Improvements in legal and regulatory constraints to private sector development (country case study: Cameroon)

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UNITED NAll0NS ECONOMIC COMMISSION FOR AFRICA

IMPROVEMENTS IN LEGAL AND REGULATORY CONSTRAINTS TO PRIVATE SECTOR DEVELOPMENT

(COUNTRY CASE STUDY: CAMEROON)

DEVELOPMENT

MANAGEMENT

SERIES No.5

AUGUST 1994

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.CONTENTS

-vPage

FOREWORD ~ _-. : ~ _~-: 1

EXECUTIVE SUMMARY 5

CHAPTER ONE -Thestructure of the political

economyofCameroon , 9

1.1Introduction 9

1.2Macro-economic development survey 11

1.3Manufacturing sector 15

1.4Public enterprise '" 16

1.5 Private sector 21

CHAPTER TWO - Periscoping economic development

strategiesand evolutionof industrialpolicy 25 2.1Public enterprisesand private sector development 25

2.2 Planningfor development 30

2.3 The master plan for Industrialization 33

2.4 Privatizationprocess 38

CHAPTER THREE -Legalandregulatory mechanisms

and constraints 47

3.1Introduction 47

3.2Domestic regulatoryInstrument 49

3.3Investmentcode 51

3.4Externally imposed regulatory measures 52

3.5 Constraints 53

CHAPTER

FOUR-Conclusions and recommendations 58

4.1Conclusions 58

4.2Recommendations 63

Page .TABLES

,Table 1Share in manufacturing turnover. registered

enterprises by branch, 1980-and 1986 17 Table 2Foreign investment capital and ownership.

structureofmanufacturing enterprises ~ - ; 18

REFERENCES ANDNOTES · '~..•;66

FOREWORD

Private sector development in African countries has been con- strained by several country-specific endogenous and exogenous factors. Apart from the litany of political instability, civit strife and natural disasters, legal and regulatory constraints can be considered as significant factors in the underdevelopment of the private sector.

Removal of the impingIng factors would enhance the deveJopment

and contribution ofthe

private sector to national development and to regional cooperation and integration.

The development and strengtheningof the private sector should beseenin the context of strategic measureswhich African countries are undertaking to speed up social and economic recovery and development during the closing years of the 1990sand the ensuing years of the21st century. Each country would approach problems of improvements in legal and regulatory constraints based on the specificity of its own situation. Nonetheless. an integrated approach to the strengtheningand developmentofthe private sector should be considered appropriate for all countries. In this regard,it can be argued that, In a free market economy, possibilities exist for the pursuance of private sector activities in all sectors of the economy;

there should be no contradiction between the development of the privatesectorandthatof humanbeings and the naturalenvironment;

improved. efficient' and,,-effective govemment intervention may be required to correct-arty abuses engendered by competition which is Inherent in private sector activities: and empirical investigation Is requiredto Improvepolicy formulatioh and implementationregarding theoperationsand performanceof private--sector enterprises in Africa.

The Economic Commission for Africa (ECA) has undertaken several studies and published the-findfngs and recommendations which have a direct bearing on the development and strengthening

of

the private sector InAfrica.

These studies

and publications include

the

follOWing:

''"!'~- _ _. " ""9:: "'lo -~_-

a. The study and publicatlon tldeveloping' and strengthening . credit and' capital markets for private

sectordevelopmenr'

underscores the importance of credit and capital marketsand their roleIn private sector development. It recommends action that should be taken to speed up the establishment ofthese markets

at

the national, sUb-regional and regional levels in order to facilitate financial intermediation and the sustainable development of the private sector;

b. Developing entrepreneurial capacity. in public and private sec- tor enterprises is one ofthe 'top priority items on the develop- ment agenda of African countries. This study and publlcatlon contains, among other things. practical insights and policy measures for overcoming the constraints and strengthening entrepreneurial capacity to enhance public and private sector development.

c. Other publications emerged from conferences and seminars at which constraints were discussed and proposals made for resolving them in order to enhance the development of the private sector.

The above-cited studies and publicationsreaffirmECA's support to national and regional efforts of African countries in the field of private sector development. Systematic and comprehensive studies on the performance ofthe private sector in Africa have

yet

^{to be}

undertaken. In this regard, this study, reflecting on the concrete experienceofthe Republic of Cameroon as related to improvements in legal and regulatory constraints to private sector development, is both timely and relevant. The Cameroon case study is.In the context ofECA Initiatives to strengthen the contribution of the private sector to the sustainable development of African economies.

The consultant for the Cameroon case study reviews the status of private sector development in a country with a chequered POlitical- economic history and now confronted with a challenging future. The

key

areas addressed include the macro-economic parameters and development strategies of Cameroon; current status and overall constraints to private sector development; analysis of legal and regulatory constraints and their impact on private sector develop- ment. Based on the findings and analysis ofthe issues, recommen- dations are made to overcome legal and regulatory constraints In order to improve and strengthen private sectordevel~pment.

The macro.-economlc analysis indicates that Cameroon is en- dowedwithnatural resources. These resources Include abundant rainfall and agricultural products such as cocoa. coffee.tea, palm oil.

bananas. and several varieties of foodstuffs. The country also has

minerals

resources including hydrocarbons (petroleum and gas).

bauxiteand gold. Free enterprise hasgenerallybeenaccepted asthe framework for social and economic development policies and strategies.

The findingsof the case study suggestthat government participa- tion in development through public enterprises was predicatedby the polley approachwhich hitherto assumed that change and growth will only come the way of Cameroon through-government interventionIn the development process. However. over the years, it has been recognizedthat public policy on direct government participation through public enterprises has not led to the expected sustainable developmentgoals of the population.

ThefaUure of the public sectorto attain the expected objectives of sustainable development has, more or less, impelledthe government to rethink about its development policy. A major policy redirectIon in this regardentailsthe rationalisation of the public sector. This Involves restructurallzation, liquichltion and privatizationof public enterprises.

Legal and regulatorymeasures have been put in place to operatlon-

allZe

rationalisation processes.

The case study makes the point that the private sector has been a neglectedarea; and that the government has consciously enacted regulations impeding the developmentofthe sector: It could, how- eve,. be argued also that whereasthe legal and regulatory measures

~do not frustrate the success of the private sector, those who arechargedwith responsibility for implementation tend to convert the measures into constraintsto development.

Theconsultantfurther makesthe point that the developmentofthe private sector Is particularly sensitive to political uncertainty. It is - recommended, inter alia.

that

the government has to go beyond the present public

policy

reforms by cUrbing mismanagement and the lack of accountabilityby public officialsand the businesscommunity.

The government should also create an enabling private sector en- vironment through concerted and comprehensive policy and

strategy. .Monopoly power should be, curbed. Favourable mechanismshould be establishedfor the availability of money and credit on easy terms and women shouldbemotivated and giventhe incentivesto venture Into private enterprises on a grand scale. The concfusion is that both economic andpoliticalliberalization must take place ifthe1lrivate sectortsto contributeto the Industrialdevelopment of Cameroon.

Thestrengthening of the role oftheprivatesectorinthesustainable development of African countries Is an ongoing process. ECA's studiestodate have sharpened and broadened an,understanding of problems that impede the speedydevelopment of the

private

sector.

