Cameroon: Experts Call for Stronger SME Support to Unlock

Cameroon's small and medium enterprises (SMEs) are sitting on an untapped goldmine: the African Continental Free Trade Area (AfCFTA). Yet financing bottlenecks, regulatory friction, and weak institutional support are preventing thousands of firms from capitalizing on the continent's largest free trade agreement. Industry experts now warn that without urgent government intervention, Cameroon risks ceding its natural position as Central Africa's trade gateway to better-prepared competitors like Kenya and South Africa.

The AfCFTA, which became operational in January 2021, eliminates tariffs on 90% of goods traded between 54 African nations and simplifies cross-border commerce. For Cameroon—a nation with geographic access to both coastal and landlocked markets, plus French-speaking WAEMU ties—the opportunity is existential. Yet SMEs that could supply regional demand for agro-processing, textiles, pharmaceuticals, and light manufacturing remain trapped in a domestic-only mindset, starved of working capital.

## Why are Cameroon's SMEs struggling to leverage AfCFTA?

Three structural barriers stand out. First, traditional bank lending requires collateral that most SMEs lack; microfinance institutions cap loans at $5,000–$20,000, insufficient for export-grade production. Second, export documentation, harmonization with pan-African standards, and logistics remain opaque—no centralized agency guides firms through the process. Third, trade finance instruments like letters of credit are costly and slow, making cross-border B2B deals riskier than domestic sales. A Douala-based agro-processor told researchers she abandoned a $200,000 regional supply contract because her bank demanded 18% interest on a trade credit line.

## What policy changes could unlock AfCFTA gains?

Experts are calling for a three-pronged approach. Cameroon should establish an AfCFTA trade facilitation fund—a government-backed facility offering concessional loans (8–10% interest) for SMEs pursuing regional contracts. Rwanda and Ethiopia have deployed similar instruments with measurable success: Rwanda's export credit guarantee scheme has mobilized $180 million in SME lending since 2019. Second, the government must create a dedicated AfCFTA compliance office to help firms navigate tariff codes, quality standards, and certificates of origin. Third, digital trade infrastructure—a unified online portal for export permits, invoicing, and tracking—cuts administrative delays from weeks to days.

The macroeconomic case is compelling. Cameroon's GDP is $42 billion; regional intra-African trade currently accounts for less than 8% of total trade. If SMEs captured just 2% of the $273 billion projected AfCFTA merchandise market by 2035, that could add $5.5 billion in annual output and 150,000+ formal jobs. Banking sector leaders also see profit: emerging SME exporters become stable mid-market clients, reducing risk concentration in real estate and commodity trading.

## When might Cameroon act?

Political will remains the constraint. The 2024 Cameroon Business Forum and ongoing CEMAC (Economic Community of Central African States) harmonization efforts suggest growing awareness. However, implementation requires coordination across Finance, Trade, and Regional Integration ministries—historically slow in Yaoundé. Early adopters in Douala's industrial zones could prove the model's viability, signaling to policymakers that SME-led AfCFTA engagement is investable.

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