Mitigating risks related to foreign direct investment in Cameroon

Cameroon and sub-Saharan Africa in general receive very low FDI compare to their potential. This is mainly due to the risk perception by foreign companies. Sub Saharan Africa is considered very high risk given the political instability and the business environment that is not very conducive. Cameroon has enjoyed quite a good political stability over the last thirty years but is still performing very badly on business environment and attractiveness indicators. The analysis of the data shows that the key risk is the liability of foreignness as knowledge of the local environment is critical to achieve success. Companies already present in the market are very confident about the future. They have also developed strong risk management capabilities and the main techniques used are: solid project appraisal and investment decision making process involving great attractiveness evaluation and risk analysis. They all have a robust process for investment decision and due diligence is key. Establishing strong partnership with authorities is key to drive predictability and support from them on issues that mater to the business.