This study furtherunderscores theImplications,oflegaland regulatory constraints; including recommendationsonwhatshould bedone to overcome the constraints. ECA welcomes suggestions and new ideas on the enhancement of the role"ofthe private sector in develop- ment. For instance, studies and publications on the performance of the private sector are envisaged. Pleaseaddress correspondence on various aspects of private sector development in Africa to:

Sadig Rasheed .Director

Public Administration. Human Resources and Social Development Division- (PHSD)

United Nations Economic CommIssion for Africa (UNECA) P.O. Box 3001

AddisAbaba Ethiopia

Facsimile251-1·51 4416 Tel. 251-1-51 1056:,

Executive Summary

This study reviews the state ofthe artofprivate sector develop- ment In Cameroon, a country with a chequered eco-politlcal historical development and now confrontedwith

a

challenging future.

The key areas addressed Inetude, amongst others:

• macro-economic survey and the development strategies of the country;

• current status and overall constraints to private sector development;

• analyses of the legal and regulatory constraints and their impact on private sector development; and

• recommendations to overcome legal and regulatory constraints in order to improve and strengthen private

sector development in Cameroon. .

The socia-economic transformation of Cameroon has evolved under the philosophical orientation of planned liberalism, self-reliant development, balanced development and social justice through the contoursofFive YearsDevelopment Plans, six of which have been articulated and aggregated. Different facets of an investment code have been articulated to attract Investment both in the pUbfic and private sector. The PresidentialPublicEnterprise Rehabilitation Com- mission developed anambitious master plan forprivatizationthathas only thrown boththepublic and private sectors lnto great confusion.

evenin the wake ofIMFlWoridBank imposedstructural adjustment policies.

It hashitherto been commonly argued that. change and growth will only come thewayof Cameroon through government intervention inthe development process. This policy approach led to intensified governmentparticipationthroughpublic enterprises. However. over the years, it has been recognized and acknowledged that the ap- proach has not rendered the required results. A major policy ap- proach in this direction has been the move to reconstitute the public sector

by

either

restructuallzatton,

liquidation or privatization proces-

ses.

Legal and regulatory measures have been enacted to this effect

with

varying results. It should also be:noted that the private sector has been a neglected area; and that the government has consciously enacted regulations impeding the development of this sector. This attitude leaves a cloud of "confidence crisis" over government's policy which restricts private enterprises from investing in

a

^{climate of}

political uncertainty.

The government has to go far beyond the present public

retorms policy by

cUrbing mismanagement

and corruption

and to create an enabling private sector environment through a concerted and com- prehensive policy strategy of bUilding private sector confidence, restructuring monopoly power, creating favourable mechanism for the availability of credits and reform, encouraging the female gender venture into private enterprises amongst others In order to obtain positive investment responses from both domestic and foreign inves- tors.

The organization of this paper takes the following structure. Chap- ter one focuses on the structure of the political economy of Cameroon; Chapter two addresses the issues of economic develop- ment strategies; and Chapter three treats legal and regulatory mechanisms. while Chapter four attempts to draw the findings of the three parts and offers recommendations. Within this framework, the paper surveys the country's experiences in industrialization and private sector reform and assesses the progress or non-progress made. To the extent that conclusion about llright" and 'wronq"

strategies can be reasonably drawn, some guidance is offered with the caveat for a change.

.' The conclusion is that both economic and political liberalization must take place ifthe private sector is to contribute significantly to Cameroon's goal to

join

the club of industrial nations. .

CHAPTER ONE

The Structure of the Political Economy of Cameroon

1.1 Introduction

Cameroon has a landmass of 475.440 square kilometres and a population ofapproximately 12 million people with one ofAfrica's most diversified economies. TheGNPis lessthanUS$1000. It is the worlds's fifth largest exporterofcocoa as well as a major exporter of other cash crops like coffee. bananas, cotton, palm oil, rubber and timber. Cameroon has been exporting oil since the mid 19705. Other' mineral reserves include bauxite.iron'are, natural gas. The country is considerably rich in hydro-electric power potential since inde- pendence and unification In 1960-61. The political system has fluc- tuated from multi to single andmulti-party system in 1991. It has moved from a federal to unitary system of government and the institutions of government remain weak and captive

by

an authoritarian presidency. Over-centralization remains the

key

at- tributes of -the regime, with a weak private sector, more or less controUed bygovernment.

Capital flight hasincreased dramatically

Inthe last several years.

The country's potential natural resources'andwealth obscure grow- Ing disparities·and pockets of extreme 'poverty, particular1y in the northern hlnter1ands. Moreove~ the high pocketsof illiteracy, mor- bidity and malnutrition were those of a much poor country, and bespoke inadequate attention to these problems.

The main characteristics of the country's population show the

following trends: .

• by age, the population Is characterized by a predominance of the youths as reflected by the age pyramid of which 46%

of the population is under 15 years; - ' , '.-'by sex, there is predominance of the female gender (51%);

• wide disparities in _dens~: the least populated provinces hardly exceed

10

m/km ,(East, South and

Adamawa).

those averagely populated fluctuated between 15 and 4Om/km² (North, Centre. South.West) and' those considered to be of high density having between 60 and 100m/km²(for North, littoral. North·West and West);

• accelerated de-ruralization and rapid urbanizationfrom 28%

in 1976 and 39% in 1987. the rate of urbanization attained almost 42% in 1992. The economic measures adopted by the government in the past two

years,

two salary cuts.

devaluation and price increases, has further triggered a massive influx of people from the rural to urban centres.

According to a UNDP report (1993) there are about 65 towns with more than 10,000 inhabitants and 8 towns with more than 100,000 inhabitants.

The structure of the country's economy defines the essential features of its central problems of public and private sector under- development. As such. the development problems of Cameroon run deep, implying that the country ls in serious crisis 'with a large and un-diversified subsistence sector; coupled with a rapidly expanding population; backed.

by.weak

i.~~tituUonal structures and

under-

developed

human

resource

capacities or

^human

^resources

^potential

not appropriately deployed in the socio-econornlc transformation process. It is a country with great potentialinits human and physicaf resources; yetit remains poor and under-developed in the midst of

plenty. Why? ,

In addition, the country suffers from relatively inflexible and ollgopolistic

markets:

and from an inefficient public sectorthat con- trols and dominates the majority of productive enterprises. The major problems of mass poverty. weak productive base and rudimentary

technology that plagues the country constituent basic bottle-necks arising from the structures of production. consumptlon, employment and socia-political organizations. It is difficult to advance solutions . to such deep-rooted problems withouta structural analysis of the political economicof the country and of its linkages to the global

environment. .

The origin of the on going crisis maybetraced back a decadeago to1985/86during whichthe positivetrend registered in the economic growthofthe countrywas completelyreversed. Essentially the crisis was supportedbypoor management, decline. on the world marketfor major exports(oil, coffee and cocoa) thereby generating a decline in the country's terms of trade by nearly45%over the last three years.

The depreciation of the US$by nearly40%vis-a-vis the CFAFrancs, the currency forwhichexport products are denominated, led to a sharp fall in the value of exported goods and services with adverse repercussions on government revenue and households and enterprise earnings. (Republic of Cameroon (1989) statement of Development strategyand EconomicRecovery. May1989,Yaourlde- Cameroon).

1.2 Macro-Economic Development Survey

An analysis oftheevolution of economicaggregates startingfrom the early years of Independence shows

a

relatively high

annual

economic growth rateof6.1%between1964and1969 wh1chslowed downto a rateof3.3% in 1969to1973. By 1975thegrowthrate in realterms was3%causedby adownwardtrendinthe priceofcoffee, cocoa and other commodities. Between1975and1976,both cocoa and coffee prices had an upward price trend (see AfricaGuide1977, London).

