5 kinds of businesses to avoid in Cameroon if you live abroad
Cameroon presents a complex landscape for foreign investment, characterized by unique challenges and risks. For individuals considering starting a business in the country, it is crucial to be aware of sectors that may pose significant difficulties. Here are five types of businesses that one should generally avoid when living abroad in Cameroon. Certain businesses can cause spikes in your blood pressure if you try to run them while you are 10,000 kilometers away. Here are five that top our list.
1. Import-Dependent Businesses
Starting a business that heavily relies on imports can be problematic due to potential import bans and high tariffs. The Cameroonian government has been known to suspend the importation of numerous products across various sectors, including cosmetics, industrial packaging, and food items[3]. This unpredictability can lead to supply chain disruptions and increased costs.
2. Businesses in Corruption-Prone Sectors
Corruption remains a significant issue in Cameroon, with the country ranking low on Transparency International’s Corruption Perception Index[2]. Sectors such as public services, customs, and judiciary are particularly vulnerable. Engaging in businesses that require extensive interaction with these areas can expose diaspora or foreign investors to increased operational risks.
3. High-Risk Security Businesses
Due to ongoing security challenges, including kidnappings for ransom and violent crime, businesses in high-risk sectors such as security services should be approached with caution[4]. The risk is notably elevated in regions like the Far North and South-West, where armed groups are active. Establishing a business in these areas could jeopardize both personnel safety and business viability.
4. Poultry Business
Poultry farming can be a lucrative venture, but it also comes with several disadvantages that potential farmers should carefully consider. First, poultry farms are highly susceptible to various infectious diseases, such as avian influenza, Newcastle disease, and salmonellosis. These outbreaks can spread rapidly among flocks, leading to significant financial losses and requiring stringent biosecurity measures to control them. Second, Starting a poultry business often requires a significant initial investment for infrastructure, equipment, and livestock. For large-scale operations, the costs can be substantial, potentially reaching 6-figure dollar expenses upfront. Third, a successful poultry operation requires supervision by a very competent and experienced farmer. The problem is, the good ones are extremely hard to come by nowadays, and when you find one who is honest, you’ll have to pay a premium to keep him to yourself.
5. Resource Extraction Industries
While the resource extraction sector (such as mining and oil) can be lucrative, it is fraught with challenges related to environmental concerns and community relations. Many multinational corporations have faced backlash for their operations in Cameroon due to human rights violations and environmental degradation[6]. Entering this sector without a thorough understanding of local dynamics can lead to reputational damage and legal issues.
Conclusion
In summary, while Cameroon offers opportunities for investment, certain sectors pose significant risks that foreign entrepreneurs should carefully consider before proceeding. By avoiding import-dependent businesses, corruption-prone sectors, high-risk security ventures, bureaucratically intensive operations, and contentious resource extraction industries, investors can better navigate the complexities of doing business in Cameroon.
Citations:
[1] https://scholar.smu.edu/cgi/viewcontent.cgi?article=3637&context=til
[2] https://www.gov.uk/government/publications/cameroon-overseas-business-risk/cameroon-overseas-business-risks
[3] https://www.africanews.com/2019/08/15/cameroon-to-potentially-ban-50-import-products-business-africa/
[4] https://travel.gc.ca/destinations/cameroon
[5] https://kinsmenadvocates.com/business-law/how-to-own-100-of-a-company-in-cameroon-as-a-foreigner/
[6] https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4588875
[7] https://core.ac.uk/download/pdf/216913016.pdf
[8] https://www.youtube.com/watch?v=ek_R9jjjqJM
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