Note: This article is written as part of a three-year project implemented from September 2022, by the Small Business and Entrepreneurship Center (SBEC) of the Denis and Lenora Foretia Foundation. This project titled: Powering Prosperity and Economic Freedom of Youth and Women in Cameroon (PPEF project) received a financial support from the Rising Tide Foundation and the John Templeton Foundation.
Bentham’s theory of utilitarian morality leads us to know that the purpose of economic activity is to ensure social progress for the happiness of the greatest number. Thus, excluding people from an economic system without considering their interests is considered a destruction of the common good. According to the United Nations (1962), population is one of the most important factors of economic productivity, as it influences the rate of development of a country.
Women represent 49.6% of the world’s population and young people aged 10 to 24 represent 15.5% of the world’s population (UN World Youth Report, 2020; World Bank, 2020). In Cameroon, youth and women represent more than 60% of the population, but remain the most economically excluded (BUCREP, 2005). This reality appears to be a challenge for a country that wants to be an emerging country by 2035. The main objective of this paper is to show the role that entrepreneurial development could play in promoting the economic inclusion of youth and women in Cameroon.
It is expected to raise awareness among public authorities as well as the private sector of the importance of economic inclusion of youth and women through entrepreneurship development. Based on studies carried out by credible international and local institutions, we focus on the challenges of entrepreneurship in the context of the economic inclusion of youth and women and the opportunity of entrepreneurship for the economic inclusion of young people and women in Cameroon.
Entrepreneurship Challenges in the Context of Economic Inclusion of Youths and Women
Africa has the largest number of young people with an average age of 19.7 years compared to 30.9 years in the world in 2022. Entrepreneurship in Cameroon has not yet effectively played its role which is the pivot par excellence of the economic inclusion of women and youth in Cameroon, as it faces several difficulties.
According to a survey conducted by the National Institute of Statistics (INS) of Cameroon in 2016, the first obstacle to entrepreneurship is taxation. This is followed by administrative formalities and hassles with agents of the town hall or the urban community (34.2%). Financing problems – access to credit, cost of financing, and more – were also singled out (30.7%). The same applies to market outlets (18.1%), corruption (18.1%), and insufficient energy and water (17.4%).
For (GICAM, 2020), the Cameroonian tax system is characterized by the instability of the tax system and the reasons for tax adjustments (72%), tax penalties and fines (66%), the tax rate (61%), and the multiplicity of tax administration controls (59%), all of which are factors that hinder the development of entrepreneurship in Cameroon and, therefore, the economic inclusion of young people and women.
In the same vein, due to administrative red tape, found that 31% of businesses have some form of certification and this proportion is higher among large businesses (55%). 51% of companies are involved in a quality process. 43% of companies have certified their products by the National Agency for Standardization and Quality (ANOR) of Cameroon thereby attesting to the negative influence that administrative hassles have on the development of entrepreneurship in Cameroon.
In Cameroon, the rate of access to credit for small and medium-sized enterprises (SMEs) remain low and represent only 14.9% of GDP (World Bank, 2019). This low rate is due to the non-formalization of SMEs in Cameroon as this is a key factor for access to finance. Informal SMEs do not protect financial institutions, making it difficult to comply with financial sector regulatory requirements.
Corruption has over time become another major problem for the development of the private sector in Cameroon. The country is among the 30 most corrupt African countries in the world and ranks 157th out of 187 countries (Transparency International, 2020). This has a negative impact on entrepreneurship development. The lack of technical assistance to businesses also seriously hampers entrepreneurship development and reduces the economic inclusion of youth and women in Cameroon.
The Opportunities of Entrepreneurship for the Economic Inclusion of Youths and Women
The economic exclusion of youth and women is characterized by poverty and unemployment due to their limited participation in the development of a society. Therefore, economic inclusion is seen by the fight against poverty and unemployment in a community, but also as a way of getting people to actively contribute to the development of the community. In 2021, the unemployment rate in Cameroon stood at 6.1%, compared to 3.84% in 2020, while the underemployment rate fell to 65%, a drop of four percentage points over the period (African Economic Outlook, 2022). It should be noted that young people and women are the most affected by this economic situation.
Over the decades, the creation of new enterprises has become an effective means of combating unemployment and reducing poverty in developing countries (Batjargal and Liu, 2002). It is therefore in this logic that entrepreneurship appears to be the key to the economic inclusion of youth and women through the fight against unemployment and poverty. In Cameroon, the agricultural sector alone employed 62% of the Cameroonian workforce in 2013 and the informal sector of entrepreneurship employs nearly 90% of the available workforce (IDRC, 2015).
Furthermore, Cameroon’s National Development Strategy 2020 – 2030 (NDS30) for structural transformation and inclusive development sets as one of its major objectives the promotion of employment and economic inclusion of its population, through the development of very small enterprises (VSEs), SMEs, and youth entrepreneurship.
Several efforts have been made by the Cameroonian government to address the problem of youth and women unemployment, including the creation of the National Employment Fund, the Rural and Urban Youth Support Program (PAGER-U), the special three-year youth plan, the agency for the promotion of women, the improvement of the business climate, etc. However, the economic inclusion of youths and women is struggling to improve, largely due to the low level of entrepreneurship development.
The Way Forward
The objective was to analyze the role of entrepreneurial development in promoting the economic inclusion of young people and women in Cameroon. Entrepreneurship thus appears to be a key to the economic inclusion of a population, and a strategy for combating unemployment and poverty. Based on credible empirical findings from international and local institutions, the paper highlights the need for the Cameroonian government to develop more ways to increase its non-tax revenue and reduce the tax burden on SMEs in order to stimulate entrepreneurship among youths and women. This strategy could lead to the local transformation of natural resources/local products and the development of the manufacturing sector. The involvement of youths and women in the development of private sector in Cameroon constitutes a great opportunity to reap all benefits of the Africa continental free trade area (AfCFTA).