Analytically,the ^evolutionofeconomic aggregates, starting from 1970nl,reveals that the country wasunable to fully availitselfof

the

surpluswealthgeneratedbyoil exports,asfrom the 1977/78 financial year to create conditions and_I~y'the'structural foundation for sus- tained development capable o'-·withstanding, for longer period, the seriousexternal shocksthatwere·feft asfrom1985/86 andsincethen.

Theoverall magnitUde ofthe crisison-the macro-economic aggregate

led

toareductioningovernment expenditure.

Asa

resultof the

poor

performances of oil, building and public sectors gross domestic

--~ ~" - -'= -

product in 1977/88, for example:·fell by more than 11% in real terms from Its level in 1985/86. The decline in economic activity has.slnca continued with a sharp contradiction In all sectors of the economy

Gross domestic productin1988/89 fell by 5% due mainly-to a sharp drop in industrial production and as a result of continued reduction ininvestmentexpenditure and oil productIon. The sharp reduction In public investment 42% and consumption 7%expendituresconsistent with an unci early defined budgetary discipline and control, as well

as a

fallin private e:Kpenditures resulting from the decrease in economic activities has contributed to

a

drop in overall domestic demand.

~linein economic activities has serious impact on public financ- ing. - For almost

a

decade, there has been a steady decline in the budget deficit ofthestate.

The state bUdget deficit increased from 49.2thousand million france,CFA in 1985/86 to 505.8 thousands million francs CFA in 1986/87 representing about 1.2%and 12.9% of Gross Domestic Product respectively. Following the austerity measures adopted in

'1987/88by: '

• withdrawal of state deposits from local banks: and

• thepartial repatriation of external reserves made it possible to reducethe budgetary deficit to relatively low levels: 5.9%

in1987/88; 4.8%in1988/89; 7.9%in1990/1991 and6.6%in 1991/1992 of Gross Domestic Product.

However, the relative poor performance in tax collection diminished state resources from year to year and obliged the govern- ment to accumulate arrears of internal and external payments.

(UNDP,1993) Republic of Cameroon Human Resource Development Yaounde-Cameroon. . .

The impact of the crisis extends to the monetary and banking sector. The deterioration of the financial situation of 150 public enterprises In spite of the substantial subsidies granted to ensure their survival, necessitated sizeable withdraws from their deposits In local banks. At the same time. financial difficulties of the government led to a substantial decline in foreign reserves.

These inter-related factors compounded the banking system's liquidity crisis. During the past six years over five banks. (see John W. Forje, 1990) NewApproaches to Industrialization in Africa: Aexible Manufacturing Technologies In Cameroon • where we stand-where are we going? Proceeding of a Seminaron Flexible Manufacturing -Technologies: An Alternative Industrialization Path. Policy Research

and Strategic Planning Institute.

Accra-Ghana,

p. 164).

Further more, the liquidity problems of the banking system has been aggravated by:

• Massive transfer by foreign enterprises operating in the country, backed also by individual transfer 'to personal accountsabroad.

• Theincreasing amount of bad debts amountingto over 500 billion CFAfrancs.

• Theabsence of an appropriatemechanism for recyclingthe savings generated by non-banking financial institutions through theinformal domesticbanking-system(Njagisand tontines).

As a resultofthe lack of liquidity, there were considerable delays in settlingthe public external debt the amount of which compared to exports of goods and services increased from 10.6%in 1984/85 to 29% in1990/1991 reaching36%in1991/92. Theinternaldebt con- solidation, operations and thetwo public debt rescheduling by the Paris Club -in May 1989 and December 1991, did not prevent the accumulation of otherareas, the amountof which,asof 30June 1992, stood at 398thousand millionCFA francsfor domestic debts and146 thousand millionCFAfranc for externaldebts.

Therecently concluded standby credit arrangements between Cameroon government and the IMF areimbued withconditionsthat promise extreme difficult times ahead for the country. (see Wamey, -1994) ItAtter Approval of Stand-by Credit. IMF staff predicts harder

times

for Cameroon

(Cameroon PostNo.215 April 274 May, 1994, Yaounde-Cameroon.p.7).

"Cameroon

hasneverfaced a crisisonthe present scale. nor hasithad to develop and sustainsuch a

broad

array of corrective policiesandin somanyareas. It is far too

early,

therefore. to gauge the chances of successof a programme, the elaboration of which has been considerably complicated by the

inadequacy of the data base and the rapid weakening of confidence, as evidenced by'

a

plummetin'g demand for money and large-scale capital flight.' ",'

'. In addition, since 1971/1979 the Gross Domestic ProcJuct (GOP) of

the

Cameroon economy has passed through the following.states:

• The first stage engulfs and average growth between 19701.1971 and1978/1979during which the GOPincreased

at anaverage

annual

rate of 15% innominal terms and 4.5%

in real terms. The growth rate was propelled mainly

by

the agro-industrial sector which received huge amounts of , public investment especially during the 3rd and 4th Five

YearEconomic, Social and Cultural Development Plans.

• The second stage 1978/1979 and 1984/1985 involves an exponential growth averaging

n%

per year In nominal terms and8%

in

real terms resulting mainly from oil exports.

• Thethird stage from 1985/1986, between and 1986/1987 the GOPgrowth rate dropped from 6.9% a year eariier to4.5%

in 1986/1987 and to 7.1% between 1986/1987 and 1987/1988. The average negative growth rate recorded between 1986/87 and 1990/91 was 4% in real terms. This new situation was provoked bythe 40% increase" irithe exchange rate between the CFA france and the US 'dOllar and alsobythe sharp fall in World pricesofthe rnalor export of the country (cocoa. coffee oil) valued in US dollars. (see for example UNDP) . Republic of Cameroon-Human Resources Development in Cameroon 1993 Yaounde; IMF (1968) Surveys of African Economics, Vpl. 1 Washington

O~ ",'

A sectoral break down contribution to GOP growth indicates that from"1979/1980,there was a long-term gradUal turn around in the importance of the primary sector (from 39% in1974/1975to 24%of GOP in'1989/1990) in favour ofthe secondary sector which had increased from 17% in1974nSto 38% in1989/1990. This significant reversal was propelled by oil production which considerably in- creased the impact of the secondary sector.

· Since the late 1970s, oil has become a major engine of economic growth, replacing the country's traditional agricultural resources as the major source of foreign exchange earning.

1.3 Manufacturing Sector

Cameroon's industrial sectorIsprimarily engagedin processing agricultural products, producing consumer goods like textiles,food beverages, tobacco, chemicals, footwears metallurgyandnon-metal- lic mineral products. The manufacturing sector contributes about 10%to

GDP.

The sector is dominatedbysome30large enterprises;

with only

a

handfulofmedium

to

large firms and several thousands Small and Medium-sized Enterprises (SME) employing less than 10 persons.

State intervention in industry is channelled mainly through SNI which by 1975 had holdings in 30 industrial enterprises, 12 of which wereamong the largestcompaniesin the country and which Included pubfic utilities such as the water and electricity'corporations (Societe Nationale des Eaux du Cameroon (SNEC), Societe Natiooale d'·

Electricite (SONEL)

and

the country's largest employe,r, the agricul- tural producer Cameroon Development Corporation (CDC).

