CAMEROON OPEN(ING) FOR BUSINESS; COMMERCE AND ECONOMICS

UNCLAS SECTION 01 OF 02 YAOUNDE 001056

SIPDIS

E.O. 12958: N/A
TAGS: ECON EINV ETRD BEXP KCOR CM
SUBJECT: CAMEROON OPEN(ING) FOR BUSINESS; COMMERCE AND ECONOMICS

REF A YAOUNDE 738
REF B YAOUNDE 909
REF C YAOUNDE 714
REF D YAOUNDE 999
REF E YAOUNDE 967
REF F YAOUNDE 1033


1. (U) Summary: Post has been heavily engaged in commercial and
economic policy outreach, reflecting the priority given to enhancing
bilateral trade and fostering economic development, a key Mission
Strategic Plan objective. Working under the aegis of a
mission-wide Economic Working Group that meets quarterly, Post
elements have collaborated on projects over the last semester to
advance USG priorities with regard to AGOA, agricultural trade,
Cameroon's prospects for an MCC program and its evolving
relationship with the IMF, and bilateral trade. A visit from the
Department of Justice and FINCEN focused on strengthening Cameroon's
financial sector, and visits from the Coast Guard and USTDA offered
USG collaboration to improve Cameroon's infrastructure. In the
coming months, Post will lead a specially-tailored delegation of
Cameroonian business leaders to meet with counterparts in the US,
facilitate a Cameroonian delegation to a December Dental Convention
in New York City, and highlight bilateral trade relationships with a
series of activities at "Promote", a prominent trade fair in
Yaounde. End summary.

The Economic/Commercial Context
--------------


2. (U) Cameroon is the largest and most diversified economy in the
Central African Economic and Monetary Union (CEMAC),and a keystone
state for the region; almost all trade (including supplies for
regional peacekeeping forces) with Chad and the Central African
Republic, for example, transits Cameroon's Douala Port. Despite the
challenging business climate and strong links to Europe and former
colonial power France, the United States remains the single largest
investor in Cameroon. The Chad-Cameroon Pipeline transects
Cameroon, and American firms like Noble, Kosmos and Pecten are among
the leading players in the oil and gas sector. American energy
giant AES is the nation's sole power distributor and largest power
producer (almost 1000MW) since it won the concession to manage
SONEL, the former power parastatal that was privatized in one of the
largest and most significant privatizations in Africa's history.
Smaller-scale trade is also on the rise, with U.S. exports to
Cameroon rising 7% in 2007.

Bilateral Trade and AGOA
--------------


3. (U) During the recent AGOA Forum in Washington, Post hosted a
group of Cameroonian business leaders for a Digital Video Conference
(DVC) to discuss implementation of AGOA with officials in Washington
and other African countries. Post sent a Pol/Econ officer to
accompany Prime Minister Ephraim Inoni and his Cameroon delegation
to the AGOA Forum, where Inoni emphasized that Cameroon is "not
looking for hand-outs," but for increased opportunities for trade.
Capitalizing on a visit from Dakar-based APHIS Director Cheryl
French, Post arranged a seminar to train Cameroonian officials and
exporters on phyto-sanitary norms in exporting to the United States.
Post also hosted a lunch with senior agricultural contacts to
inform reporting on Cameroon's food situation and policies (ref a).
Taking advantage of U.S. Patent and Trademark Office (USPTO)
training opportunities, Post continued to send Cameroonian officials
to the US for training on intellectual property enforcement.

Economy, Finance and MCC
--------------


4. (U) Post continued its outreach to host and third country
contacts, including meetings with the World Bank Resrep and staff
and the World Bank's annual planning meeting in Yaounde. Post
tracked the future of the IMF program in Cameroon (ref b),the
development of Cameroon's capital markets (ref c) and mid-term
budget execution (ref d). Responding to Prime Minister Inoni's
efforts to restart Cameroon's moribund Millennium Challenge
Corporation (MCC) campaign, Ambassador and Pol/Econ Officer
delivered a powerpoint presentation for Inoni and his staff,
explaining the MCC indicators and encouraging a strategic rethink to
improve Cameroon's performance.

