Some Basic Challenges Faced By Entrepreneurs In Cameroon In 2024 And Their Remedies
Cameroon is a country found in central Africa, with its capital city being Yaoundé, and her two official languages are; English and French languages. This country is considered as Africa miniature. Her economic capital is Douala and this is the largest city in the country filled with foreign entrepreneurs.
Her neighbors are; Nigeria, Chad, Congo Republic, Gabon, Equatorial Guinea and Central Africa Republic.
An entrepreneur is usually seen as an innovator of new business ideas and also someone who is capable to turn these ideas into a business venture(activity). At times this venture might yield profits or it might not, due to some challenges which might be encounter know as risks.
A risk is any unforeseen circumstances that might be encountered in the cost of doing business. A risk at times may pay off or led to a lost. Risks are classified into two types: insurable and non-insurable. More details below.
In this article we will be looking at some challenges encounter by entrepreneurs in Cameroon and also some small business sectors in Cameroon which you can engage in.
Some Basic Challenges Encounter By Entrepreneurs In Cameroon
Challenges are those difficulties that an entrepreneur can encounter which can slow down business progress and limit growth.
In Cameroon before you set up a business, you have to register your business with the legal system of the country, depending on the type of business and after which you are given the authority to do business. But however, you might still face challenges such as:
Bribery and Corruption
Bribery and corruption is one of the major challenges faced by entrepreneurs in Cameroon.
In Cameroon, before you register your business under the legal system, you are required to pay some money to the council of that city area but after paying this money, you will still be required to give a certain amount of money to those concern as bribe in order to facilitate the processing of your documents which is against the laws of the country.
This practice slows down business and also hinder economic growth.
In an attempt to solve this problem the government has set up an organization known as CONAC with their phone number written on every government offices, carrying the instruction that you should call if you are treated with injustice at any point. However, this is not effective as bribery and corruption still remain at a very high level in the country.
Lack of Transparency in Tax Collection
Another challenge face by entrepreneurs in Cameroon is lack of transparency in tax collection.
Normally, newly incorporated businesses are exempted from tax payment in their first year of operation. The corporate income tax in Cameroon is applicable at a standard rate of 33%. Legal entities must register for taxation with the Ministry of Finance and must file an annual tax returns by March following the end of the tax year.
Foreign companies entering the Cameroon market to do business, enjoy 0% corporate tax rate on annual net profits for the first two years of business.
It is normal to pay taxes to the government but in the case where there is lack of transparency in tax collection by those involves makes it challenging to the entrepreneur. At times in Cameroon, you might have three different set of tax collectors in a month.
Entrepreneurs who choose to deal with seasonal goods will face a challenge in business if the season for that good is over.
Products like umbrella and rain coats will yield more profits in the rainy season than in the dry seasons. while products like dresses, shoes, books will have a high turnover profit during festival periods like in December , and during school resumption respectively.
To solve this problem, business owners with such products may choose to increase prices when the purchasing power is high and decreases prices during seasons of low purchasing power.
Also. they may introduce other similar lines of business.
During the rain season, many customers will hardly go to the market on rainy days and this is challenging to businesses dealing with perishable products.
In major cities like Yaoundé, Doula where there is over crowding in population and unemployment still at a very high level, many people turn to steal in order to make a living and entrepreneurs who can not employ a security guard are always the victims.
But the good thing is that this risks is one that can be calculated and insured with an insurance company so that in case of such outcome, the insurance company will replenish every stolen items.
One of the highest risks that poses a great challenge to many entrepreneurs in Cameroon is the fear of encountering a fire outbreak as even bigger business places like DOVV also experience this attack despite their high security level.
The major causes of fire outbreaks is usually as a result of either a gas bottle expulsion or two opposite necked wires coming in contact with each other due to poor wiring or destruction of the insulating coverage by pests like rats.
To solve this problem, entrepreneurs should insure their products against any fire outbreaks with an insurances company.
Ensure that every equipment is connected to a stabilizer which regulates the voltage and current supplied to that equipment.
In Cameroon, the standard house hold voltage is 220V and this is require to power many machines use by business men like fridge, TV sets, bulbs etc.