The National Investment Corporation (Societe Nationale d'- Industrie (SNI)had holdings in about a thir.d afthe firms, mostly in the secondary sector and some of its holdings In activities with the primarysectorarealsoinvolvedin fond processing,Public and mixed enterprises accountfor about 40% of total value added to manufac- turing.

There wasa rapidexpansionof the manufacturingsector between 1979and 1982, thanksto impetus ofgovernment lnvesnnentin large, capitallntensiye,Jnd~stries, for example, societeNatiQ~te de Raf-

- ' ,

,-

finage- .,Natio~al Oil Refinery (SONARA) which now- remains the largest~nterprisein termsof turnover in the country; the extension of the~ompagnie,Camerounaisede l'Aluminium (ALUCAM), 'aluminum facto~, the Cameroon sugar company (CAMSUCO). Other invest- ments have occurred in the state Electricity Corporation (SONEL).

·.,' The pulp and paper mill, (CELLUCAM) and Societe Camerounaise ct'Engrais~SOCAME~ are amongst others. Government investment rose from 18% in 1976,1021%.In 197&to 25% of GOP in 1981.

As a result, the 1982/1983 drought agricultural output.dropped drastically and withit industrial activity, especially in the food process- jng .sector From mid 1984, there was a marked recovery and par- ticularly strong growth in breweries, cigarettes, and construction materials, stimulated by the increase in disposable income and in public sector Investment infrastructure, both attributableto thelarge Increase in oil revenues. With increased oil production, government revenue andGOPrapidly expanded and this led to growing subsidies to the-r.tafge loss-rnaklnq enterprises in which SNI holdings, and the lost was overlooked. With the ardent of the economic crisis in 1986, the government was compelledtoradically review the situation. For example. CELLUCAM was forced Into liquidation in June1986;other . such enterprisesthat went into liquidation included the wood process- ing enterprise societe Forestiere et Industrielle de Belabo (SOFIBEL) the fertilizer factory societe Camerounalse d'Engrais (SOCAME). A presidential commission was established In 1987to take stock of the performances of public sector and mixed enterprises.with

a

view

and

mandateto recommendtheirclosure orwhereviableonescoud be transferred tothe private sector.

1.4 Public Enterprises

The sector otherwise known as Public Enterprises (PEs) sector comprise state-owned or statecontrolled productive entities, thebulk of whose output is sold in the market place.

As a sector. PEs playa significant role in mixed economies with valuable contributionstoGOP. In the case of Cameroon, the World Bank emphasises considerable contribution to GOPgrowth byin- creased state intervention In industries.GOPgrowth between 1979 aOO·1985 was around10percent per

annum,

This was attributed not . only to the rapid expansion in oil output but also to the emphasis in the Fourth Plan (1975-1980) on directly productive investment and the coming on stream of general large· public projects: in the Import substituted industries. (World Bank, 1987) Cameroon: Country Memorandum in Washington D.C.).

I

Table 1 gives a bird's eye view of registered enterprises by branch 1980 and 1986.

llilltlIIB.III_ll.\.1

Branch Mid1980 Mid1986

Food Products 77.0 5.6

Beverazes andtobacco 33.0 33.5

Textiles 20.4 11.8

Wood and paper 2.9 2.7

Chemicals and rubber 9.2 9.5

Metals 14.9 21).7

Construction materials 3.3 9.0

Electronics 3.3 1.8

Others 2.9 4.1*

Total 98.3 98.7

Source:Ministere de l'Economie etdu

l/aJJ;

Note annuellede statisque 1979/1980,'andAjrique Industrie; ameroon horizon1991.·

Includespetrol and petrolderivates.

Note: Figures do not add

Ie

to 100, due to rounding; branch cateRorizat;ol1 differs slieht. amone vears.

PEs dominate Important sectors like infrastructures, heavy in- dustries and public utilities amongst others. For example, the Cameroon Development Corporation (CDC), SNEC, SONEl, SONARAetc.

Theyalsoconstitute major borrowersindomestic and internation- al financial markets; they equally

draw

extensively on government budgets; and oftenemploy a large segmentof the labour force. For example, state intervention in industry was directed e~entially

through the SNI which in 1975 had holdings in 29 industrial enterprises, 12 ofwhich wereamongstthe largest companies in the country - SNEC, SONEL, SONARA and CDC etc,with the CDC constituting the largest employer in the agro-industrial sector with a labourforceof about 17,000.

Increased state intervention showsthat10 companies accounted for 60 percent of total investments in Industry In 1974/75 and 55 percent of turnover which could be seenas'100 big ahead ortoo small a body" _(Ediafri~'(1985)la Documentation Africaine, L'industrie --Camerounalse - Decennie d'industrialization.)

The largest enterprises are found in oil refining, brewing,alumlnom products and cement manufacturing. The bulk of agro-industry

ac-

tivity is in the firsttransfonnation stage classified as belonging to the primary

sector.

Astudyforone

Overseas Development

Institute

(001)

states that capacity utilization industry between 1973/77and in1981 was in the range of 66-75 percent. The highest rates were found in beverages and tobacco and the lowest in base

and

fabricated metals".

In1986,the beverages and tobacco sector accounted for 33 percent of turnover. (Tgor Karmiloff(1988) Industrialization in Sub-Sahara Africa. Country case study-Cameroon, Overseas Development In- stitute, London.

_~~--I'

Activity Capital Private 1984/85 French Others

FCFA

20 National Nationality

Billion Percent

Agro-food 98.8 64 12 17 7

Wood and paper 24.3 42 ^,10 16 32

Metals 27.4 30 3 64 4

Chemicalsand 2.6 21

35

32 12

nlastic

Textiles and 9.1 36 23

10 31

leather

Otherindustries 8.9 39

15

32

14

Source: SIFIDAAdvisory Unit -(1985) La secteurprive dans L'economic Camerounaise.

Foreign investment continues to

pray

an essential role in the socio-economic development of the Cameroon society. Table 2 shows available figures on foreign investment inflows for1984/85and the level of French participation and other foreign Investors.

It is difficult to obtain accurate up-to-date data. Frenchdomination ispronounced in the chemical and plastic (SOCAME), textiles and leather sectors. Since the discovery of oil In the country, this dominance In the chemical sector Is therefore not surprising. France equally dominates the cotton and textile industry. Another major inflow of foreign capital was in the paper and pulp which attracted large scale public investment during the fourth Five Year Plan CEL- LUCAM project attracted capital from an Austrianfirm nVoest-Aipine^ll• Aroundatotal of 100millionCFAfranc was injected into the industrial sector, with about26percent coming from France;2.7percent from the United Kingdom,1.8percent from the Republic of Germany;1.7 percent from Italy and 1.6 percent from USA. During 1980-86, there was

a

substantial influx of foreign companies getting up subsidiaries in the country particularly in two clear areas. Banks and insurance companies In the service sector, and construction companies were more interestedto undertakebusinessactivitiesin the rapidly expand- ing public sector Infrastructure.projects.

Fewforeign investorswere interested in the manufacturing sector in the 1980s. An exception being one UK BAT company which bought majorityinterestin theailing Bastos cigarette French factory. Plans by another British company to start a cement factoryinLimbeanda US investor's plans for

a

new flour mill factory in Limbe did not rnatertallze, The British/Dutch Uniliver company Pamol after more than half acenturyoperationalactivitieswoundup its activitiesin the Ndian Division oftheSouth-West Province.

