Index trend
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Expropriation Risk: 67 67 66 66 ►Political Violence Risk:66 66 66 66 ►Terrorism Risk:63 63 63 63 ►Exchange Transfer and Trade Sanction Risk: 64 64 64 64 ►Sovereign Default Risk:73 65 65 73 ▲
Overall Risk Temperature: 67 (Medium high 2) TREND ▲
Special topic: Gray zone aggression
Degree to which the country relies on outbound gray zone action to achieve its strategic objectives1 = Not at all5 = Gray zone action is a core tactic
1
Impact of inbound gray zone attacks on the country1 = Negligible impact5 = Significant impact on economic growth and/or political stability
Cameroon is among several African countries that have been a target of Russia’s disinformation campaigns in a bid to boost Russian political and commercial interests across the continent at the expense of Cameroon’s traditional Western allies, notably France. The Kremlin-backed disinformation campaign in Africa hit the spotlight in October 2019 following the removal of several Facebook accounts linked to Yevgeny Prigozhin, the now-deceased boss of the mercenary Wagner Group. These accounts were operating in eight African countries, including Cameroon, where the steady rise of Russia’s influence culminated in the signing of a military cooperation agreement in April 2022 covering international defense and security policy as well as training troops and military education, among others. At the start of 2021, another disinformation vehicle emerged — Russosphère — made up of several social media groups on different platforms, describing itself as “a network in defense of Russia.”
The disinformation campaign has led to a sharp rise in anti-French sentiment in many former colonies, including Cameroon. The campaign was partly to blame for the momentum behind a popular mobilization against the France-backed currency used in both the West African and Central African common monetary zones. While there are no indications that Cameroon — which has the largest economy in the Central African zone — is preparing to ditch the French-backed currency, a move in that direction (unlikely under the current administration) would undermine foreign investment, as any new currency will depreciate significantly.
Cameroon itself has no history of systematically undertaking gray zone actions against another country. The country’s limited capabilities coupled with domestic threats, such as the ongoing civil strife in the western part of the country and the security threat posed by Islamist armed groups in the Far North region, will likely deter the government from engaging in gray zone activities.
That said, it has not yet been established whether the government was an unwitting accomplice or deliberately turned a blind eye to Prigozhin’s group using the country to push out disinformation to other French-speaking countries.
TREND ►Judicial independence in Cameroon is compromised by endemic corruption and political interference. The country ranks 140 out of 180 on the 2023 Corruption Index by Transparency International. In local courts, foreign investors are unlikely to secure victory over commercial disputes against a politically connected domestic investor or a government entity, due to corruption and political pressure.
By law, land can be expropriated for public utility, with compensation paid to the affected parties. An ongoing dispute between Cameroon and Sundance Resources over the Mbalam-Nabeba iron ore project highlights the tendency of the government to take over concessions and refuse to provide full compensation.
TREND ►
In 2025, Cameroon will hold presidential elections with President Paul Biya poised to extend his stay in office. The 91-year-old leader, who has been in office for over four decades, is showing no sign of stepping down. While Biya has yet to confirm whether he will seek reelection, his ruling Cameroon People's Democratic Movement (CPDM) has no objection to the president contesting the elections.
The 2008 constitutional amendment removed term limits, making it possible for Biya to prolong his time in office. Constitutionally, the president of the senate is required to organize an election within 120 days (in which he cannot participate) should a vacancy in presidential power occur. Without a clear successor at present, a sudden departure from office by Biya would almost certainly trigger a succession battle within the CPDM. That could cause policy paralysis and severe disruption to executive branch operations. An uncertain transition could lead to a military intervention.
Nigeria-based Islamist group Boko Haram and its offshoot Islamic State of West Africa Province continue to pose security threats to Cameroon’s north, where they have been waging an armed campaign since 2014. After a drop in attacks in 2022, last year saw a rise with an attack in August in Darak (a fishing island on Cameroon's northern border with Chad and Nigeria) leaving 12 people dead. The Islamist groups have yet to expand their attacks beyond this region, posing limited threats to Yaoundé and Douala, the country’s political and commercial capitals, respectively.
In the southwest of the country, separatist militants are engaging in indiscriminate attacks on civilian, business and military targets. These attacks include theft of cargoes and burning public infrastructure such as schools, markets and post offices. These Anglophone militants appear increasingly to be copying Boko Haram’s tactics, including targeting school children; using improvised explosive devices; and kidnapping civilians, state officials and local businesspeople for ransom to raise funds. Nonetheless, collaboration between Anglophone militants and Boko Haram remains unlikely because of their differing religious beliefs and ideologies.
Cameroon’s trade sanctions risk remains low. The risk will increase in the event the country tries to help Russian firms and individuals evade sanctions imposed by Western governments. Despite Biya’s rapprochement with the Kremlin, there are no indications of collusion in that regard.
In terms of exchange transfer risk, Cameroon is bound by the foreign exchange regulations and directives coming from the bloc’s Bank of Central African States (BEAC). A foreign currency exchange regulation that took effect in 2019 has significant implications for commercial transactions and creates a variety of risks, including around onshore bank credit risk, exchange rate, convertibility and transferability. The regulation requires companies to seek authorization from the BEAC before opening offshore current accounts and to renew every two years the permission to maintain foreign currency accounts in the Economic and Monetary Community of Central Africa (CEMAC) region.
However, the central bank granted several concessions to resident companies operating in the mining and hydrocarbons sectors as the new foreign exchange regulation came into effect. These concessions significantly reduce the risk of capital controls and exchange transfer restrictions for the extractives industry — a major revenue earner for CEMAC countries.
TREND ▲
Cameroon’s focus for financing of infrastructure is China, the country’s largest creditor. So far, Cameroon’s public debt is among the lowest in the CEMAC region and is projected to remain stable until 2027. The country’s debt is expected to remain below 45% of GDP until 2027, which is well below the limit of 70% set by the central bank of CEMAC.
Despite Cameroon’s low debt-to-GDP ratio, the country has missed a few small payments in 2022 and 2023, which indicates the underlying weakness in the country’s public finance management. In 2022, the government was late four times to make debt service payments to Deutsche Bank Spain, a fact that came to light in July 2023. The revelation led to a downgrading in July 2023 by rating agency Moody’s, while Fitch Ratings did not consider the late payments as a default because the delays did not exceed a 30-day grace period.
Another late payment, to the European Investment Bank, occurred in August and September 2023 but was not significant enough to warrant further downgrading. The main threat to Cameroon’s debt repayment ability is the risk of political destabilization driven largely by the lack of a credible plan to succeed Biya in a country that has not witnessed a transfer of power in over four decades.
