Special Supplement: Cameroon January 2912 1

2 January 2012 Special Supplement: Cameroon

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HISTORICAL OVERVIEW

Cameroon has a rich historical heritage and cultural legacy that have endowed its citizens with an enthusiastic vision and commitment to the country’s future potential and opportunities.

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Grounded in Tradition with a Vision for the Futureocated in the Gulf of Guinea, The Republic of Cameroon is the heart of the Central Africa region. The country is also the region’s major

economic powerhouse, and the leading ad-vocate for addressing the region’s concerns in various international forums, especially on the issues of regional security and the impact of global climate change. In addi-tion, Cameroon also serves as the natural gateway and the regional trade hub for its five neighboring countries in Cen-tral Africa (Chad, The Central African Repub-lic, Congo Braz-zaville, Gabon, and Equatorial Guinea).

Cameroon is endowed with an abundance of natural resources and a highly educated and skilled work-force. Coupled with these assets, the coun-try is the region’s undisputed destination of choice for foreign direct investment and

the primary market entry portal for commercial business interests. With an impressive and visionary development strategy, Cameroon is currently playing a more proac-tive role in leading the region’s initiatives to improve its infra-structure and industrial base, and to strengthen the region’s agenda

for economic integration and progress.

In 2010, Cam-eroon was one of 17 African coun-tries that observed their independence anniversary, which was a celebratory occasion marking a milestone in the continent’s historical evolution, from for-mer colonial posses-sions to some of the world’s fastest grow-ing developing and

emerging market economies. In celebrat-ing its 50th Independence Anniversary in May 2010, it was both a time for celebra-tion and a mandate for serious reflection

on the country’s shortfalls, challenges, and progress.

With Africa’s increasing influence in geopolitical affairs and its strategic role in today’s global economy, Cameroon’s forward-looking initiative to evaluate its development track record was a timely and necessary endeavor—and an oppor-tunity to reassess, refine, and strengthen the country’s development model for the challenging years ahead. It was on this oc-casion that the head of state, President Paul Biya, addressed the country’s development concerns, and unveiled the government’s vision and strategy for moving Cameroon forward to middle market status by the year 2035 (Cameroon Vision 2035).

ecause of the diversity of its geography and the tapestry of its multi-ethnic population, Cameroon has long been celebrated as a nation that represents “All of Africa” in one

country. According to historical and archeological evidence, humans have inhabited Cameroon for the past 50,000 years. During its pre-colonial history, the region was host to several ancient African kingdoms and cultures. Throughout its early history the region has experienced a steady flow of migrations by various ethnic groups from outside the region—and today Cameroon is recognized as one of most diverse societies on the African continent.

Early historical timelines indicate that the first foreign visitors to reach the shores of Cameroon were the Phoenicians, subse-quently followed by Portuguese and Dutch explorers and traders. During the European scramble for African colonies, the region was originally colonized by the Germans, who were later forced to relinquish their African colonies after WWI to other Euro-pean powers—including Cameroon, which came under the joint colonial administration of the French and the British. Cameroon eventually gained its political independence from colonial rule in 1960.

Since gaining its independence several decades ago, like most former African colonies, Cameroon was confronted with a number of daunting challenges to building a new nation

in the shadow of the country’s past circumstances. These challenges included an undeveloped economy, inadequate infrastructure, and weak public sector institutions. However, the people of Cameroon have retained, transformed, and engaged their unique traditions and cultural values with a strong sense of purpose, foresight, and fortitude. And one of the most consistent and favorable narratives in the nation’s short history has been the perseverance and can-do spirit of the Cameroonian people. In addition, the country has established a track record for political stability and a slow but steady march towards progress. Today this young and vibrant African nation is accel-erating its development strategy and process,

and it is on the threshold of becoming one of the continent’s fastest growing emerging middle market economies.

Cameroon is

recognized as one

of most diverse

societies on the

African continent.

