiting Natural Gas Resources — Kribi Power Plant Project Currently, Cameroon depends on its hydropower to supply 95 percent of the nation’s electrical power needs. However, the country is also focused on diversifying this sector, and the Kribi Gas-fired power plant project will be the nation’s first venture to harness its natural gas resources. This plant is scheduled to be commissioned in 2013,

Special Supplement: Cameroon

and when fully operational it is expected to generate 216 MW of electricity, scalable to 330 MW. The plant will also be the largest natural gas power production facility on the African continent.

Valued at 13.64 billion CFA francs, financing for the Kribi plant was structured with the support of a loan from the World Bank, and partial risk guarantees from the International Finance Corporation (IFC); and it will offer local Cameroonian banks, for the first time, an opportunity to participate in a long-term financing venture in the country’s electricity sector. In addition, the IFC is coordinating the participation and support for this project from several other international institutions— including the African Development Bank, the European Investment Bank, the Central African Development Bank, the Netherlands Development Finance Company, and the French Promotion and Investment Company for Economic Cooperation.

The project will be supervised by the Kribi Power Development Corporation (KPDC); an organization established under a joint partnership between the government and the US-based AES Corporation. In addition, the gas-powered engines for the plant will be supplied and installed by Wärtsilä, a Finnish firm that is a global leader in providing decentralized power generation solutions.

The Kribi Power Plant will provide a reliable supply of electricity to an estimated 163,000 Cameroonian households or approximately 815,000 people, 50 percent of whom are women. In addition, 50 MW of the plant’s capacity will be directed to Alucam, a major aluminum smelter in the region. Natural gas for the plant will be supplied by the offshore Sanaga South gas field, the first gas field under development for commercial purposes in the country.

January 2912 3

Developing Transportation Infrastructure A New Maritime Project The Kribi Deepwater Sea Port Project

Construction of the Kribi Deepwater Sea Port represents one of Cameroon’s most progressive ventures in the region, and one of the largest transportation infrastructure mega-projects in Africa. President Biya officially kicked this project off in October 2010, with the first ship expected to roll into the port by 2014. The project is valued at 5 billion CFA francs, and will greatly enhance the country’s position as the leading gateway and international trade hub for the Central Africa region. The Port of Kribi will be capable of hosting 60,000to 300,000-ton ships, with 17-24 meters in draught, therefore greatly exceeding the capabilities of the Port of Douala, which is currently the region’s major port but has a limited capacity for hosting vessels with 6 to 7 meters in draught.

This futuristic port complex will ultimately cover 75 kilometers of the country’s coastline (from Kribi to Campo), and its facilities will serve as the region’s primary maritime and shipping gateway to the world. The port’s mixed-use container terminal will process approximately 400,000 containers per year, versus the current capabilities of the Port of Douala, which has a maximum capacity for hosting 250,000 containers per year.

The total capacity of the Kribi port facility will be capable of handling three to four million tons of cargo per year. As a side note, the aluminum terminal alone will process an additional two to three million tons of cargo annually, which will be managed by the Cameroon Petroleum Deposits Corporation and the Indian-based firm, Angeliue. In addition, the new port facility for shipping iron ore will be capable of handling about 3.5 billion tons of ore annually that will be brought into the facility by a new rail system from 500 kilometers away in Mbalam.

Once the Kribi port is fully operational, shipping time between Cameroon and Western Europe is expected to be less than 12 days, 25 days from China, and nine days to Brazil. The frequency of shipments will be greatly increased, the port will attract additional traffic in the region, and it will serve as the major transshipment hub in Central Africa. In addition, the Kribi port will drastically reduce container congestion and the timelines for processing cargo and transshipments in the region, especially to the country’s landlocked neighbors such as Chad and the Central African Republic.

The Port of Kribi will also stimulate other spin-off projects in a variety of cluster industries. For example, there is a new aluminum production facility in the pipeline to be built by Canada’s Rio Tinto Alcan Group, which will produce an estimated output of 400 tons of aluminum per year, with the potential to increase production to one million tons a year. Additional plans include the construction of a new liquefied natural gas plant that will be built by a French partnership between Société Nationale des Hydrocarbures (SNH) and Gaz de France.

Finally, the construction phase of this mega-project will generate over 40,000 jobs, including at least 20,000 full-time positions after the port becomes fully operational. In addition, the project is already spinning off a number of other infrastructure ventures, such as new roads, highways, and railway networks throughout the region.

Building Industries Limbe Oil Shipyard Industrial Development Project Although not directly associated with the Kribi Deepwater Sea Port Project, the Limbe Oil Shipyard Project is positioned to be a direct beneficiary of this venture. This facility will be constructed in Limbola, three kilometers from the seaside resort of Limbe, and developed by the Cameroon Shipyard and Industrial Engineering firm. The Limbe Shipyard’s primary objective is to provide quality maritime maintenance, logistical, and other support services for customers operating in offshore oil fields in the Gulf of Guinea.