How ever, there times thereby this voltages can go below or beyond the normal voltage and the result is also a destruction of an appliance which is costly to repair or buy. To solve this problem, a stabilizer is required to supply a stable voltage.
Also, at times, ENEO will seize light and say for days without returning it. This is challenging to entrepreneurs who don't have a generator on their own as products which are easily perishable will get bad ( dairy products).
Note that majority of the fire outbreaks in the country is cause by low or high voltages. To solve this issue, get a generator for your business.
Poor Transport Road Network
Many urban towns in Cameroon are always face with road traffic jams due to poor traffic control and the small size of the road. Most of the roads are just one way and are less accessible. If you are going to sell or buy products from the market and you are being held in traffic, it might make you miss a customer or your appointments.
To solve this problem, the minister of transport and urban development is demolishing houses that are closer to the road side to expand the road in other to avoid road traffic in Doula and Yaoundé.
Some other problems face are, High cost of importation laid on imported goods by custom offices which makes profit margin minimal to entrepreneur. A change in technology is a risk to a business to as well.
What are The Biggest Challenges/ Problems Face by Businesses In Cameroon?
The biggest challenges faced by businesses in Cameroon include:
- Poor infrastructure: Cameroon's infrastructure is underdeveloped, making it difficult and expensive to transport goods and people. This is a major challenge for businesses, especially those in rural areas.
- Slow and bureaucratic bureaucracy: Cameroon's government is slow and bureaucratic, which can make it difficult and time-consuming to start and run a business. Businesses often have to deal with multiple government agencies and regulations, and there is a risk of corruption.
- Lack of access to finance: Businesses in Cameroon often have difficulty accessing finance, especially small and medium-sized enterprises (SMEs). This is due to a number of factors, including high interest rates and a lack of collateral.
- Corruption: Corruption is a major problem in Cameroon, and businesses are often subject to bribes and extortion. This can increase the cost of doing business and make it difficult to compete.
- Instability: Cameroon has experienced political instability and conflict in recent years, which has created uncertainty for businesses and made it difficult to operate.
- Other challenges that businesses in Cameroon face include:
- High taxes and tariffs: Cameroon has high taxes and tariffs, which can increase the cost of goods and services and make it difficult for businesses to compete.
- Informal sector: The informal sector is large in Cameroon, which can make it difficult for formal businesses to compete.
- Lack of skilled labor: Cameroon has a shortage of skilled labor, which can make it difficult for businesses to find qualified employees.
- Limited access to technology: Many businesses in Cameroon do not have access to the latest technology, which can put them at a competitive disadvantage.
Despite these challenges, Cameroon is a country with a lot of potential. The country has a large and young population, a growing economy, and a number of natural resources. The government is also taking steps to improve the business climate, such as reducing bureaucracy and improving infrastructure.
Businesses that are able to navigate the challenges in Cameroon have the potential to be successful. By understanding the local market and investing in the right areas, businesses can position themselves to take advantage of Cameroon's growth potential.
Other Problems Faced by Entrepreneurs In Cameroon
Apart from the above problems, entrepreneurs faced problems like;
- Lack of start-up capital
- The inability to access loans from banks and other financial organizations.
- Inadequate support from government through subsidies.
- Lack of machines to facilitate production process.
Small Business Sectors In Cameroon
The major contributors to the economic growth of Cameroon are ; the Agricultural sector, the servicing industry and the manufacturing sector. Engaging in any of these areas will be profit rewarding. The Agricultural sector is agricultural sector is the largest and employs the highest work force of the country. Farmers are involve is products like; oil palms, banana, cocoa, rubber, tea, sugar cane, coffee and also fishing and livestock farming.
Some business sectors to invest in are as follows;
- Tea production business
- Livestock farming business
- Food processing company
- Transport business
- Plastic production company
- Licensed football agency
- Sport shop
- Outdoor catering services business
- Public address and party rental services
- Restaurant and entertainment spot.
- Food products like row materials
An entrepreneur is someone who is self-motivated in what so ever think he/she is doing and has portion doing it.
Despite the numerous challenges encountered, they are still pushing forward, hoping that they will one day be at a top level of competition. An entrepreneur is an innovator, so nor matter how difficult it is, he will navigate his way out.