President Biya (center) inspecting agriculture production

Wearing the National Colors with Pride

A Traditional Model Village

A Traditional Horse Parade

“With an urgent sense of

purpose and a vigorous

determination to excel in

its endeavors, Cameroon

is by far the leading driver

of economic development

and progress in the Central

African region.

L■ Population: 19.5m■ Urban population: 58%■ Life expectancy: 53■ Ethnic groups: Cameroon highlanders, Equatorial Bantu, Kirdi, Fulani, Northwestern Bantu■ Literacy: 68%■ Mobile phone penetration: 37.9%■ Government expenditure as % of GDP: 3%

2008 2009 2010 2011

2.92

2.62.9

23.73 22.19 21.88 22.49

GDP growth %

GDP $bn

Edited by: Shelvin D. Lo gmiren Karen DickersonAbout the Editors: Shelvin D. Longmire is a Washington-based international consultant, and he currently serves asthe US Director for Afrique Expansion, Inc. He is also the former Managing Director of the Global Africa Media Group. Karen Dickerson is a leading media relations and strategic communications consultant, and her clients have includedthe Corporate Council on Africa and the World Bank Group.

The full content and views expressed in this supplement are exclusively the responsibility of the editors; and do not reflect or imply any endorsement, concurrence, or liability of The Washington Diplomat.

Designed by: Claire Lesesne www.jandcdesigns.com

CAMEROON

■ Current account as % of GDP: -3.9%■ Aid flows: $524.6m■ FDI: $337m■ Main export: Oil

A Group of Traditional Dancers

Special Supplement: Cameroon January 2912 3

Cameroon is on the Move

With the new Cameroon Vision 2035 development strategy in hand, over the past year the nation’s key stakeholders have enthusiasti-cally and vigorously redoubled their commitment to moving this agenda forward in a timely and substantive manner. In order to bring these initiatives to successful fruition over the next 24 years, at the direction of Presi-dent Biya, the principle government institutions have embarked on a broad-based and ambitious approach to accelerating the country’s progress in several key eco-nomic sectors within specific timelines.

Cameroon’s comprehensive development plan is driven and prioritized by a needs-based agenda with a renewed commitment to several primary sectors, including, but not limited to, improving the nation’s physical infrastructure; building and expanding the industrial base; strengthen-ing the governance and capacity of public institutions; improving and transforming the nation’s business climate;

and enhancing the delivery of primary social services and tangible benefits to the country’s citizens. Although all of these sectors are being simultaneously addressed, the infrastructure and industrial development initiatives are on the front burner—as highlighted by a partial list of select programs and projects outlined in this brief, in no particular order of precedence.

After a half century of inde-pendence, each new day is the beginning of Cameroon’s future—a nation with a clear vision and strategy to move to the next level in the 21st century.

Cameroon is currently challenged by an inadequate and inconsistent supply of electrical power, which has a critical and negative impact on the nation’s economic and industrial development agenda. The country’s current electrical power supply is estimated at 1,022 megawatts (MW), rep-resenting a 400 MW shortfall in its current demand for power. To address this deficit, the Cameroonian government has launched several projects to increase the nation’s production capacity and electrical output to 3,000 MW by the year 2020.

In the interest of managing its power and energy sector in the most cost effective and efficient manner, the government of Cameroon decided to privatize this sector to ensure that the best corporate practices were adapted and applied to this enterprise. In June 1996, the government launched an intense search for a strategic partner with the financial resources, technical capacity, and international industry presence to assist the country with improving and modern-izing its power sector. After a five-year search, Cameroon Electric Corporation selected AES Corporation, a US energy firm, as a strategic partner with SONEL, the government-owned power company. Subsequently, this partnership became the Cameroon-based AES SONEL Cor-poration, which is currently the exclusive developer and supplier of electrical power in the country.