Aggressive Business Outreach
--------------


5. (U) Post has actively engaged the Douala-based Amcham, which
has new leadership and appears more activist than in previous years
(membership tripled in the past year). During the Ambassador's
recent trip to the three Northern provinces, post did extensive
commercial outreach (ref e). Post officers at various levels have
provided support to American projects as diverse as Hydromine, the
American-led $6 billion bauxite mining project, and Globetournet, a
$4 million Cameroonian consortium leveraging EXIM financing to

YAOUNDE 00001056 002.2 OF 002


purchase American products (more than $100,000 to date) to provide
world-class internet service to Cameroonian households.

Successes: Business Ventures
--------------


6. (U) The last few months have witnessed a series of important
victories for American investment in Cameroon. Paul Hanrahan, CEO
for American power giant AES, met with President Paul Biya in July
to discuss AES' plans to reinvigorate its management of AES SONEL,
Cameroon's power distributor and largest power provider. Hanrahan
also announced that AES would create a new company headquartered in
Cameroon, the West Africa Power Company (WAPCO) to develop power
projects in the region. Hanrahan's visit was followed by a
long-awaited breakthrough on AES' negotiations with Cameroonian
aluminum smelter ALUCAM, an agreement with the GRC and financers for
AES' Kribi Power Development Company project (for a heavy fueled
plant at Kribi) and an aggressive plan by AES to invest in
rehabilitating existing infrastructure.


7. (U) Similarly, Hydromine obtained long-awaited GRC approval for
an 18-month extension to its exploration license for a multi-billion
dollar bauxite resource in Cameroon's Adamaoua Province. Hydromine
and partners Hindalco (Indian) and Dubal (Emirati) will proceed with
feasibility studies and plans for the necessary power production
facilities. Hydromine has also engaged with the Ministry of Economy
and Planning to be included (along with more than a dozen economic
interests) in the development of a long-promised deep water port at
Kribi.

Successes: Ports and Energy
--------------


8. (SBU) Officials from the US Coast Guard, accompanied by
Emboffs, visited Cameroon's port facilities and called on transport
officials in August in an effort to improve Cameroon's
implementation of the ISPS code for maritime security. Preliminary
reports indicate that Cameroon has improved its procedures, and the
Coast Guard and Embassy officers will work with Cameroonian
officials to digest the results and chart next steps. Post hosted
the visit of two officials from USTDA in May, who launched $1.5
million in feasibility grants to develop much-needed power projects
at Limbe and Bini-a-Warak. Ambassador Garvey's remarks at the
signing ceremony highlighted ongoing concerns about the commercial
environment in Cameroon. Pol/Econ staff called on government
officials and civil society representatives in Cameroon's East,
North and Adamoua Provinces to discuss the impact of long-promised
mining projects (ref f).

More to Come...
--------------


9. (U) Continuing the successful and hugely popular biannual
Business Forum series, Post is organizing a specially tailored
program tied to the Chicago Pack EXPO, during the second week of
November. The Forum will also include meetings with targeted
American companies and special opportunities for secondhand auto
sales. Past Business Forums (this is our eighth year managing the
Forum) have yielded significant successes in terms of fruitful
business relationships and new imports of American products.

10. (U) Post will also facilitate a Cameroonian delegation to the
December Dental Forum in New York City. Taking advantage of
"Promote," Cameroon's largest trade fair, the Commercial Section is
teaming up with the AmCham and Prince Geogre's County's Africa Trade
Office to highlight the growing importance of American trade with
Cameroon and Central Africa.


11. (SBU) Comment: The World Bank regularly ranks Cameroon as
among the most difficult business climates in the world, providing a
particular challenge for commercial and economic policy work.
Prospective American businesses turn to the Embassy for help at
almost every stage of their development, from navigating the
political hierarchy to dodging the pitfalls of a mine-laden
bureaucracy. The good news is that the American brand is highly
valued at all levels of Cameroonian society, and Cameroon is
shamefully rich in economic potential. The challenge is working
with American companies and promising Cameroonian partners to
transform that potential into reality. Post has a fully engaged
commercial staff and could make good use of more resources Q the
business is here!

GARVEY