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10 November 2009 

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Corruption in Cameroon Deters Investment, Slows Growth


10 November 2009

 

The government of Cameroon has launched a new attack on corruption. It has arrested and jailed more than 100 former ministers, public administrators and state corporation managers -- charging them with embezzling public funds and plundering national resources.

Experts say corruption is causing huge economic losses to the state. Tax revenues and foreign aid end up in private pockets. As a result, public investment budgets are dropping, the cost of living and doing business is rising and development has slowed.

Experts say Cameroon is blessed with vast economic potential and with a variety of human and natural resources. It’s one of the best-endowed primary economies for exporting commodities like bananas, timber, minerals and oil. 

But widespread malpractice has often named Cameroon as one of the world’s most corrupt countries and is now severely curtailing investment and growth.

A magistrate and member of the National Anti-Corruption Commission, Fon Isaac Chafah, says "It’s not easy to set up a business in Cameroon, and when you eventually [do], at times you find yourself parting with 10 percent of your capital to get your business going.”

That kind of atmosphere discourages foreign investors, Chafah says, adding they won’t go to a country where they’ll spend all their capital bribing people.

As a result, the World Bank’s Doing Business in Africa report and some global anti-corruption watchdogs often rate Cameroon as a risky investment destination.

“Our country has been disgraced on two separate occasions by Transparency International as the most corrupt country in the world,” Chafah says.

After pressure from donors and the international community, the government has made the fight against corruption part of its political agenda. It has set up a National Program on Governance and specialized anti-graft units like the National Anti-Corruption Commission and the National Agency for Financial Investigation.

It’s also reactivated the Superior State Audit to control public funds and it’s created Operation Sparrow Hawk to identify suspects and hand them over to the courts for trial.

But observers say that in reality, not much is changing.

Garga Haman Adji, a politician, former government minister and member of the National Anti-Corruption Commission, says more needs to be done.

“I’ll be satisfied only by results; I cannot say it’s OK, so I’m waiting.”

The National Anti-Corruption Commission
under the direct authority of President Paul Biya was created in 2007. It's undertaking a nationwide awareness campaign to change habits in all segments of society.

Experts say the initiative is laudable, but belated. 

Olivier Behle, the president of the Cameroon Business Leaders Union (GICAM), says a coalition is needed between the commission, civil society and private business. He says an all-out war against corruption would lift the bad label, attract foreign investment and make the Cameroon economy more competitive. Lacking that, he says, unemployment, underdevelopment and insecurity will continue to rise.

Eight years after Transparency International last ranked Cameroon the world’s most corrupt country, the problem is still widespread.

In 2007 a survey by the non-governmental German Technical Cooperation, GTZ, and the Cameroon business leaders union, GICAM, among others, showed that corruption is severely hampering economic progress.

Of over 1,000 business managers polled, 49 percent acknowledged paying bribes to dodge taxes, while 36 percent said they spent up to five percent of their profits bribing government officials to get public contracts and other advantages.

Experts blame the situation on cumbersome procedures for creating businesses, a complex taxation system, various administrative bottlenecks, small salaries, impunity and what they call unpatriotic behavior.

Foreign aid that ended up in private bank accounts abroad was intended to boost agricultural production, fight HIV/AIDS and build hospitals, schools and roads. Among the sectors rated the most corrupt by watchdogs are the customs department, the taxation administration, the army and police, the judiciary, the media and elections management structures.

Experts say corruption may be reduced by improving the existing regulations for customs and investment

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