Introduction

Back in July, the President updated Cameroon’s investment laws with an ordinance that provides better guardrails to ensure that investments truly lead to economic development. There are more stringent requirements for investors to prove the number of new jobs created, as well as broad but important requirements for skills and technology transfers. Ordinance No. 002 of 18 July 2025 functions as a revision to Cameroon’s foundational investment framework, primarily focusing on attracting Foreign Direct Investment (FDI) and stimulating local growth.

Let’s look at what the ordinance says, how it differs from previous investment laws, and core differences between fiscal incentives and prudential regulation. On the whole, CEPI agrees with the update. Investors who create jobs and prove skills, and transfer technology transfers should benefit from fiscal incentives. Not the other way round! Free markets will thrive with clarity and regulatory certainty and not vagueness.

1. Prioritizing Sectors for Development Sends a Better Signal to Potential Investors

The Ordinance’s contents primarily revolve around fiscal and customs incentives granted to eligible investors across two main phases: the Installation Phase and the Operation Phase. During the Installation Phase (typically 5-7 years), investors are granted exemptions or reductions on duties for imported equipment, materials, and infrastructure components, while the Operation Phase (typically 5-10 years) grants exemptions from various taxes, such as corporate income tax or business license fees.

One important thing to note is that the Ordinance defines and prioritizes specific economic sectors—such as resilient infrastructure, agro-industry, technology, and manufacturing—which align with the National Development Strategy (NDS30) and are key targets for securing the maximum length and breadth of these generous state incentives. These sectors will provide the groundwork for Cameroon’s industrialization and will allow manufacturing to grow from 17% of GDP to something more substantial. With technology set to transform manufacturing and automate more jobs that were traditionally held by humans, the focus on technology signals a broad-based preference to support tech jobs. Of course, technology in this case does not mean chips and semiconductors, but assembly-type jobs that will boost light manufacturing and could boost locally-made cars, phones, and intermediate goods. Of course, China will be first in line to build manufacturing plants for its many manufacturing companies, but it is equally important to think of ownership structures that promote local investor and citizen participation.

Far from advocating an investment a la Chinoise, a 20-40% local ownership will ensure that retained earnings and dividend payments lower huge capital outflows. Even if it is acceptable that 20% of retained earnings are reinvested (Though this is not applied in practice), such ownership structures will ensure that financial value is retained in Cameroon. While we take the next decade to get there, there should be more logical frameworks to allow citizen participation, and investment funds could be tapped to invest in such projects where there is certainty that such projects will generate long-term value.

II. How the Ordinance Differs from Previous Investment Laws

The 2025 Ordinance is not a radical break from previous iterations of Cameroon’s investment charter; rather, it is an evolutionary update aimed at enhancing competitiveness, streamlining administrative procedures, and recalibrating the incentives (e.g., adjusting the duration of tax breaks or refining priority sector definitions).

The key difference is often found in the focus areas: recent updates place heavier emphasis on local content requirements, job creation for locals, and—most recently—on projects that tangibly support the green transition, in line with global ESG trends. Previous laws were generally more focused on pure volume of investment and basic industrialization, whereas the 2025 law likely sets a higher, more sophisticated bar for environmental and social responsibility to qualify for the most substantial fiscal incentives.

“The recent ordinance stresses that at least 50% of inputs must be obtained locally – excluding electricity, communications, and human capital. This will incentivize the development of local value chains, and evidence of jobs and technology transfer means investors will have true skin in the game. This is a radical break from previously exploitative models of investment”.

III. The Core Difference: Fiscal Law vs. Prudential Regulation

The most profound divergence is not between the 2025 Ordinance and its predecessors, but between the Ordinance (Fiscal Law) and the COBAC/BEAC Green Window (Prudential Regulation), according to CEPI’s findings. They represent two separate, yet complementary, state tools for steering capital:

• Investment Ordinance (The “Front Door” Fiscal Incentive): The law focuses on tax incentives for inputs of equipment that will directly impact investors’ profitability. If factories are importing equipment from the EU or Asia, it is only fair to reduce their operational cost through tax holidays. This makes projects much more attractive for investors who have to fork out huge amounts of capital and sometimes earn a return in 5-10 years.
• COBAC/BEAC Green Window (The “Back Door” Prudential Incentive): This regulatory mechanism, driven by the Central Bank, impacts the commercial bank’s profitability. The 2018 investment law is very much focused on addressing climate change while pursuing development. We should congratulate policymakers – with restraint – as the new investment law fits into COBAC’s green window. In essence, COBAC treats climate-aligned loans differently, making it cheaper for banks to give out environmentally-friendly loans without failing regulatory requirements. The financial system is adapting to the changing needs of the economy and climate change; this law reinforces that.

“In essence, the Ordinance makes the project more profitable for the entrepreneur, while the Green Window makes the loan more profitable for the bank. This is not innovative, but it marks a stronger intention to ensure that banks participate in such investments without failing capital requirements. We should applaud the support the private sector is getting to channel private capital into climate-aligned sectors”.

IV. Comparison to Other African Countries

Cameroon’s approach—combining updated, modern Fiscal Investment Law (Ordinance 002) with cutting-edge Prudential Green Regulation (COBAC/BEAC)—positions it alongside the most proactive financial centers in Africa, surpassing many that still rely solely on fiscal incentives. Of course, this has not resulted in record investment flows seen in Egypt, but it sets the foundations for Cameroon to attract FDI flows.

Most African countries, like Kenya, Côte d’Ivoire, and Ethiopia, use investment promotion acts that mirror Cameroon’s Ordinance: they offer fiscal, customs, and administrative incentives, often with an emphasis on special economic zones (SEZs) or strategic infrastructure. These laws are successful in attracting general FDI but are often climate-agnostic, sometimes treating a fossil fuel power plant and a solar plant identically if they meet job creation thresholds.

• The most advanced economies – South Africa, Nigeria, Morocco – are moving beyond fiscal policy. South Africa, for instance, has a developed market for Green Bonds, stringent technical screening criteria (We should copy this), and financial disclosure rules that embed climate risk into the financial system. Nigeria’s Central Bank (CBN) has issued specific guidelines for sustainable banking.

Cameroon’s New Investment Law (Ordinance) provides an update to the existing investment framework. It is important to move beyond fiscal incentives and ensure that they are balanced by more stringent requirements for jobs, the environment, and social concerns. The African Continental Free Trade Area (AfCFTA) prioritizes a more balanced investment approach. This ordinance is the law; we must now focus on implementing it.

Henri Kouam – Founder

Sonia Kouam – Civil Administrator, Supreme State Audit