Leveraging the Region’sHydropower Potential

In order to meet the current and projected demand for electrical power in the indus-trial, commercial, and residential sectors, the initial priority for power infrastructure is focused on building a number of new dams that will capitalize on the region’s enormous

hydropower potential; especially since next to the Democratic Republic of Congo (DRC/Congo), Cameroon is host to the second largest river basin network on the African continent. A partial list of these projects includes but is not limited to the following:

• TheLomPangarDamProject.Thismassive mega-project will increase the power supply in the Sanaga Basin region by 450 MW to 618 MW. The project will be supervised by the French engineering firm, Coyne et Bel-lier. It will be developed on an expedited priority basis with an expect-ed completion date within 38 months of start up, at an estimated cost of 150 billion CFA francs. Building this facility will also gener-ate at least 1,000 direct jobs for the local workforce. In addition, the project will also increase and regulate the flow of the Sanaga River, enabling the development of the Nachtigal Dam which is expected to gener-ate an additional power output of 330 MW. Finally, there is a social corporate citizen-ship component to the Lom Pangar Dam Project, valued at 44 billion CFA francs, that requires the building of waste manage-ment systems, schools, and providing skills training for local labor. It will also result in other spin-off initiatives to develop and modernize the fish farming industry, agri-culture, and several other private sector rev-enue generating enterprises in the region.

• TheNachtigalPowerPlant.Thisisaspin-off of the Lom Pangar Dam Project, and is spearheaded by a Canadian firm, Rio Tinto Alcan—and involves building a hydro-electric plant with the capacity to generate 230-250 MW of electricity; and also contrib-uting to an increase in the production capac-ity of the nearby Edea Aluminum Smelter Plant, from a production tonnage of 100,000 to 400,000 tons annually. This power facil-ity is tentatively scheduled for completion between the 2016-2017 timeframe.

•TheMemve’eleDam Project. Construction of this hydro-electric plant on the Ntem River will increase the country’s power supply by an ad-ditional 201 MW, with a high-volt-age transmission line linking the site to Ebolowa and the Capital City of Yaounde.

An agreement was signed in September 2009 with a Chinese engineering firm for the development and construction of this facil-ity, at an estimated cost of 365 million CFA francs, financed by the China EXIM Bank.

Exploiting Natural Gas Resources — Kribi Power Plant Project

Currently, Cameroon depends on its hydro-power to supply 95 percent of the nation’s electrical power needs. However, the country is also focused on diversifying this sector, and the Kribi Gas-fired power plant project will be the nation’s first venture to harness its natural gas resources. This plant is scheduled to be commissioned in 2013,

and when fully operational it is expected to generate 216 MW of electricity, scalable to 330 MW. The plant will also be the largest natural gas power production facility on the African continent.

Valued at 13.64 billion CFA francs, financing for the Kribi plant was structured with the support of a loan from the World Bank, and partial risk guarantees from the International Finance Corporation (IFC); and it will offer local Cameroonian banks, for the first time, an opportunity to participate in a long-term financing venture in the country’s electricity sector. In addition, the IFC is coordinating the participation and support for this project from several other international institutions—including the African Development Bank, the European Investment Bank, the Central African Development Bank, the Netherlands Development Finance Company, and the French Promotion and Investment Company for Economic Cooperation.

The project will be supervised by the Kribi Power Development Corporation (KPDC); an organization established under a joint partnership between the government and the US-based AES Corporation. In addition, the gas-powered engines for the plant will be supplied and installed by Wärtsilä, a Finn-ish firm that is a global leader in providing decentralized power generation solutions.

The Kribi Power Plant will provide a reli-able supply of electricity to an estimated 163,000 Cameroonian households or ap-proximately 815,000 people, 50 percent of whom are women. In addition, 50 MW of the plant’s capacity will be directed to Alucam, a major aluminum smelter in the region. Natural gas for the plant will be supplied by the offshore Sanaga South gas field, the first gas field under development for commercial purposes in the country.