Infrastructure for the Limbe Shipyard site is gradually taking form, such as the dock and floating platforms that have been operational since 2007. The project is also expected to generate a total of 3,000 new jobs in the region, as well as 2,000 indirect jobs; in addition to attracting additional foreign direct investments to Cameroon’s economy.

A major geopolitical consideration that initiated this project was the US concern regarding potential instability in the Persian Gulf, and the search for an alternative and more reliable source of oil to supply the nation’s energy needs. As the second largest supplier to the US, the oil producing countries in the Gulf of Guinea were a natural focus of this initiative—with an interest in increasing oil exports from the region to the US from 15 percent to 25 percent over the coming decades. It was this increasing US interest that served as a catalyst for new industry-related ventures in the region. And in 1998, Cameroon Shipyard and Industrial Engi4 January 2012

New Road Infrastructure Cameroon’s commendable initiatives to improve and expand its surface transportation infrastructure is in full swing, and the development and construction of new road networks and highways throughout the country and the region is moving forward at a rapid pace—as emphasized by the following projects.

The Wouri Bridge Project-Douala This long-awaited project to build a new bridge over the Wouri River is being hailed as a venture that will greatly improve the transportation infrastructure of the City of Douala, the nation’s principle commercial capital. A bridge was originally constructed over the Wouri River in 1954, but over the years it has exceeded its capacity to handle the current traffic congestion, resulting in serous safety concerns that the bridge has reached its saturation point. This second bridge is expected to greatly improve the city’s commercial activity and enhance its position as a competitive economic and regional trade hub.

In short, building a second bridge over the Wouri River will improve traffic flow and safety, provide road and rail access to the region’s industrial zones, and extend the transportation supply chain to Cameroon’s interior and to the to surrounding countries in the sub-region. Approximately 850 meters in length, the bride will have five lanes for automobiles and two railway lanes, and will be completely integrated into a new road network. This project is expected to generate hundreds of new jobs in the region of Douala, and has a price tag of 100 billion CFA francs. It will be jointly funded and sponsored by the French Development Agency and the government of Cameroon.

The Yaounde-Douala Highway Project The timely Yaounde-Douala Highway Project is long overdue, providing a reliable and modern connection between Cameroon’s political and commercial capitals have been a pipe dream for decades. The highway’s transportation network will also include the city of Bafoussam, providing more efficient ground transportation between the country’s three largest cities—as well as serving as a major boost to the nation’s international trade and regional supply chain infrastructure.

The government has already confirmed a preliminary agreement with a Chinese firm to begin the first phase of the Yaounde-Douala Highway, which will be a 70 km two-lane road stretching from Yaounde to Douala. The total distance of the new highway will cover 250 km and is expected to cost 400 to 500 CFA francs. This new highway will provide a welcome relief to the heavy and congested traffic conditions between these two major cities, greatly improving safety conditions for the movement of travelers and goods.

The Nigeria-Cameroon Highway Project Committed to increasing and improving trade opportunities with neighboring countries throughout region, the Nigeria-Cameroon Highway initiative is being promoted as a multinational transport facilitation project. The highway project will provide a 433 km corridor and modern road connection between Bamenda in northwest Cameroon, to Enugu in eastern Nigeria. Construction work on this project began in June 2010, and is scheduled for completion in 2013. It is anticipated that this highway will enhance cooperation and increase trade between the two countries—in addition to facilitating increased regional trade and economic integration between the two major trade blocks in the region, the Economic Community of Central African States (ECCAS) and the Economic Community of West African States (ECOWAS).

The Nigeria-Cameroon Highway Project is jointly funded by equal contributions from Nigeria and Cameroon; with substantial support from the African Development Bank, the World Bank, and the Japanese International Cooperation Agency. At a cost of US $500 million, this project is also an integral phase of the ongoing initiatives across the continent to build the Trans-African Highway network. In addition to connecting with Cameroon, the Nigerian arm of this project will eventually cross the continent and connect Lagos, Nigeria, with Mombassa, Kenya. This has been a long-standing ambition on the continent since the early 1980s—to build a series of road networks in Africa from west to east, and from Cairo to Cape Town. neering immediately seized upon an opportunity to provide various maritime related services to an expanding customer base, i.e., rehabilitating oil rigs, oil platform maintenance, and shipyard services for vessels and other equipment-related issues to the offshore oil industry.

Because of the scale, reach, and projected capabilities of this venture, the Limbe Oil Shipyard Project is being hailed as Cameroon’s second largest infrastructure project—the first being the Chad-Cameroon Oil Pipeline project. The Limbe project was initially launched in 2005 with funding support from the African Development Bank, the Islamic Development Bank, and the Central African Development Bank; with significant participation from the Danish, British, German, and Cameroonian governments, among others.

Special Supplement: Cameroon