The Effect of Legislation on Foreign Investment—the Case of Cameroon

Abstract

There is no doubt that the investment climate in every country is conditioned to a great extent by non-legal factors. Nevertheless, many developing countries have, to varying degrees, relied on legislation as a means of attracting foreign investment. When Cameroon attained independence in 1960, it enacted an Investment Code that same year with the aim of attracting investment which the young state needed so much for the realisation of its development objectives. When after two decades the said Code no longer responded to the needs of the state, a new one was instituted on 4 July, 1984. The common feature of Investment Codes is that they contain various incentives aimed at channelling investments to areas which the authors regard as top priority. In this article, an attempt will be made to show to what extent the Cameroonian government has succeeded in its effort to direct investments to desired regions of the country through a statute wherein incentives cohabit with regulations on matters such as imports, exports, price fixing, foreign exchange, etc., which foreign investors consider as repellent. The study is subdivided into two parts. The first part is based on the Investment Codes and the second deals with the country's regulatory environment.