Building and Improving Physical Infrastructure Delivering Power to the People

Generating Power for the People

4 January 2012 Special Supplement: Cameroon

Developing Transportation InfrastructureA New Maritime

ProjectThe Kribi Deepwater

Sea Port Project

Construction of the Kribi Deepwater Sea Port represents one of Cameroon’s most progressive ventures in the region,

and one of the largest transportation infrastructure mega-projects in Africa. President Biya officially kicked this project off in October 2010, with the first ship expected to roll into the port by 2014. The project is valued at 5 billion CFA francs, and will greatly enhance the country’s position as the leading gateway and international trade hub for the Central Africa region. The Port of Kribi will be capable of hosting 60,000- to 300,000-ton ships, with 17-24 meters in draught, therefore greatly exceeding the capabilities of the Port of Douala, which is currently the region’s major port but has a limited capacity for hosting vessels with 6 to 7 meters in draught.

This futuristic port complex will ultimately cover 75 kilometers of the country’s coast-line (from Kribi to Campo), and its facilities will serve as the region’s primary maritime and shipping gateway to the world. The port’s mixed-use container terminal will process approximately 400,000 containers per year, versus the current capabilities of the Port of Douala, which has a maximum capacity for hosting 250,000 containers per year.

The total capacity of the Kribi port facility will be capable of handling three to four million tons of cargo per year. As a side note, the aluminum terminal alone will pro-cess an additional two to three million tons of cargo annually, which will be managed by the Cameroon Petroleum Deposits Corporation and the Indian-based firm, Angeli-ue. In addition, the new port facility for shipping iron ore will be capable of handling about 3.5 billion tons of ore annually that will be brought into the facility by a new rail system from 500 kilometers away in Mbalam.

Once the Kribi port is fully operational, shipping time between Cameroon and Western Europe is expected to be less than 12 days, 25 days from China, and nine days to Bra-zil. The frequency of shipments will be greatly increased, the port will attract addi-tional traffic in the region, and it will serve as the major transshipment hub in Central Africa. In addition, the Kribi port will drastically reduce container congestion and the timelines for processing cargo and transshipments in the region, especially to the country’s landlocked neighbors such as Chad and the Central African Republic.

The Port of Kribi will also stimulate other spin-off projects in a variety of cluster industries. For example, there is a new aluminum production facility in the pipeline to be built by Canada’s Rio Tinto Alcan Group, which will produce an estimated output of 400 tons of aluminum per year, with the potential to increase production to one mil-lion tons a year. Additional plans include the construction of a new liquefied natural gas plant that will be built by a French partnership between Société Nationale des Hydrocarbures (SNH) and Gaz de France.

Finally, the construction phase of this mega-project will generate over 40,000 jobs, in-cluding at least 20,000 full-time positions after the port becomes fully operational. In addition, the project is already spinning off a number of other infrastructure ventures, such as new roads, highways, and railway networks throughout the region.

New RoadInfrastructure

Cameroon’s commendable initiatives to improve and expand its surface transportation infrastruc-ture is in full swing, and the development and construction of new road networks and highways

throughout the country and the region is moving forward at a rapid pace—as empha-sized by the following projects.

The Wouri Bridge Project-Douala This long-awaited project to build a new bridge over the Wouri River is being hailed as a venture that will greatly improve the transportation infrastructure of the City of Douala, the nation’s principle commercial capital. A bridge was originally constructed over the Wouri River in 1954, but over the years it has exceeded its capacity to handle the cur-rent traffic congestion, resulting in serous safety concerns that the bridge has reached its saturation point. This second bridge is expected to greatly improve the city’s commercial activity and enhance its position as a competitive economic and regional trade hub.

In short, building a second bridge over the Wouri River will improve traffic flow and safety, provide road and rail access to the region’s industrial zones, and extend the transportation supply chain to Cameroon’s interior and to the to surrounding countries in the sub-region. Approximately 850 meters in length, the bride will have five lanes for automobiles and two railway lanes, and will be completely integrated into a new road network. This project is expected to generate hundreds of new jobs in the region of Douala, and has a price tag of 100 billion CFA francs. It will be jointly funded and sponsored by the French Development Agency and the government of Cameroon.

