Cameroon Government Initiates Sector-Wide Restructuring to Boost Local Construction Industry Performance
The construction sector in Cameroon has historically been a significant contributor to the nation’s GDP, providing employment and driving infrastructure development. However, challenges such as inadequate funding, lack of technical expertise, and inefficient management practices have hindered its growth and competitiveness.
In response to these challenges, the government’s restructuring plan includes a series of measures designed to revitalize the sector:
1. **Increased Budget Allocation**: The government has boosted the reconstruction budget to CFA 35 billion for 2024, a clear indication of its commitment to rebuilding and developing the economically devastated regions of the Far North, Northwest, and Southwest.
2. **Technical Studies and Investments**: Plans are underway to invest CFA 2 billion in 57 technical studies for roads, freeways, expressways, and engineering works throughout the fiscal year 2023. This investment is expected to lay the groundwork for future construction projects and ensure their successful execution.
3. **National Development Strategy**: The ‘Stratégie Nationale de Développement 2020-2030’ (SND30) is a long-term plan unveiled by the government, which aims to invest CFA 37.5 trillion on various flagship plans, programs, and projects until 2030. This strategy underscores the government’s vision for a sustainable and modernized construction sector.
4. **Private Sector Engagement**: Recognizing the importance of private sector participation, the government is encouraging private investments and partnerships. This approach is expected to bring in additional expertise, technology, and capital, which are crucial for the sector’s transformation.
5. **Restructuring Scenarios**: The government is also considering various restructuring scenarios for public companies within the sector. This includes addressing public debts and creating sustainable financial models to ensure the longevity and profitability of these enterprises.
6. **Growth Projections**: According to industry analysis, the construction and public works sector in Cameroon is projected to experience an average annual growth rate of 7.4% until 2028. This growth is a testament to the potential of the market and the positive impact of the government’s restructuring efforts.
The restructuring of the construction sector in Cameroon is a bold move that reflects the government’s dedication to overcoming the current challenges. By implementing these measures, the government aims to create a more efficient, competitive, and sustainable construction industry that can contribute significantly to the nation’s economic development.
The success of this restructuring will depend on the effective implementation of the proposed measures, the collaboration between public and private entities, and the continuous support from international partners. It is a pivotal moment for the Cameroonian construction sector, and the outcomes of this restructuring will likely influence the country’s development trajectory for years to come.
In Cameroon, the poor performance or at least the low representation of local companies in the execution of contracts contrasts for the moment with the policy of import substitution. The reason is that there are few local companies in the building and public works (BTP) sector, in this case, Bun’s, able to compete with foreign companies that generally win the prize in each call for tenders for a major project.
As a result, they are very often subject to glaring delays in the execution of the work entrusted to them. The illustrative case is the construction of 09 metal bridges awarded to 09 of them in November 2023 but whose delivery is still awaited despite the first deadlines having expired at the beginning of last July.
Diagnostic
Because of this situation which impacts the vision of the National Development Strategy (SND 30), the government through the Ministry of Public Works and the sector’s stakeholders reviewed the sector on July 31 in Yaoundé. The diagnosis developed did not reveal any new problems: difficulties in accessing financing, corruption, customs taxation. Constraints to which must be added: the weak financial, organizational and material capacity of local companies as well as “access to quarries located far from construction sites leading to additional costs for companies”.
Restructuring
Faced with this situation, one of the solutions proposed is the “restructuring” of the sector to allow local service providers to conquer market shares in Cameroon and elsewhere. However, the government is not exempt from all responsibility regarding the performance of local companies. Emmanuel Nganou Djoumessi, the Minister of Public Works (Mintp) believes, for example, that the structuring and organization of these companies is accompanied by “quality human and material resources and adequate financial support,” he emphasizes in the columns of the government daily Cameroon.
, the World Bank in its Study on the diagnosis of the vulnerability of SMEs and their accessibility to public procurement published in June 2024 reveals that 53% of business leaders think that the government could play on support for structuring while 30% are looking into support for financing. In this survey, the Bretton Woods institution already gives an overview of the constraints of the sector: “32.3% of companies are disqualified during the call for tenders for technical capacity against 32.8% for financial capacity”, we read.
Another grievance falling within the competence of the State is the non-payment of statements on time. This bottleneck which affects expatriate companies also affects Cameroonian companies which do not already have substantial financial resources. Also to breathe new life into this sector of activity, the public authorities are already thinking – subject to consideration in the 2025 finance law – about easing customs charges for construction equipment. Finally, they also feel the need to set up a consultation platform with companies and financial institutions.
