Chinese Influx in Cameroon’s Informal Sector

In all Sub-Saharan African countries, the informal sector plays an important role. Indeed, the informal economy weighs the most with an average of about 38% of GDP between 2010 and 2014. This reality is increasing annually. According to a report published in 2017 by the International Monetary Fund, the informal market represents between 20 and 65% of the gross domestic product of SSA countries. In Cameroon, for example, a country with an unemployment rate of around 13.1% and an underemployment rate of 75.8%, the informal sector supports more than 80% of the population and creates small trades, and generates more jobs (ILO, 2014). The Chinese community in Cameroon has taken this sector by storm. This creates unfair competition (Bamboo, 2014). How does this phenomenon affect the sector in Cameroon? What can the Cameroonian State do to protect informal employment? 

  1. Effects of Chinese Rush Into Informal Economy Sector 

Informal trade has been invaded by “Made in China products accused of unfair competition in Cameroon’s major cities. The Chinese are masters of counterfeiting; they buy a product in Cameroon and have thousands of copies of it reproduced for resale on the Cameroonian market (Gweth, 20l0). There is a rush of people to Chinese shops because of the high cost of their product. This is a heavy blow to Cameroonian traders (Bambou, 2014). For the average Cameroonian whose main activity is trade, the presence of the Chinese is a major factor of socio-economic imbalance. 

China has a large population that has not only cheap labor but also many people who want to move abroad to improve their living conditions (Amougou, 2018). It is, therefore, common to see doughnut vendors at crossroads in Cameroon (Banyongen, 2007). We can also note that between 2015 and 2017, Chinese companies imported 3,000 workers into different parts of construction-related supply chains (Kouam, 2020). I wrote about this last summer. The Chinese are increasingly installed in catering, auctions, shops, retail shops, production of doughnuts, creation of exotic salons and various services – alternative medicine, massage, acupuncture, traditional medicine, etc. – prostitution, clandestine workers, undeclared workers, and more (Kouam, 2020).  

Chinese investors in Cameroon import Chinese laborers in full view of the Cameroonian government, even though project and contract specifications state that the labor used must be local (Gweth 2010; Amougou, 2018). Even when local people are recruited, they are poorly paid and work in difficult conditions, without medical coverage, employment contracts, and safety measures on the various sites. For example, workers from the agricultural fields of the Sino-Cam Iko Company in Njore cry out for the exploitation of their labor  in terms of payment and precarious working conditions. They work more than eight hours a day for a meager monthly salary of twenty-five thousand CFA francs. When they claim their rights, they are accused of being lazy and incapable and are immediately dismissed (Michel et al. 2008). What should the State in Africa in general and the State in Cameroon, in particular, must do to protect local informal employment? 

  1. Regulating Chinese Hand Work in the Informal Sector to Protect Local Informal Job 

To reduce the negative impact of Chinese workers in the informal sector, the government should ensure that all workers have access to the Chinese nationals in Cameroon operate based on work permits. These should be issued for a fixed period of time-based on the nature and type of economic activity. In addition, rather than targeting unfairly Chinese workers, it would be appropriate to carry out Periodic and impromptu assessments of their visa status while at the same time taking into account the requirements of the International Labour Organization. 

Second, all Cameroonian workers who employ non-Chinese Chinese nationals should do so within the framework of the formalized agreements. Of course, it might be too costly to apply social security contributions; but the hours of conditions and wages should be clearly defined and clearly defined in a contract. 

Finally, the government must promulgate a minimum quota of employment in each Chinese company to ensure that Cameroonians benefit from employment and economic prosperity. It is important to design legislation that ensures each major project undertaken by the Chinese employs at least 70% of Cameroonians. When this is not the case, it is imperative that Cameroonian employees follow Chinese workers in higher roles and more techniques. 

In addition, to correct the economic imbalance, there may be a slight increase in taxes on imported Chinese products. It can be adjusted according to tax revenues; it must be designed to protect domestic industry. 

Conclusion 

Local jobs and businesses are threatened with disappearance due to the Chinese rush into Cameroon’s informal sector. This sector supports more than 80% of the population and creates small trades, generating many jobs. To protect these jobs and small informal trades in which some Cameroonians are involved, the State in Cameroon must regulate the access of the Chinese through restrictive and/or supervisory measures. 

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Dr. Joel M. MOUDIO is a political scientist and a researcher on public policies, political economics and public administration. He is an economic policy, governance and regional integration analyst at the Nkafu Policy Institute.

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Henri KOUAM is a Fellow in Economic Affairs at the Nkafu Policy Institute. He currently works as an economic consultant for a global expert network – Global Wonks.