Hardly any of the pUblic enterprises produces

a

positive balance sheet· they'are all major loss-makers. operating in a non-eompetitive environment .and supported by ever-increasing subsidies. The country's public enterprises have been

a

majordrag on the fiscal budget,the banking sector and the quasi-fiscal sources of revenue fundsandsocial securityfunds. For examplethe funds oftheNatlonat Social Insurance fund (CNPS) being workers contributions for 'their retirements are very often misused and mismanaged, which makes

it

impossible for retired workers to get their benefits and social benefit allowances.

The returns on pubuc capttal invested in public enterprise like CameroonAirlines. Cameroon RailwayCorporation; Cameroon Ship- ping lines, SOCAPALM, CDC, CAMSUCO. continue to be low and in

',Ir

many cases negative. A major draw back in Cameroon's public enterprise is the absence of proper accounting system. The special advantages accorded to' the public enterprises generates an environ- ment totally unfavourable to private enterprises. makingit difficult for

the latter to compete. . ' "

Mention has been made of the fact that viable strategic enterprises were selected for privatization; and those jUdged non-viable, for liquidation. Presidential Commission was appointed to identtfy and present an Inventory of public shareholding and to recommend which enterprise should be liquidated or privatized.

Among the 150 Public enterprises in the government portfolio, diagnostic studies were carried 'out on 75. On this basis. decisions were taken to privatize 6 enterprises. to liquidate 12 others (5 have already been dissolved), to rehabilitate 38 and to merge 4 enterprises into 2 entities. The decisions concerning14enterprises of the finan- clal and banking' sector are still

awalted,

In addition. available up-to-date data on public enterprise and other statistical materials remains a major problem in the country.

This makesitdifficult to present a critical analysis of current situations In the absence of up-to-date accurate statistical material. Public enterprise management remains inefficient. an employment policy based on productivity criteria is stili absent. and the public sector remains closed to private investors.

Itcan only be assumed that divesiture Is proceeding in certain enterprises while there is scarcely any attempt to radically restructure large scale enterprises since most of these enterprises are visualized as "chop-farms" for membersofthe ruling partyunder the concept

of

the strategic importance of these enterprises. In reality the strategic importance

of

these industries are the role they playas "milking cow"

to benefit the government officials. It is no surprise that the powers that be will do everything to keep alive the continued existence

of

these kind of industries. However. spotty evidence are available

~uggest,lngthat financial flows from the state to public enterprises remain high and

-Iri

.some cases direct trscal transfer are being replaced by less obvious subsidies as bank financing. Presently. the banks themselves are in deep liquidity crisis.

To redress the situation and gain some degree of credibility, the government embarked on a policy strategyof"performance

con-

tracts" as attemptsto boost the efficiencyofenterprises remaining under state ownership. Most of_these~signed performancecontracts havefailed. Government hotelsare hired out to private people to run.

Cameroon'sprogress in reducingthe sizeofthe public sector remains slow. Whatever the case, privatization efforts remainthe best policy strategy to adopt andtoreduce the numberof public enterprises.

1.5 Private Sector

A close examinationofCameroon'sFiveYear Development Plans shows emphasis on developing the prlvate sector. late President AhmadouAhidjoinhisspeechtothefirst CameroonUnion Congress (CNU) in Garoua, notedthat'theintegration of the Cameroonianlnto the private productive sector is

a

problem both

vast

and complex which In any case presents itself In differenttermsdepending on whether nationalsare required to assumethe management of under- takings or whether one Wishes to help national undertakings to flourlsh", Ahmadou Ahidjo (1969) General Policy Report: First Cameroon National Union COngress held

in

Garoua10-25 March

1~~~ .

This speech could be seenIncontrasttoemphasis on developing the industrialproductive sectors, with Nkwame Nkrumah's-viewsof

"we should be hampering our advance to socialism

if

we were to encourage the growth of Ghanaian private capitalism in our

midst";

(Ghana National Assembly Debates, of 11 March 1964. and in 1960 when he announced that "private business must now stand on their own feet and that this government will henceforth place far greater emphasis on the development of Ghanian co-operatives rather

tnan

encourage Ghanaians to start private business enterprlsss", Ghanaian Times, 10 October 1969, Accra Ghana). .

Almost anybody nowadays admits the need for a greater private sector role In Cameroon. Some do so grudgingly: they worry about equity effects and/or a deepening of class divisions. Nkame NkruflJ~ih'fj pronouncement could be seen in this context. But economic decline, the patent and widening failure's of state actions

in

development and the many constraints on effective resource use

in public sectors have made private mobilization more acceptable and more necessary.

These statements show the varying role and Importance of the private sector. Private enterprise should' be the motor of industrial development either through Joint ventures (cooperatives) or as a .one-person undertaking. The unsystematic policies towards' the private' sector which have placed the entrepreneurial class in Cameroon, for example, under some sort ofsuspicion contribute to the declineofthe economy in no small measure. Vestiges ofsuch policies can

be

found within the bureaucracy and the hesitance of some Cameroonians to invest in industries.

. Generally, two contradictory approaches remain visible to the development of the private sector to pursue a sound industrial development; namely, the paramount political thinking at the time of independence and the adoption of the Five Year Plans which favoured active state participation in economic management. The in- stitutionalizationofgovemment policy with the effect of dramatically increasing the role of the state In industry (Planned LiberaJism). The FourthFive Year P.lan laid emphasis on large scale investment with the eventual establishment of many state-owned industriesIn various parts of the country. While emphasis was placed on large-scale industries, some efforts were made to promote smaJl-scaleindustries.

- However, this promotion came as a major shift in government policy following the poor results or performances attained by large-scale enterprises seen as the major motor for economic growth and development. The liquidation of most of the state-owned enterprises and the general economic decline of the country in the 1980s has given new impetus to the government to increasingly reexamine the role of the state. The failure of public enterprises in meeting the goals and objectives envisaged increases the importance and significance of the private sector in the development process.

The establishment of Funds d'Aide et de Garantie aux et petitesat .Moyennes (FOGAPE-The Fund for Development of small-scale in- dustries) is also a part of the government effort to bring other parameters and actions into the mainstream of the development activities. The diversity of Cameroon resources makes it even impera- tive to broaden the scope and widen the range of diversified and changeable products of industries in this sector.

f I

In Cameroon, like in most African countries. the private sector is still limited in capacity to have much impact. The indigenous private sector in Cameroon (other than farmers) consists mostty of small traders, some individual truckers, artisans and a few small manufac- turers. In some cases the indigenous groups coexist with an- ex- ogenous or expatriate group mainly large-scale traders, construction contractors and shifted artisans. Large--scale industrial sectors are still dominated by foreign capital with many expatriates still at the helm of senior management positions.

The activities of this sector are characterized by

ease

of entry;

reliance on indigenous resources, family ownership of enterprises, small-scale of operation, labour intensive and adapted technology;

skill acquired outside the formal school system, and unregulated and competitive markets. ~Joseph Ngu (1991) Training issues in the informal

sector

'w.ith special Reference to Cameroon IIEP/MERES/BREDA Regional Training Workshop on Education, Employment and Human Resources, Development, Buea University Centre, 2-13 April 1991, Cameroon IIEP/UNESCO, Paris.)