The Yaounde-Douala Highway ProjectThe timely Yaounde-Douala Highway Project is long overdue, providing a reliable and modern connection between Cameroon’s political and commercial capitals have been a pipe dream for decades. The highway’s transportation network will also include the city of Bafoussam, providing more efficient ground transportation between the coun-try’s three largest cities—as well as serving as a major boost to the nation’s interna-tional trade and regional supply chain infrastructure.

The government has already confirmed a preliminary agreement with a Chinese firm to begin the first phase of the Yaounde-Douala Highway, which will be a 70 km two-lane road stretching from Yaounde to Douala. The total distance of the new highway will cov-er 250 km and is expected to cost 400 to 500 CFA francs. This new highway will provide a welcome relief to the heavy and congested traffic conditions between these two major cities, greatly improving safety conditions for the movement of travelers and goods.

The Nigeria-Cameroon Highway ProjectCommitted to increasing and improving trade opportunities with neighboring countries throughout region, the Nigeria-Cameroon Highway initiative is being promoted as a multinational transport facilitation project. The highway project will provide a 433 km corridor and modern road connection between Bamenda in northwest Cameroon, to Enugu in eastern Nigeria. Construction work on this project began in June 2010, and is scheduled for completion in 2013. It is anticipated that this highway will enhance cooperation and increase trade between the two countries—in addition to facilitating increased regional trade and economic integration between the two major trade blocks in the region, the Economic Community of Central African States (ECCAS) and the Economic Community of West African States (ECOWAS).

The Nigeria-Cameroon Highway Project is jointly funded by equal contributions from Nigeria and Cameroon; with substantial support from the African Development Bank, the World Bank, and the Japanese International Cooperation Agency. At a cost of US $500 million, this project is also an integral phase of the ongoing initiatives across the continent to build the Trans-African Highway network. In addition to connecting with Cameroon, the Nigerian arm of this project will eventually cross the continent and con-nect Lagos, Nigeria, with Mombassa, Kenya. This has been a long-standing ambition on the continent since the early 1980s—to build a series of road networks in Africa from west to east, and from Cairo to Cape Town.

Building Industries Limbe Oil Shipyard Industrial Development Project Although not directly associated with the Kribi Deepwater Sea Port Project, the Limbe Oil Shipyard Project is positioned to be a direct beneficiary of this venture. This facility will be constructed in Limbola, three kilometers from the seaside resort of Limbe, and developed by the Cameroon Shipyard and Industrial Engineering firm. The Limbe Shipyard’s primary objective is to provide quality maritime maintenance, logistical, and other support services for customers operating in offshore oil fields in the Gulf of Guinea.

Infrastructure for the Limbe Shipyard site is gradually taking form, such as the dock and floating platforms that have been operational since 2007. The project is also expected to generate a total of 3,000 new jobs in the region, as well as 2,000 indirect jobs; in addition to attracting additional foreign direct investments to Cameroon’s economy.

A major geopolitical consideration that initiated this project was the US concern regarding potential instability in the Persian Gulf, and the search for an alternative and more reliable source of oil to supply the nation’s energy needs. As the second largest supplier to the US, the oil producing countries in the Gulf of Guinea were a natural focus of this initiative—with an interest in increasing oil exports from the region to the US from 15 percent to 25 percent over the coming decades. It was this increasing US interest that served as a catalyst for new industry-related ventures in the region. And in 1998, Cameroon Shipyard and Industrial Engi-

neering immediately seized upon an opportunity to provide various maritime related services to an expanding customer base, i.e., rehabilitating oil rigs, oil platform maintenance, and shipyard services for vessels and other equipment-related issues to the offshore oil industry.

Because of the scale, reach, and projected capabilities of this venture, the Limbe Oil Ship-yard Project is being hailed as Cameroon’s second largest infrastructure project—the first being the Chad-Cameroon Oil Pipeline project. The Limbe project was initially launched in 2005 with funding support from the African Development Bank, the Islamic Develop-ment Bank, and the Central African Development Bank; with significant participation from the Danish, British, German, and Cameroonian governments, among others.