(Business in Cameroon) – Businesses in Cameroon increased their investments by 19% in 2023, according to a report released on September 10 by the National Institute of Statistics (INS). However, despite this rise, the deterioration of production equipment continues, increasing from 59.6% in 2022 to 60.1% in 2023, the document noted.
This means that even though companies put more money into their operations in 2023, —up from a 13% increase in 2022—most of the equipment used for production is still in bad shape. This ongoing issue, often due to maintenance problems, usually leads to lower productivity and various economic problems like decreased sales, shortages, and temporary job losses.
On a positive note, 2023 saw the highest level of investment spending since the recovery began in 2021, following a slowdown between 2018 and 2020. The COVID-19 pandemic, particularly in 2020, caused major disruptions globally due to lockdowns.
Bank Loans Driving Investment
The rise in investment was mainly driven by businesses in two key sectors. The INS report highlights that investments in the primary sector (up by 86.9%) and the secondary sector (up by 36.9%) were particularly strong. This trend is also reflected in a foreign trade report released on May 4, 2024, which shows a 26% increase in spending on imported equipment and machinery in 2023 compared to the previous year.
“Mechanical and electrical equipment are essential for the country’s economic growth. Imports of these items made up 13.2% of all import spending in 2023, totaling CFA656 billion, which is a 26.5% increase from 2022. This demonstrates Cameroon’s commitment to improving its technological capabilities,” the report noted.
Furthermore, this surge in investment came alongside an increase in medium- and long-term bank loans, which are better suited for funding infrastructure and production projects. According to the 2023 activity report from the Bank of Central African States (BEAC), medium-term loans in Cameroon grew by 4.9% from 2022 to 2023, while long-term loans saw a significant 48.2% increase during the same period.