In 1977 It was estimated that the intensity of the private - informal sector activities in the Yaounde (Capital of Cameroon) area In in- cluded about 32.842 economic unit (see International Labour Or- ganization (ILO 1977, Unpublished data at MINPATfollowingarequest by Cameroon Ministry of Plan and Regional Development; MINPAT) to undertake a survey ofthe modern informal sector as part of its research programme on acquisition and self-employment in the urban informal sector.

The dominance of the private sector small size enterprises (SSE) is observable as over 3000 handicraft and small businesses are established annually in the country. As evaluationofthe development of Cameroon through the decades 1966-1986 in the light of the country's Sixth Five Year Development Plan 1985-1990 shows that the private sector has created more jobs than the public sector. Some of the larger industrial agglomerates started in the informal sector notably in the metal working trades and furniture making (see Tchamago and Nyobe 1990 structure et Evolution de I'emploi dans Ie secteur public seminaire atelier formation de la politique nationale de population: diagostic de base (MINPAT Yaounde). Some of the

'\ -: : t .A: ' . ; . " .~^,I•~

p'rivatebigindustries: Fotso Enterprise; Fokou Enterprise.etc .started within the Informal sector:.

On thewhole, efforts to promote private sector development have been disappoirrting, particularly in terms of shifting productive

ac-

tivities from ·the public to the private sector, and promoting private sector growth. Legacyis one of the important factors in the slow transition. Years of isolation have limited the exposure of private enterprise to international business practices. With regards to measures articulated by the authorities, private investment has not yet responded to them, probably because the measures, while neces- saryremain inslifficient by themselves.

With the massive retrenchment of workers in recent years as a resultof World Bank's Structural Adjustment response to the ongoing economic crisis, the' magnitude of unemployment and means of livelihood for craftsmen, entrepreneurs and graduatesfrom educa- tional institutions who are unable to find employment in the private formal sector have increased.

CHAPTER TWO

Periscoping Economic Development Strategies and the Evolution of

Industrial Policy

2.1 Public Enterprises and Private Sector

Development .

Neither planning nor a government strategy for economic growth is a recent Innovationin the Republic of Cameroon. Nevertheless, an attempt to establish comprehensive national planning and to formu- late an economic strategy aimed at the development of the country's economy as a separateunit (rather than as a regiment of the France- Outre Mer economic unit) did not begin seriously before the former French Cameroon or Republicdu Cameroon attained independence in1960.

The absorption of the British Cameroon into French Cameroon in 1961 only enhancedFrance'suseof administrativeand fiscal coercion to further cement its hegemony over the territory. Cameroon's general crisis of economic growth remain, planned as part and parcel of theFrench economy. Administrative policies have beendesigned to favour French investmentand trade connectionsinthecountry, ...

Three limitations remain significant concerning planning priorto pre-independence, namely:

• The lack of

a

comprehensive macro-economic plan and goals.

• Project selection being explicttlyinterms of current franc zoneinterests - partlcularlythat of easing France's foreign exchange stringency,. not long term territorial development.

• Planning- espeelallyfinancialmatters arepurelycarried out andregulated in France. .,

Natlo~.deYelopment

stryitegyandits approachesto planning and to institution creation istotallydominated by official French thinking.

In spite of the new political change that evolved in1961 and in light of the current windofpolitical changes blowing across the continent, Cameroon's governance leadership has not altered the status quoof Frenph domination This is one of the dilemmas of Cameroon Development Strategy since it is not able to balance private claims against oommun'ity

needs

and national

goals.

'However, political independence injected some changesindevelopment orientations in view of the-faGtthat the country soon Initiated apolicy of planned development ^I Five Year Plans were instituted as the basis for economic development: By 1991 six such five

vear

'plans had been articulated and aggregated with varying results.

The underlying elements of Cameroon's development -strategy have been influenced and, guided by

the

_following ideological con- ceptions:

• planned liberalization;

• self-reliant development;

• balanced development; and

• social justice.

(See John W. Forje (1977) Cameroon's Five Year Development Plans, Lund-8weden; Bikas C. Sanyal·, Joseph Ngu et al (1990);

Development ofthe OU Industry in Cameroon and its implications for Education and training IIEP Research Report No. 79 Pads-Prance W.A. Ndongko (1988) Reflections on the Economic Policies and DevelopmentofCameroon, MESRES/ISH Yaounde·Cameroon; Five Year Economict Social and Cultural Developmentt yaounde- Cameroon; Phillippe Hugon (1968) Analyse du Sous-Developpement en Afrique Howe. L'example de L'Economie'du Cameroun Presse Universitaires de France. Paris.

, ,

Plan-ned liberalization was envisaged to evolve within the framework of a mixed-economy whereby both public and private i~itiatives were to jointly propel the Wheels for development and economic take--off of the country. It was a policy strategy of encourag- ing private initiatives under the gUidance of state. The role of the state enterprises was mainly in the industrial sectors and public utilities which support the productive sectors, and mainly to provide in-

frastructural facilities while the private enterprises ventured into

more

productive and profitable areasofinvestments.

Thestrategy was of significant importance at the early stagesof independence bearing in mind the dominant role of the private sector In the economy. Equally relevant in this context was thefactthat these enterprises were owned and operated by foreigners. Thus, itwas

a pot

icy strategyofstimulating and encouraging endogenous participa- tion in the development process. Further more, the policy approach acted as a catalyst In cementing the confidence of foreign Investors and bankers to continue theiractivltlesin the country. It was also a catalyst in regulating private enterprises and restraining them from attaining oligopollstic power. But eventually the role of private enterprises and foreign capital declined sharply and the role of the state in the economic development increased.

The self-reliant policy approach was oriented towards addressing the issue of minimizing'reliance and dependence on exogenous capital and investment. As a predominantly agricultural economy, the policy strategy was focused in this sector; particularly since emphasis was laid ;n the areas as the backbone for food self-sufficiencyandthe eventual economic take-off the country. The First Five Year Develop- ment Plan otherwise christened as the "Peasant Plan" 1960-1965 reflected government's intention towards increased agricultural productivity and self-reliance. It was necessary for government to

provide all the vital incentives

such as

protection to cash

crops and adequate 'subsidies to farmers by way ·of acceptable good price for products in the event of world market price slumps. If its policy objectives were to be realised.

WhUe the poliGY strategy of self reliant development was success- ful In the agricultural sector, It was not the same for the industrial sector. The policy as such was neither laissez faire nor fully private sector oriented. The investment code of 1981 did encourage foreign inve.stment and know-how. Tax holidays, exemptions from custom duties amongst others provided incentives for foreign firmsto con- tinue their activities in the country. In the private sector, it implied consent' Involvement' with large private trading enterprises such as campaign' Francaise de l'Afrique Occidentale (CFAO) and Societe Commerclate de l'Ousst African (SCOA). Thus administrative policies were coined with French interest both official and private.

Howeve~

'subsequent, development plans,

pa.rticu'l~trly

^{the Third}

five Year Development Plan,1970-1975 addressed industrialization from the perspectives of reducing foreign investmentand stimulating domestic capital investment towards the realization for self~refiant development in the industriAl sector:Amajor move in ihis direction was the establishmentof new technical and financial structures - NationalCentrefor Assistance to Smalland Medium Size Enterprises (CAPME) and AidandCredit Guarantee FundforAssistanceto Small

and

Medium

Size Enterprises (FOGAPE) designed

to

Injectincentives

to indigenous small and medium size enterprises.

