Cameroon ranks first in terms of business creation, according to the 2016 Global Entrepreneurship ranking. This contrasts with the often decried business climate.

Poor student according to the Doing Business 2016 ranking where it ranks 172nd out of 189 economies, Cameroon is rather better student in the Global Entrepreneurship 2016 ranking. Cameroon therefore occupies the first place in the world as far as business creation is concerned, revealed Protais Ayangma. It was during the last edition of the Cameroon Business Forum which was held in Douala. According to the latter, with a rate of business creators estimated at 37.4%, Cameroon ranks ahead of Uganda which totals 35.5%, Botswana (32.8%), while the European Union has 6%. The enthusiasm of Cameroonians in the creation of businesses is therefore growing. Laurent Serges Etoundi Ngoa, Minister of Small and Medium-Sized Enterprises, Social Economy and Crafts (Minpmeesa), also reveals that between 2010 and March 2015, 42,720 companies were created in Cameroon. The Minister was already specifying a few months earlier, during the third edition of the National Days of SMEs which took place in Yaoundé, that the Centers for Formalities and Business Creation (CFCE) registered a total of 11,498 businesses created exclusively for the year 2014. According to a report by Minpmeesa, the trend is increasing. In 2010, for example, 712 companies were created, while in 2013, 9,706 companies were created in the CFCE. However, these companies are characterized by a very low life expectancy, barely exceeding the five-year mark.

Most companies are struggling to move from subsistence to market economies. This is therefore one of the reasons why SMEs represent 90% of the economic fabric for a participation in GDP estimated at only 34%, according to figures from the National Institute of Statistics (INS). With a staff of between 21 and 100 individuals, their annual turnover net of tax does not exceed one billion. Among the enterprises listed by the INS, 65,986 (74.9%) are considered to be very small enterprises, 16,937 (19%) are small enterprises, and 4,499 (5.1%) are medium-sized businesses. There are only 722 large enterprises, or 0.8%. This is due to a set of factors that hinder the development of SMEs.

 

Difficult access to finance remains the main difficulty faced by SMEs. Banks access 69% of African SMEs’ funding requests, while the global average is 81%, according to Abdoulaye Bio Tchané, PCA of the African Guarantee Fund (AGF). With the exception of funding problems, there are difficulties of various kinds, some of which are managerial or cyclical. In particular, the weak structuring of the sectors, the absence of incentives for informal savings, the preference for liquidity, significant hoarding, highly personalized infrastructures, the launch of activities by simple imitation, poor bookkeeping, and therefore gaps in financial management, insufficient knowledge of the market and insufficient culture of meeting commitments. Besides this, we must add an inappropriate legal environment, which is not very restrictive towards debtors.

Read more on: http://quotidieneconomie.com/index.php/actu/aujourd-hui/1958-entrepreneuriat-quand-le-cameroun-domine-le-monde

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