Economic overview
Cameroon is the seventeenth African state in terms of population (about 26.6 million inhabitants), the eighth for GDP per capita at current prices (1,574 USD, 2020 estimates, Economist Intelligence Unit and worldpopulationreview.com) and the fourteenth producer of crude oil in Africa (on average 72,000 barrels per day). The economy has some important aspects, including the diversification of agricultural products, forest resources (over 18 million hectares) and the traditional, albeit decreasing, supply of oil (the discovery of the first fields dates back to 1977).
In 2021, the estimated growth of real GDP in Cameroon is 2.5%. However, this is an interesting result, especially if we take into account the reduction in revenues, due to the decline in oil exports and the increase in military spending, necessary for the ongoing fight against terrorism against the Boko Haram sect in the Far East. North and the conflict in the two English-speaking regions against the secessionists. Without forgetting the Covid-19 pandemic which, despite not having caused the dramatic effects seen in the rest of the world, has hit the economy hard.
In the coming years, the attention of the International Monetary Fund will be focused on the debt trend, which stood at 45.2% in 2020 (source IMF: Perpectives économiques régionales Afrique Subsaharienne April 2020), against investment expenses, financed with loans guaranteed by the state, provided for the implementation of the urgency plan and infrastructure development plans linked to the African Cup of Nations.
Main sectors of industry
Agriculture, livestock farming, fishing and forests play a fundamental role in Cameroon, contributing 21.7% to the formation of the GDP, with a sector employing 53% of the active population. Most of these are small crops, while 10% are plantations on an industrial scale. The five main export crops are coffee, cocoa, cotton, bananas and rubber.
Cameroon is considered a miniature Africa due to the variety of climatic conditions and crops. It is an 80% self-sufficient country for the production of most agricultural commodities. The shortcomings are identified in the processing activity both for exported products and for those destined for the local market. The objective of the Government, therefore, is to promote an extension of the value chain by aiming in two directions: the attraction of foreign and multinational investors in the sector, with different benefits, especially in the tax field and the contextual development of activities in the area with a program called “Agropoles ”, Which provides for both financial contributions and specific interventions to support local operators for the construction of rural roads, irrigation systems, purchase of seeds, purchase of agricultural equipment.
The sectors characterized by the greatest growth are the tertiary sector and agriculture, with the industrial sector partially held back by the slowdowns of some important construction sites. Inflation, equal to 2.8%, is below the regional threshold of 3%.
Cameroon currently produces 70,000 tons per year of primary aluminum in a foundry located in Edea. The main bottleneck for an expansion of production is currently represented by the limited availability of energy. To unblock the situation, the possible construction of a 400 Megawatt hydroelectric project in Natchigal, on the Sanaga River with a transport line of 50 kilometers at 250 kilovolts, is being evaluated.
The most significant finding, however, was made in the Adamawa region. The reserves in this case are substantial: about 554 million tons. It is expected to be able to extract 7.5 million tons per year and to start a 3.5 million tons bauxite refinery per year.
In perspective, Cameroon could also become an important producer of iron ore thanks to two large deposits, located respectively in Dioum in the south of the country and in Mbalam-Nabeba on the border with Congo Brazzaville. The first contains reserves valued at 703 million tons and the second at 436 million. For the Mbalam-Nabeba field, which could result in an annual production of 35 million tons, a railway of more than 500 kilometers is being studied that would allow to bring the ore mined in Cameroon and Congo to the new Cameroonian port of Kribi where they will be able to dock ships up to 300,000 gross tonnage.
Taxation for businesses in Cameroon
For the principle of territoriality, IS affects the income of companies that carry out an economic activity in Cameroon or those income that are attributable to the company under an international convention against double taxation.
The tax base
The determination takes place with the same rules provided for the determination of business income with the analytical method.
The following costs are deductible:
- depreciation (only those on a straight-line basis),
- losses,
- provisions for specific losses or charges (excluding those for foreign exchange losses),
- currency and credit conversion scraps,
- interest expense for current account loans by shareholders,
- salaries of employees,
- contributions paid to pension and / or sickness funds,
- insurance premiums for staff sickness,
- rental costs,
- donations within the limit of 0.5% of the turnover,
- headquarters costs for branches,
- professional taxes such as the contribution on operating licenses.
- The rates, payments and declaration
The corporate tax rate is single, currently equal to 38.5% (35% plus 3.5% by way of CAC).
The tax payable cannot be less than a minimum, established at 1.1% of the turnover, and is paid monthly (by the 15th of the month) through advances representing 1.1% of the turnover. previous month’s business.
The balance is paid by 15 March of the year following the end of the financial year and equal to 38.5% of the taxable income less monthly advances and withholding taxes (for example on capital gains).
The annual declaration must be submitted by March 31st.
Investing in Cameroon
There are at least 10 good reasons to do it:
Tax exemption for 5/10 years
Strategic position in Central Africa
potential market of over 600,000 people
Duty exemption in the CEMAC area
The population of Cameroon has gone from 7 to 24 million
The Banking System developed and relies on international banks
Investment-friendly legislation
Excellent relations between Italy and Cameroon
Excellent cultural level and study of the staff
Unlike other countries, Cameroon has enjoyed a climate of peace for over 40 years