The last two polley strategies (balanced development and social justice) wereoriented towards addressing the fundamental issues of unevendevelopmentand the disparitiesexisting betweenthe different provinces and the prevailingdegree of social inequity in the society.

It was created with the aim of providing equal opportunities, pos- sibilities and facilities between different sectors of the economy, regions and social groups so as to attain some form of lIintegrated self-reliant development. That policy goal has yet to be realised.

Unbalanced development and social injustice has accelerated over the years. Most of the development activities are concentrated in three of Cameroon ten provinces, Littoral. Centre and South, and social justice has turned out to be "Capitalism for the rich and Socialism for the Poor...¹¹and where the governance system and political leadership has failed to exhibit any of the following variants,

IIquaiity, honesty, and intelligence of the leadershipand its Willingness to respond humanelyand realistically to the country's problems" (see Vietor T Le Vine in a forward to Cameroon's Five Year Development Plan by John WI Forje,1977. Lund - SWeden.)

Thus a policy intendedto bring about a better distribution of small scale industries, rural development between the regions turned out to be designed to advance. ethnic homogeny of a particular tribe, especially with the change of regime in 1982. Social justice and unbalanced development has since been replaced by increased and developmental marginalization with moral rectitude no longer as the guit1ing philosophy of the new deal regime. That the economic crisis which surfaced In the 1986'swas no surpriseas the government had departed from any form of sanity in its governance system and economic development process through the intensification, ln- stitutionalizatlonand legalizationof corruption and mismanagement.

f

'The place of public enterprises and private sector development remains critical in the soclo-econornlc transformation of the Cameroon society. As an agricultural economy any attempt to reform the primary sector as envisaged inalltheFive Year Development Plans and currently spelled out

in

the Draft Ten Year Master Plan for in- dustrialization, implies another attemptby the country to industrialize, that is, to develop the secondary and tertiary sectors of the economy.

Such an attempt is tantamount to supporting a simultaneous devetopment effort

in

which Industrial enterprises are' expected

to

grow out of agricultural undertakings through the process of raw material transformation, utHlzing of course, the aid of human resour- ces and capital goods.

Efforts on industrial development in most developing countries have been varied and the achievements inconsequential for any reckoning.- Cameroon, being

a

developing polity, is not an exception - it wants to achieve industrial development. Butthe fundamental question is, in what conceivable way can Cameroon industrialization remain unresolved?

However, to adequately discuss industrial policies, it Is imperative to identify who the prime promoters of such policies are. Granted that government isthe prime promoter of industrial policies, It iseqUally imperative toexaminewhat constitutes the different roles of govem- ment towards

socio-economic

transformation.

Asociety issaid tohave an ideal Industrial environmentifit-wears an adequate infrastructural outlook. Hence as stipulated within the goals and projective of the FiveYear Development Plans, the ade- quate provision of physical infrastruetural facilities (e.g. roads.water, electricity, communication. storage) and skilled human resources

etc.,

constitute essential pre-conditions for purposeful industrial development efforts of any nation. As argued by Ndebblo lithe provision of these socialheadcapital facilities constitutes the primary roles of government towards industrial development' in [John Ndeb-

blo,

(1988) "Industrlal Environment and Economic Development of Nigeria; in J. Obot (ed) 1988 Environment and Development in Nigeria.Calabar,WusenPressLimites, Nigeria].

In other words, the provision of Infrastructural facilities remains a primary task of govemment in creating conditJons conducive to industrial growth and deVelopment. The major consumer ofthese facUlties are either the public or private sectors.

2.2'Planning for Development

In all, government economic development policy has travelled through the following:

• 1960-1970, the period of adjustment or of rating the modalities for socio-economic transformation. The country had to adjust from dependency to Independence following the grantingofself governancebythe colonial powersand the reunification of the Cameroon which coupled the British and French administration and governance system.

What distinguished British colonial policy from that of France was tliat the former believed

in

the policy of gradual independence for its colonies while the latter was benton making Itscolonies

part

ofan external or extended province of France. Itcan be visualizedthat FrenchCameroon's economic growth was planned not

asa

self-entity but as

part

andparcelofthe Frencheconomy, Suchpolleyapproach to economic development Injects certain setbacks when -the ad- ministration changes handsas it did following the reunification of British and French Cameroon in1961. (see ForJe 1977 Cameroons Five YearDevelopment Plan, op.clt.)

:--"-Two development plans were arttculated, nameJy" the Plan of Adaptation 1960-1965 andwhichwas an attempt to adapt the two repelling colonialeconomic andadministrative systems andto get an acceptable integratedstructural framework for future soclo economic transformation.. TheuPeasant Plan 1965-1970 which received the blessings oftheFederalNational Assembly in August 1966which was to radically transform peasant production to attaining self-sufficiency

th~rebymakingit possiblefor the country to feed itself and to export agrfcultural--commodities of great variety for Itsforeign exchange earnings. The peasantplan moved from adaptation to realisation and to correct the errors and omissions committed in the execution of the nplan of adaptation".

_ The development policies of the 1960·1970 as envisaged through

the two

first five year development plans - adaptation and peasant plans had the characteristics of:

- • industrialization by invitation; l.e, attracting and retaining foreign capital and know-how;

• encouraging private and public initiative; itwas envisaged that faster industrialization could be attained through a

policy of mixed economic development by encouraging

private initiatives and expanding the role of the state; and_

• an import substitution and domestic protection.

1970-1980 Development policy activated in this period were un- dertaken by two development plans: the Third Five Year Plan or Plan of Production and Productivity (1970-75) aimed at boosting industries and Improving Infrastructure with stronger incentives centre on processing manufacturing industries.

The Fourth Five Year Plan (1975-1980) which focused on broaden- ing the market for consumer goods and increasing the competitive basis of Cameroonian products: Enhancing the competitiveness of the country's goods hadto be construed on the restructural con- siderations of:

1. growing disillusion with the import substitution, in- dustriali~ation,,strat~gyof the sixties;

2. lack of secondary effects of industrialization, i.e. itsfailU,re In generating employment and developing local trained manpower potentials for Cmeraon's industrial develop- ment (see Joseph Nguatal (1990) Development of the oil industry inCameroon:liE? Research ReportNo. 79,Paris p.20).

The decade was characterized by major fundamental changes in politicalandeconomic development. To begin with, the shift from a Federal to

a

Unitary system In 1972 promoted significant changes,in the governance system of the country - centralization was intensified and accountability reduced to the possible minimum level. The formation

of

a national policy took a different from and French influence morethan ever intensified. A policy of Cameroonization was embarked upon. Numerous financial

and

technical institutions

created to guide the development process; for example, thecreatlon of"e National Investment Corporation ($NI) and the creation of the National Office for Scientific and TechniCal research (ONAREST) by aFederal Law in1969 became operational in mid1970s, arid later restructured into the General Delegation forScientific and·-Technical Research (DGRST) in 1979 with five research institutes had the

lmpetus

of promoting research activities in the country: (See John

W.

Fo~e"(1988). Science, Technology and'Development Policy in Cameroon, Lund Sweden. The first country wide populationcensus

was

undertaken in 1976. 1980-1990, the implementationOfthe Fifth and Sixth Five Year Development Plans were enacted. The fifth five year plan (1980-1985) focused on achieving food self-sufficiency, diversification of the economy through production and processing of primary products locally and realization of inter regional disparities.

