Local legislations regulating investment are in strict accord with I.M.F. prescriptions and are designed to fight the economic crisis. This strict adherence to these prescriptions is to ensure that these legislations conform to what can be termed the "good economic Politics of Bretton woods ".
PRIVATIZATION OF STATE OWNED CORPORATIONS AS PART OF THE STRUCTURAL ADJUSTMENT PLAN.
Privatization of state owned corporations is one of the measures undertaken by the Cameroon Government to fight the economic crisis. Privatization has been envisaged for the following state owned corporations. CAMEROON SHIPPING LINES (CAMSHIP), CAMEROON SUGAR COMPANY (CAMSUCO), CAMEROON DEVELOPMENT CORPORATION (C.D. C.), CAMEROON AIRLINES (CAMAIR), NATIONAL R,4ILWAYS CORPORATION (REGIFERCAM) CAMEROON COTTON PRODUCTION COMPANY (SODECOTON) NATIONAL WATER CORPORATION (SNEC)AND CAMEROON RUBBER CORORATION (HEVECAM).
As far as the privatization of HEVECAM is concerned, 50 % of its shares have been offered to foreign investors, 30% to local investors and 20% to the Cameroon Government. Bidders have until 31 January 1996 to propose their bids.
THE 1995/96 FINANCE LAW
The 1995/96 Finance law of Cameroon places the income/expenditure (Budget) at 682 Billions FCFA (34 Billions FF), an increase of 102 Billions FCFA against that of 1994/95 which stood at 580 Billions FrancsCFA. The turn over revenue also increased from 1 7,5 % to 18,7%. Income from direct and indirect taxes makes up more than 80 % of the budget. This income is to be realised mostly from forestry, custom duties and export products such as coffee, cocoa, medicinal plants, timber, banana, cotton and oil.
INVESTMENT IN CAMEROON (ORDINANCE No 90/7 OF 8 NOVEMBER 1990)
The basic regulatory framework of Investment in Cameroon is ordinance No 90/7 of 8 November 1990 as rectified by Law No 90/071 of 19 December 1990.
The purpose of this ordinance is to encourage and promote productive investment in Cameroon.
It also aims at encouraging the creation and development of economic activities that are geared towards the :
- Valorization of Cameroon's natural resources as a priority.
- Creation of new jobs.
- Production of competitive goods and services for local consumption and for export.
- Increase in exports of manufactured products.
- Transfer and adoption of appropriate technologies.
- Protection of the environment and ;
- Improvement of the quality of life in urban and rural areas.
INVESTORS' RIGHTS AND BENEFITS
All natural persons or corporate bodies of Cameroon or foreign nationality may, irrespective of their area of residence undertake and engage individually or in partnership in an economic activity in Cameroon and to enjoy full protection under Cameroon law.
All natural persons and or corporate bodies of foreign nationality shall enjoy the same rights as those granted to Cameroon natural persons or corporate bodies and to enjoy the various rights governing property ownership, concessions and administrative authorizations.
No expropriation, nationalization or requisition of a duly established enterprise or of its property shall be carried out without the state first initiating the procedure to declare such expropriation, nationalization or requisition as being in the public interest and without prior compensation that is just, equitable and based on a proper valuation of the enterprise or of its property by an independent third party.
All natural persons or corporate bodies can enter into and execute any contract that they consider to be in their interest especially as concerns financial and commercial matters, determine their production, distribution and marketing policies, and in general take any management decisions that are in accordance with trade rules and practices in Cameroon.
All natural persons or corporate bodies duly set up in Cameroon to carry out an economic activity shall have the freedom to recruit and dismiss staff in compliance with the labour legislation in force.
The state shall guarantee the entry into, residence in, freedom of movement in and exit from the national territory of all investors who are natural persons or corporate bodies duly established in Cameroon, their partners and managers and expatriate personnel with duly approved contracts of employment as well as members of their legitimate families.
The state shall also guarantee to all natural persons or corporate bodies not resident in Cameroon the free transfer of proceeds of all kinds from their invested capital and, where their activities cease, the income from the liquidation or transfer of their investments, on condition that they have paid all their taxes.
Further, the state shall in accordance with the laws and regulations governing banking and exchange operations guarantee the right to freely transfer out of Cameroon funds representing normal and current payments for supplies and services effectively provided, particularly in the form of royalties or other remunerations.
PROMOTION OF EXPORT
Enterprises regularly established in Cameroon whose finished or semi-finished products are processed in Cameroon shall be exempted from export duties, insurance and transportation charges in respect of such products meant for export.
Enterprises regularly established in Cameroon which export all or part of their industrial products shall be granted export incentives in the form of a deduction from their taxable income of an amount that cannot be carried forward, the amount so deducted shall be equal to 5 % of the F. 0. B. value of the exports of their finished or semi-finished products.
ESTABLISHMENT AND FIELD OF APPLICATION
Investors can carry out economic activities in one of the following areas:
- Processing of raw materials resulting in the production of finished and semi-finished goods.
- Extraction and processing of mineral resources.
- Processing of hydrocarbons.
- Forest exploitation along with timber processing.
- Agricultural and agro-industrial production.
- Clothing industry.
- Livestock farming.
- Industrial and small scale fishing.
- Processing of agricultural, animal and fish products.
- Storage and conservation of food products.
- Manufacture of materials for the building industry and public works.
- Construction of buildings and realization of public works.
- Maintenance of industrial equipment with emphasis on the manufacture of spare parts.
- Repair of ships.
- Technological research and data management.
- Hospitals and clinical analysis laboratories.
- Testing, analysis and control laboratories of raw materials, finished or semi-finished products used or produced by the industry.
APPLICATIONS FOR GRANT OF RIGHT TO INVEST
Investors wishing to carry out an economic activity in one of the areas indicated above have to apply to the administration for approval.
Applications must comprise :
- The names and nationality of natural persons or corporate bodies.
- Name and articles of Association of the enterprise.
- The location of the enterprise.
- The material and financial investment programme proposed by the enterprise.
- The employment and vocational training policy of the enterprise.
- The objectives set out in the investment programme.
PENALTIES AND SETTLEMENT OF DISPUTES
Penalties ranging from fines to withdrawal of approval shall be meted against enterprises that fail to comply with the local legislations governing investment.
Enterprises which fail to have its facilities inspected and controlled by the ad hoc approved government employees or submit their annual report for inspection shall also be penalized.
Non payment of fines may entail the suspension of the approved enterprises and where such offence is repeated, the cancellation of all part of the benefits granted by the approval document. Approved enterprises may refer their individual or collective disputes to the competent law court in Cameroon and to the International Chambers of Commerce in respect of international disputes.
Any enterprise which shall deem itself the subject of administrative excesses may after exhausting the amicable conciliation procedure, appeal to the administrative bench of the Supreme Court.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
For further information contact Mr Nico Halle, Tel: (237) 42 64 79 or Fax: (237) 43 26 34; or enter a text search on "Nico Halle Law Firm" and "Mondaq Business Briefing".