A;rnajor characteristic during the early 1980s was the dramatic change of buttonat the pdUtfcal scene of the governance system with theresIgnationof Ahmadou Ahidjoandtheriseto"power

ot

^{Paul Biya}

in 1982. .

The droughts of _1982~83 and 1984-85 particularlythe Northern Provinces equally had adverse Impact and effect on the economy.

The last plan - Sixth Five Year Plan (1985-1990) was focused on

"bringing a balance between population, resources and development"

(Ministry of Plan and Regional Development (1986), Five Year Economic SocIal and Cultural Development Plan, Yaounde- Cameroon) .

. Industrial policy as outlined in the Plan guide was aimed at ad- dressing the further integration of the industrial network and creating a favourable' environmentfor the developmentof large units and to ensurethe growth ofsmallerones.

EmphasiswasequaJlydirectedtothe roleof large scale Industrial units and with small and medium size industrial units, in particular, promoting regional economic potential. Industrialpolley was to ad- dress issues promoting and supporting the objectives of foodself-suf~

ficiency, the modernizationofthe rural sector as well as ensuring the competitiveness of the country's products within the national, sub- regional andlntemanonel markets. (Ministry ofPlan and Territorial

Administration (1985) Vie plan Qulnquennal De Developpement Economique sociale et cultureI1986-1991,. Yaounde-Cameroun).

The Industrial policy oftheplan wastofocus attention on:

• the development of local

raw

materials

• the promotion of standardization

• the exploitationofpatents and licenses

Emphasis on standardization and patent rights and trade marks was particularly deSf~

to

promote small and medlum.slze in- dustrial activities. A significant part of,the industrial strategy was the articulation of guidelines for the Master Plan for Industrialization.

The SixthFive'YearPlanended Cameroon's30years marathon

of

planning for development. The five year plan was to be replacedby

a

"Master plan for Industrialization^ll designed to articulate and ag., gregate

a

coherent medium - term strategy that recognizes the Importance of the private sector's contribution to the overall in- dustrialization process.

2.3 The Master Plan for Industrialization

The endofthe Sixth Five YearPlan signalled the startof aten-year Master Plan for Industrialization drawn with the help of UNIDO in 1989 with a major drive to strengthen the manufacturJng sector. The Plan takes Into consideration the ongoing economic crisis and its eventual duration and effect upon planned capital investments.

The draft Master Plan, like the previous Sixth Five Year Plans, identifies specific sectors suited for further industrialization including:

• Agro-industry

• Construction, public works and building materials

• Bauxite and aluminum

• Chemicals and fertilizers

• Forestry

and

wood industries, '

• The steel industry

• Mechanical and electrical industries

.,N~turalgas

• Petroleum

• Pharmaceutical

• Plastics

Emphasis is

equally

laid on human resources development and on scientific and technicaJ training. In this respect, it calls for the creation of a National Technology Centre and the expansion of sciencefacuttles of~ecountry's universities.

In addition, the draft plan calls for an extensive revision to achieve greater simplicity, transparency, coherence and certainty in order to achievea higher return on the distribution of resources.

The absenceofan overall set of sectoral and macro targets with consistency and allocational efficiency test: and in additions the politicsofethnicism and marginaJization destroys all formsofcon- fldence building in theregimethat impedes the participationofother ethnicand marginalizedgroupsto activelyparticipateinthedevelop.

ment process. Some of these problems do arise as the resultof FrenchStylePlanning, notbeing compatiblewiththe developmental problemsof a developing country like Cameroon.

• Indirect financial controls based on credit rating are of doubtful efficiencyin providing controls or incentives for large overseas firms. And the limited role assignedto state productive Investment partIcipationseems Inappropriate.

• Interest group members,

who

in the case

of

business are predominantly foreign,do not haveas convergent Interests either with each otherorin the state as in France, and are

far

less

willing, or

able to participatein

planformulation

and goal resolution. Their interest in the country is profit maximization withinthe shortest possibletimeperiod. In addition they have no ethnic group or blood relation or adherence to be fully committed to the well being of the people.

-. The gross absence of skilled manpower potentials to adequately undertake complicated data programming.

provision and analysis involving thousands of government and private interest. expert committee members being technically impracticable In under-devel'oped economy like that of cameroon.

Even though attempts were made at various stages of the different plans,

yet

goals were not realized due to the very nature of the governance system being too rigidly undemocratic and over central- ized with no form of power trickling down to the masses. While admitting that some centrality in the technical aspectofformulation at least is essential to give coherency and sense of overall direction for the ultimate realization of envisaged goals; decentralization of powers to effect participation and sense of belonging is essential.

These fundamental underlying factors are missing dimensions in the country's development strategy. This"isa disease which the grand master plan of industrialization which now replaces the Five Year Development Plans suffers.

To suggest that the constraints given the prevailing governance system and ethnic dominance of the ruling regime backed by the overall politics of marginalization and "chop broke

pot'

(eat and destroy the pot) will In fact be relaxed would be too optimistic.

Nevertheless. the faet that it is possible to pose the problem of Cameroon development In terms of constraints, ethnicity and mar- ginalization of the fulfilment of a national strategy which appears inherently viable is. by itself a ground for cautious optimism as people are not aware of the issues involved.

The nascent stages of the country's development effort are not over. Rather they are still In their infancy in view of its sluggishness to move towards a genuine philosophical orientation of political pluralism. accountable democratic. governance in an increasingly competitive international environment. The need to articulate a genuIne development strategy and governance system is imperative.

.The major drawback is the degree of secrecy that surrounds the plan. The country has yet to be Informed of the existence of such a master ptan as an engine of sustainable take-off to industrialization.

Until that is done, we cannot begin to talk of objectives and goals

realization envisaged within the Master Plan for industrialization.

Second'y. cameroon national.·development strategy and the ap- proaches to planning and institution creation have never has the authenticity of Indigenous input nor articulation.', rather;'

it

has con- tinued to be dominated by official.Fr-ench·thinking. Thirdly. at the domestic level. the plans have suffered'from:instittrtfonalized and legalized corruptive practiceswith no comprehensive·accountabllity rendered to. the pU;bUc. for scrutiny. Fourthly, the plans have been imbued with several.conceptual and procedural errors which have contributed to ~rJ1itrrigtheeXl~ntto,which their objectives could be Implemented and reaUzed: "._ ',:-.

": - ~ - \ ' • 1-

-• the needfor considering production changes in-the context of overall _socio-p61~leat Institutional patterns are often ignored; "

• the needfor mass understanding of and enthusiasm for any programmebased on local action to success has not been appreciated. -There Is a lack of effective public support and the relative absence of effective development committee.

The current SAP backed with the salary cuts and devaluationofthe franc CFA makes it difficult to rnobnlze local support for any form of development; -

• the degreeto whichdirectlabourcould beeffectively utilized .without intensive capital support is always over estimated.

Generally, the development strategy of the country is still evolving within the contours of the economic and political Interests of France_a~ of the Franc zone. and the attempt to articulatea genuine ind,igenous developmentstrategyas a way of achieving soclo-polnlcal goals. The mismatch or match of these two ideologica' approach constitute some of the underlying elements of the o.ngoing development strategy of the country;

• attempttowardsthe creation of a more nationallyintegrated Cameroon economy with less dependence on primary exports. and greater national control over economic decisionsand forces;

• encouragement of industrial development on a wide front associated with increasing processing of exports. and national production of agricultural raw material imports; .